Tech Time: Lessons from a $130 million core contract renewal
4 steps to take before and during negotiations to improve your outcome.
Recently, our firm assisted a client on the renewal of a core contract that could approach $130 million in total contract value if the financial institution hits its growth targets. Below are a few war stories and major hurdles that the client cleared with its vendor in order to sign this significant renewal. Although most core contracts never approach that size, there is a lesson behind each that may help in your credit union’s next major negotiation.
1. Know the motivations of your vendor counterparts.
The first question we always ask is: “Who will ultimately approve the final deal at the vendor?”
It is very likely that the deal is not being approved by the account rep or sales rep with whom you are negotiating. Is it their boss, the CFO or someone else? If your deal is large enough, meet with all the vendor stakeholders at the beginning of the negotiation and again when you reach major negotiating hurdles. Discuss timeframes and expectations during that meeting as well.
The second question we ask our vendor reps is: “How are you paid if this deal goes through?”
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