Why “Special Negotiators Often Pay More

For years, I’ve often heard someone tell me that they negotiated a best in class software deal because they are “special”.  The assumption is that they are a unique and “special” company therefore need to negotiate a software contract with their “special” considerations.

 While I believe that every person is indeed “special”, we all work for companies that have two basic needs.  Build a product and sell the product.  While manufacturers of a product customize their products to a specific demographic group, pricing is rarely customized to specific demographic groups as much as it is to other considerations.

An automobile manufacturer would not design a minivan to the university student, but when the minivan is in the dealer store, the dealer doesn’t care if the buyer is a student or a mother of five children.  All buyers are shown the same price for the same product.

Does a software product (e.g. MQSeries, Oracle Database, Windows Server) matter who the buyer is?  Does the product’s functional capabilities vary dependent on the negotiator?  Although a negotiator may be correct in asserting that they are “special”, the vendor is the same.  The product is the same.  The technology is the same.

With over 20 years of analyzing tens of millions of software pricing from over 64,000 software products, software pricing has very little to do with industry or the “special” negotiator.  Software pricing is very regional and seasonal.

From a software vendor’s perspective, any customer who pays them is “special”.  The customers that pay them the most are the most “special”.  Don’t compare your pricing with others in your industry or business demographics.  If you want the best possible price from the software vendor, focus on getting the best price across their entire customer base.

 

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