The Importance of Leverage

The most important key to success in a telecom negotiation is leverage.

This is the first installment of CarrierBid’s eleven part series on the telecom procurement process.

Entering the telecom procurement process without an overall strategy could cost a company thousands and thousands of dollars.  Carriers, like AT&T, CenturyLink and Verizon, have experienced representation that respond to RFPs and negotiate contracts on a regular basis.  Entering the procurement process unprepared can have devastating effects on an organization.

The first step is to understand what contributes to and how to establish leverage.

What doesn’t contribute to leverage?

The size of your organization, the amount of your company spends on business phone and internet services, a need for savings, a strategic relationship with your voice and data service provider and establishing deadlines do not contribute to leverage.

Assuming any of these factors will help in a negotiation, will probably end up damaging your efforts.  A vendor wants you to drop your guard and rely of such factors, because then they know they have you.

Vendors will point out these attributes at the start of a negotiation to make you feel like you don’t have to work for good pricing and terms.  If they were factors in your favor, would your opponent emphasize them?  Remember – the vendor is your opponent in a negotiation – not your partner.

What contributes to leverage?

Actions not words, credible threats, a history of moving business and conducting legitimate RFPs.  Also, keeping existing commitments at a lower level and allowing your organization enough time to conduct a legitimate RFP.

Building leverage needs to be a focal point of your company’s preparation for the telecom procurement process.  Without sufficient leverage you and your company will be fighting an uphill battle.

CarrierBid can help you with any step of the telecom procurement process.  We don’t charge a fee for our service or require a share of your savings.