Early in my career, I developed something called my “Marketing Truths.” These were instrumental in helping me understand people’s behavior and motivation. They were critical in my direct-to-consumer marketing job because they helped me put myself in the shoes of my customers or prospective customers to figure out what would make them more likely to buy the product or service we were selling.
If You Don’t Ask Someone to Do Something, They Won’t Do It
Almost 15 years later, I can easily say this single marketing truth has saved the companies I’ve worked for millions of dollars. By taking it and applying it in my role as a buyer of marketing technology, services and media, I have been able to successfully negotiate hundreds of contracts at discounted prices and put those additional dollars toward incremental programs and contracts that wouldn’t have otherwise been affordable.
The truth is (no pun intended), one of the tremendously under-appreciated roles of Marketing Operations (MOPs) is procurement. Most people are beginning to understand the value of MOPs when it comes to technology management, analytics, process and development, but procurement too often goes overlooked. More and more, MOPs teams are not just responsible for the management of existing tools, processes and vendors but also the research, evaluation and contract negotiation for new vendors — responsibilities that historically fell into Procurement or Finance organizations.
When I was at LogMeIn, we had a world-class procurement team in the finance group. They were ruthless negotiators and sticklers for process. But they didn’t know about martech or marketing vendors. They didn’t know whether $20,000 was a great deal, or way too much to pay a vendor. And to be perfectly honest, at a large company like LogMeIn, the actual procurement team had bigger fish to fry than a $20,000 contract. Their time was spent negotiating 6- and 7-figure deals. So, what happened? The burden of martech procurement and contract negotiation fell on MOPs. And our MOPs team enthusiastically took on that role.
For the average marketer, speed to contract completion is often the most important part of the procurement process. But they sometimes forget about budget, even though every dollar saved is a dollar that can be used elsewhere. For MOPs, while speed is still important, budget management, terms and security are usually top of mind. MOPs teams are all about efficiency and process, and saving money is perfectly aligned with that mindset.
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How MOPs Can Excel at Sales Negotiations: Remember the Marketing Truth
There are a lot of complex and strategic ways to negotiate with vendors, and there are professionals who do this for a living, but not everyone is comfortable playing hardball. For MOPs professionals just starting to flex their negotiation muscles, the best strategy is to start small and simply ask for a discount. Email is usually the best low-risk, low-conflict channel for a newbie negotiator to ask for a discount. Email takes all of the emotions and the nerves out of asking. Whereas asking for a raise or a promotion is best done with confidence face-to-face, there is no shame or downside in asking for a discount over email.
When you become a more skilled negotiator, face-to-face can be even more effective. Putting sales reps on the spot, telling them what you want, and asking them to commit can be very empowering. Sales reps typically use those exact skills with buyers, and if you flip it around on them, you can quickly gain the upper hand.
Now when it comes down to dollars and cents, I have some very simple and practical advice:
- If you budgeted $20,000 for a vendor, and the vendor gives you a quote of $25,000, just ask for them to lower it to $20,000.
- If you budgeted for $20,000 and the quote comes in at $20,000, ask them to lower it to $17,000.
No matter what the quote says and no matter what your budget is, ask for a discount. If you don’t ask, they won’t lower it. And if you do ask, the worst they can say is no.
To be honest, if you are truly willing to walk away without that discount, the sales rep will say yes to your ask under most circumstances. Because for a sales rep, getting $17,000 instead of $20,000 is better than getting $0. And as I said at the beginning, it is critical to understand people’s motivation and behavior in order to get them to buy (agree to) what you are selling (a discount).
Justin Sharaf is Vice President of Marketing at Jahia Solutions, a global Digital Experience Platform (DXP) provider with customers in over 20 countries. With a background in analytics and technology, Justin believes that building a core foundation of data and technology helps optimize marketing programs and empowers marketers to be more effective and efficient in their jobs.