As a long-time professional contract negotiator, I often run into the same thought patterns with decision-makers: We’re just a small financial institution … We aren’t the top priority for our vendors … We have all of our major services bundled with one vendor … We don’t have any negotiating leverage … They’re only going to cut deals for “the big guys” … I might as well save my energy and just let contracts auto-renew … After all, we’re pretty happy with how things are going.
On top of that, in the past several weeks as the coronavirus crisis has hit the nation, I’m also hearing these additional musings: Now is not a good time to negotiate … I’m swamped, my people are swamped … Besides, vendors aren’t going to be making deals right now … They’re probably not even taking those types of calls.
Based on my years of experience and what I’ve seen lately, let me share the following truths about vendor contract negotiations with you. The knowledge shared could be the difference between you securing five-, six-, or seven-digit savings over the terms of your contracts and helping you offset economic hardships during this crisis.
TRUTH #1: Yes, you ALWAYS have leverage to negotiate a contract.
Please don’t let your asset size, number of branches, number of accounts or any other perceived shortcoming sway you from the fact that a vendor does not want to lose you. As in most industries, it’s much less costly to retain a customer than to go out and secure a new one.
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