As you begin negotiations with vendors, consider following these tenets:
Never tell the vendor which vendors, or how many, are left in the running.
No matter how much they pressure you, don't answer any questions that are none of the vendor's business. The vendor is on a need-to- know basis.
Always tell the truth. Not only is it morally and ethically correct, but it saves you from having to remember what you said in lengthy negotiations.
Don't tell the vendor that you love the product.
Don't tell the vendor how much you have budgeted for the project.
Never disclose another vendor's pricing or other confidential information.
Be patient. Fight the urge to rush the project.
Don't tell the vendor the deadline for the project.
Do highlight the strengths of your organization and why you would be a good client.
Understand that some commitments are a two-way street. For example, if you negotiate a firm installation date, not only must the vendor be ready, but you must be ready also.
Never say, "We're going to buy your system. We just have to work out the details."
Let the vendor make the first move when it comes to offering financial incentives and price reductions. They may be willing to reduce the price more than you think. Phrase the question, "What financial incentives are available should we purchase your system?" Then, proceed from that point.
Never underestimate the importance of silence. A long pause after making a point can be quite effective.
Peel the onion. Understand that negotiations are not a sprint but a marathon. Take your time and don't be afraid to cut off negotiations and reconvene at a later date and time.
Don't become angry or overly excited. This can be an emotional process, but keep your emotions in check.
Keep in mind that salespeople sell. You rarely see them after the sale is made. Therefore, get verbal commitments from salespeople in writing.
Ask for contract modifications where applicable.
Beware the bargain. The low-cost provider may not have the revenue stream to support future operations.
Consider the incumbent vendor as the leader until unseated.
Always have the contract reviewed by legal counsel.
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