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
The “Try It, You’ll Like It” Ploy by Joe Auer
The “try it, you’ll like it” ploy has been around for a long time, and to nobody’s surprise it’s even more effective these days than it was in the past. First, let’s describe the ploy.
A vendor has a product – whether it be computer hardware or software, telecommunications equipment, machine tools or widgets – it wants to establish in the marketplace. What counts is the marketing and negotiation strategy embodied in this seemingly ideal set of circumstances for a prospective buyer, i.e., he/she gets to try the product first, with no obligation to buy, for free or nearly free.
It goes like this. A vendor marketer approaches a prospect and says: “We’ve got a product we’d love you to try. We will provide it to you at no charge (or in some cases a minimal maintenance or service fee) for a trial period.” The normal trial period would be 90 or 180 days.
The length of the trial period was carefully calculated to be just a little longer than the time it will take the customer to become dependent on the product. Creating a dependency is the strength of this ploy.
Most prospective buyers jump at the chance to get something for nothing. The trial period usually specifies no long-term continuing obligations. It’s merely: “Try it for X period of time and if you don’t like it, we’ll remove it and you will have no further obligation to us of any kind.” So the customer thinks: “Gee, we don’t have any real obligation here, we don’t have to pay for it and we can try it before we buy it.”
Because it all sounds so easy, prospects tend to relax about negotiating the contractual terms and pricing for the Final Agreement. Usually customer attorneys will be more than satisfied with a Trial Agreement covering the terms and conditions which will apply during the trial period. The attorney ensures that this Trial Agreement expires at the end of the “try it, you’ll like it” scenario. Seemingly good law, this plays directly into the vendor’s hands.
ICN has found prospects become so enamored with the thought of something for nothing without any long term commitment, they don’t try to optimize the deal further. The irony is the vendor often is willing to give additional concessions but the customer, having fallen for the “something for nothing” trick, stops asking way too short.
When the end of the trial period arrives, the product usually is going to stay because the customer has become dependent on it. A vendor with smarts will have done a good job of coming in and assisting the customer to become dependent on the product.
In discussing this ploy in ICN seminars and while dealing with regular clients, it is clear the vast majority of the “try it, you’ll like it” situations turn into real deals almost automatically.
If the vendor has done the job and established dependency, at the end of the trial period and the expiration of the Trial Agreement, the prospect’s attorney, purchasing management, or contract negotiator will attempt to negotiate a Final Agreement with favorable terms, conditions, or pricing.
With even a minute’s thought, it is obvious their position is almost hopeless. They have no negotiating leverage to exert. There is no competition, no alternatives of any type and the customer is hooked on the product. This leaves the customer negotiators hung out to dry. The prospect has been blindsided. To tag an old car commercial – Advantage: Vendor.
So where does this leave us? Is it ICN’s recommendation to avoid these “try it, you’ll like it” deals?
Surprisingly, ICN thinks you can gain an advantage if you are aware of what the vendor is doing. There are benefits if you do the transaction correctly.
Assertively negotiate the Final Agreement prior to allowing the trial of any product. Deal with reality and do not be dazzled by the high tech glitter and glitz. The capacity of individuals for self-delusion is vast; routinely people kid themselves into believing they are not committed and are going to have some flexibility after the trial period. But for the most part, it is simply not true.
If you believe the odds are against keeping the product, you are wearing rose colored glasses. The fact is, the odds are very strong you will keep it. The comments of the last dozen years of ICN seminar attendees attest to an 85% to 90% of the retention ratio. So, face facts and negotiate the Final Agreement to be in effect after the trial right from the start.
The Final Agreement should contain clear, strong provisions allowing the customer to extract itself from the contract at the end of the trial period. This Agreement considers the trial period as only the first phase of a comprehensive, permanent agreement. For lack of a better name, you might even want to call this period an acceptance test of 90 or 180 days, whatever matches the vendor’s trial period offer. At the sole discretion of the customer, at the end of the test the product can be returned to the vendor at the vendor’s expense, with no further obligations.
It is critical to negotiate this position while you still have leverage, that is before the product is installed and while the vendor is trying to sell you on the idea a trial is the best way to evaluate the product. If a vendor is willing to offer a trial as their opening gambit, there positively are more concessions available if you strike hard.
Your negotiating position is strongest before the vendor gets the product in the door, almost zero after the customer becomes dependent on the product. The recommendation here is simple: negotiate the on-going agreement and pricing when you have the strongest negotiating posture … pre-trial period, pre-customer dependence, pre-commitment.
Make no mistake about it, the “try it, you’ll like it” ploy, the result of a highly creative marketing strategy, still is extremely effective. For the vendor, the free trial period offer always has been an inexpensive marketing technique. And, it works over and over again. In classic vendorspeak, “try it, you’ll like it” really means: “try it, and we’ve got you where we want you.”
So, negotiate first. If you do it right, you really can get something of value … the right to try the product, to “kick the tires” and “drive it around the block.” If you like it, you’ll automatically be covered by a proper agreement because you took the precaution of negotiating up front.