A business shouldn’t wait until its phone and internet services are up for renewal to start the process negotiating new pricing and terms. It’s best to plan ahead and formulate a company wide strategy.
Here are seven methods to build leverage and win a telecom negotiation:
Plan ahead – 12 months is ideal. 6 months is the minimum. If you delay the process too long and attempt to conduct an RFQ a month or two before your contract termination date, your current carrier will drag their heels and delay the process knowing that you will be left with few alternatives. Planning ahead can also help you to avoid the auto-renewal activation (if there is any).
Conduct a real RFQ – Create a formal RFQ, with detailed specifications and requirements. An email sent to multiple carriers, requesting pricing, is not a formal RFQ.
Keep your commitments low – Lower revenue commitments will give your company flexibility and leverage. If you need to retain the majority of your services to meet your commitments, you have no flexibility and are at a carrier’s mercy. Carrier account managers work with multiple clients and have a great deal of experience negotiating contracts; they understand when a customer has negotiation power and when they don’t and will act accordingly.
Watch out for circuit commitments – Some companies do a good job keeping their revenue commitments in check but have a multitude of circuits, all separately contracted, with varying expiration dates. The result is little or no flexibility and leverage.
Diversify your carrier portfolio – Forming a “partnership” with a carrier is a bad idea. Too much business with one carrier will reduce your flexibility and leverage. It also makes your company vulnerable if that carrier has financial problems or experiences a network outage. Having a diverse portfolio allows you to test out other providers. You’ll be able to experience the other company’s customer service, their billing platform and repair department. If you have a good experience with a company handling a smaller piece of your overall network, you’ll feel more comfortable giving them a bigger chunk of your business.
Move some services – If you want to keep your carrier on its toes, move a few circuits to one of their competitors. Moving some circuits will grab the attention of your carrier account team and could lead them to proactively review your account and rectify any pricing issues.
Pick a story and stick to it – All levels of your company need to be on the same page and form one united front. It will not help your negotiation efforts if IT is making one claim when your company’s CEO is saying something else when he or she is playing a round of golf with your carrier’s CEO.