Johnson: Telecom negotiations: the sales side of the story

Pushing notion of a win-win deal, though questions about how many times you should go back to the table

A few weeks back I provided some insight about negotiating with carrier sales teams during the RFP process. One topic I wish I’d stressed more was the concept of a “win-win” deal -- one in which both parties are happy with the outcome. Game theory shows that win-win deals tend to optimize the satisfaction on all sides and thus provide the maximum value for the effort expended.

One of my readers (a salesman for a major telco) wrote in to remind me that good sales people always seek a win-win outcome: “Telcos can’t afford the damage caused by dishonesty. Good news travels fast, but bad news travels 10 times faster. Lying is not tolerated by any telecom company with a decent reputation or by one that is trying to establish a decent reputation,” he writes.

Amen, brother! But his advice to IT execs doesn’t stop there. Regarding RFPs, he says to be clear and don’t make the carriers guess what you want, or ask for a solution that doesn’t exist. I couldn’t agree more — that’s why I advise folks to invest the upfront time to determine requirements.

He agrees with me that the end of the quarter is a good time to put pressure on sales people, and adds, “Don’t forget the end of each month is usually just as important. Also understand that if you are asking for something that will require upper-management approval, it may take more time than you expect.” That's absolutely true, and one reason I recommend that IT execs budget plenty of negotiating time — as much as eight months for really big contracts.

One area where I take issue slightly with my reader is on going back to the negotiating table. He writes, “Going back to the table many times may not get you the best deal. In most cases sellers have more than one company to take care of. If the salespeople and more importantly, sales management, know they will be ‘played along,’ they’ll spend their time dealing with companies who know what they want and will make a decision promptly.”

That might be true in a perfect world, but in my experience, carriers reward multiple rounds of negotiation with dramatic drops in rates (25% or more), particularly when a big deal is on the table. So, while I agree it would be faster and cleaner for both sides to do a single round of negotiation, the reality is that multiple rounds appear to be what it takes to converge to a win-win.

And converging to a win-win is what it’s all about. As my reader says, “I agree 100% with you in that each side in the sales process wants a fair deal. Sales is not about deceit. It’s about finding out what a customer needs and delivering the appropriate solution.” And the best way you can help your salespeople do that for you is by investing the energy to craft an effective RFP.

Learn more about this topic

Johna Till Johnson: What's ahead in '07 for the telecom industry 01/04/07


Writing a winning telecom RFP 11/24/06


Join the Network World communities on Facebook and LinkedIn to comment on topics that are top of mind.

Copyright © 2007 IDG Communications, Inc.

IT Salary Survey: The results are in