The Countdown for 2023 Negotiations is Up. Are You Ahead of the Game in 2024?
Don’t wait to negotiate. The closer it gets to your contract renewal date, the less leverage you have with your vendors. Maple Street explains how to gain the upper hand.
Around the holidays, everyone starts counting down the days left on the calendar. Kids count down the days left until Santa comes. People don sparkly outfits and count down the seconds until they raise their glass to the new year.
Some countdowns are fun. Some, though—like when your contract is ticking down to renewal—can cost you millions.
When it comes to negotiation, the longer you wait, the worse it gets. Vendors love last minute negotiations because you were too busy to review your contracts or just plain forgot about the rollover.
Maple Street’s professionals always know the best prices and terms and can still hold vendors’ feet to the fire even if your contract is about to roll over. But the best way to gain the advantage over your vendor, make them agree to your terms and conditions, and avoid leaving millions on the table, is to start negotiations early. Building your advantage requires time, often starting two years or more before your rollover is due. So as we all set our sights on a new year, we recommend setting your sights on your contract renewal dates.
With enough time, you can turn the tables on your vendor
As your advocate, Maple Street will advise you when your contracts are coming due and what the current renewal terms are as far out as two or three years before the renewal date. This will give you enough time to obtain the ammunition you need to negotiate large contracts, so you are coming at the vendor from a position of strength. This means taking the time necessary for Maple Street to evaluate the current vendor, determine what the alternatives are, and develop a strategy to gain the advantage over the vendor or replace it with a vendor better suited to your needs. There are three parts to successful negotiation: planning, proposals, and education. And they all require time.
The three parts to successful negotiation
In the planning stage, it will it become crystal clear what the objectives are in your negotiation. For example, what is your main purpose? Better terms? Better pricing? Better performance? All the above? Or something else? Once you know the objective(s), you can determine the outcome(s) you want.
Once you know what you want to gain (the outcome) in your negotiation, a successful strategy to wake up your vendor and gain cooperation is to threaten to fire them and give your business to someone else. To be effective, you must have an alternative vendor selected that you would be happy to work with, if needed. That means you actually have to go through the process of sending out and reviewing proposals before you can introduce the threat of firing your vendor. Of course, Maple Street will do all the heavy lifting. The time needed for proposals takes us to our third stage.
Reviewing, evaluating, and narrowing your choices to two or three vendors takes time, especially in educating yourself about each vendor and vetting every vendor on your list. Maple Street will be with you every step of the way, doing most of the work, and reporting our findings to you. But it doesn’t happen overnight. That’s why we say two or three years lead time is not too long, and last-minute negotiations most likely will not give you all the results you want.
Maple Street vs. your vendor
Our negotiators do this 24/7, so they are prepared to roll up their sleeves and play the long game on your behalf. With Maple Street calling the shots, you’ll have enough time to turn down the vendor’s initial response. Imagine the vendor’s surprise when, after reviewing the vendor’s first proposed contract, Maple Street negotiates again, gaining better results. But we won’t stop there. Our negotiators will re-review the new proposal and tell you if this is the best deal possible. If we think more can be gained, we will have the time necessary to continue negotiating until we have achieved the best results.
Maple Street’s Vendor Advantage System®
The Vendor Advantage System® helps you choose the right vendor for you, get the best contract possible, and measure and monitor the results. At Maple Street, our team of professionals are experts at timing negotiations, knowing the market rate and industry standards, developing a negotiation strategy, and saving you money.
Our system uses supply chain management principles to manage vendor lifecycles and reduce expenses, improve vendor performance, and manage risk. To date, we have saved our clients over $350 million.
If you’d like to get out from behind the eight ball because you wait too long to negotiate and start saving millions, give Frank Taddeo a call at 443-325-0781 or email him at firstname.lastname@example.org.
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