Articles on IT Acquisition and Doing Better Deals
Tips & Tactics
- Negotiations: Principled Concessions
- Financial Analysis — a Refresher
- Presenting vs. Positioning
- Even Pros Make Mistakes
- The Power of No
- The Dip
- Caveat Venditor
- Champagne and Scarcity
- Urgency—Guard it at All Costs
- They Know That You Know
- Why a Checklist
- Beyone the Handshake
- The Challenge with Buying Technology
- The “Try It, You’ll Like It” Ploy
- The “We Don’t Need To Write That Down, You Can Trust Me” Ploy
- The “Low Ball” and “When I Hit Your Hot Button, I Gotcha” Ploys
- The “Price Protection Contract” Ploy
- The “Form Contract” Ploy
- The “Solutions” Ploy
- The “We Can’t Do It For You Because We Would Be Setting A Precedent” Ploy
- The “Unfortunately, I’ll Have To Get Any Changes Approved By Corporate” Ploy
- The “Price Protection Contract” Ploy
- The “Tie-In” Ploy
- The “Fait Accompli” Ploy
- The “Price Increase is Coming” Ploy
- Table of contents
- “We Don’t Need To Write It Down. You Can Trust Me” And Other Grim Fairytales
- The Negotiations Agenda Part 1
- One Bite at a Time
- The Negotiations Agenda Part 2
- Don’t Let Vendors Hold You Hostage
- The Right Attitude
- Finding Responsibility
- A Fair Audit Clause
- Looking Beyond “Needs”
- Before Saying “I Do,” Think About Divorce
- A ‘Top-Down’ Look In Challenging Times
- Don’t Allow Vendor Disappearing Acts
- Vendor Short-listing: The Long and Short
- If a Vendor Offers the ‘Lunch’ Ploy, Don’t Bite
- Make Sure Consultants Will Keep Your Secrets
- Two Essential Parts for Service Contracts
- Keep Consultants Far From the Enemy
- Be Wary of Annual Revenue Commitment
- Leasing’s Different When It’s Laptops
- Two Truths Behind Securing Better Deals
- Not in the Contract, Not Part of the Deal
- Feeling Safe With IT Security
- Avoid Surprises in Subleasing Deals
- Insist on Language to Cover Billing
- Manage the Contract
- Clear Ordering Procedures
- Winning with Leases
- A Ploy that Didn’t Fly
If a Vendor Offers the ‘Lunch’ Ploy, Don’t Bite by Joe Auer
Vendors are notorious for adeptly using ploys to gain an advantage over the competition – and over us, the customers. Our challenge is to recognize these ploys and counter them with appropriate tactics. Savvy vendors are constantly inventing new ploys as they size up each situation and try to master the customer.
“Account control” is the essence of a vendor’s most successful sales strategies. The customer must never lose sight of the fact that even in the most ideal world of ethical business, salespeople are motivated totally by their compensation plans, which offer incentives to maximize their firms’ profits and minimize risks in any deal.
An experienced veteran of negotiations once wryly commented that when a vendor does something highly effective in negotiations, it’s called a “ploy.” When a customer does the same thing, it’s called a “tactic.” Let’s look at what happened recently when a ploy met a tactic:
As part of a disciplined procurement process, a customer included a “bidders’ conference,” which was scheduled to be held two weeks after the request for proposals (RFP) was issued to potential vendors. This gave the vendors two weeks to digest the RFP and develop questions in preparation for the conference.
The customer requested that the vendors submit questions via e-mail three days before the conference. This approach allowed the customer to review all the questions and prepare sufficiently detailed answers. The customer also informed the vendors that they’d be allowed to ask additional questions during the conference. The conference was scheduled to last three hours, ending at noon, with most of the time devoted to vendor questions.
As expected, representatives of several vendors called the customer project manager (identified in the RFP as the single point of contact) and offered to buy lunch for the customer team right after the conference. This “let’s do lunch” ploy included the usual reference to an opportunity to better understand requirements and tailor their responses. These vendors were trying to seize an opportunity to gain one-on-one access to the customer team and an advantage over the competition. Clearly, allowing a vendor such an opportunity would immediately cloud a customer’s objectivity and “un-level” the level playing field that the customer had worked so diligently to establish.
As we all know, there’s no such thing as a free lunch. The vendors wanted additional information and the opportunity to build a relationship with the team outside the formal channel offered by the bidders’ conference. They hoped to use the informal aspect of the relationship to gain further advantage during the remainder of the selection process. The price of a lunch could return a huge payback for the vendor that succeeded.
The customer emphatically rejected the lunch offers, citing its commitment to objectivity and fairness. Additionally, the customer re-emphasized the need for the vendors to focus on satisfying the requirements in the RFP. This customer “tactic” was designed to send a clear message that unwanted advances outside the prescribed process would reflect unfavorably upon vendors that weren’t process-obedient.
Customers that demand businesslike behavior and documentation are more likely to increase vendors’ respect for them and build longer-term, more professional associations between the two organizations than they are to adversely affect relations with vendors. A customer’s initial efforts to adopt a professional process may create an uncomfortable situation for both parties because the new system doesn’t have the warm, fuzzy feel of a “partnership.” But once the customer establishes that it intends to follow professional contracting principles in procurements, it will get more honest vendor representations and sales efforts, fewer manipulative vendor ploys and more realistic initial price concessions.
Also, an employee who doesn’t use disciplined contracting and negotiating procedures could damage his career.
Sooner or later, it’s likely to cause him considerable embarrassment or, even more seriously, cost him his job. In a nutshell, the astute customer will always have a tactic to counter any vendor ploy.
JOE AUER is president of International Computer Negotiations Inc. (www.dobetterdeals.com), a Winter Park, Fla., consultancy that educates users on high-tech procurement. ICN sponsors CAUCUS: The Association of High Tech Acquisition Professionals. Contact him at email@example.com.
Copyright by Computerworld, Inc., 500 Old Connecticut Path, Framingham, MA 01701. Reprinted by permission of Computerworld.