IT Purchase Process / Enterprise / Networking / Small Business

Strategies to control your Telecom / IT spend amid the pandemic

Rob Rodier
The Covid-19 / Coronavirus pandemic has placed unprecedented financial stress on businesses worldwide. As activity dips, companies of all sizes are looking for ways to reduce operating expenses.

If your business is trying to get creative around cutting or deferring services costs in the IT infrastructure realm (internet access, VoIP / UCaaS, managed services, etc.) then you have your work cut out for you. Contracts can be lengthy and early termination fees can be hefty. Easy outs are hard to find, and service providers aren’t always the nicest bunch!

In this post, we’ll help you craft a strategy to maximize savings or cost deferral potential even if the contracts you’ve signed are ironclad. Here is what you should do, step-by-step:

1. Know your contract like the back of your hand.
Before you do anything, understand the piece of paper you signed. While legal agreements can seem intimidating, usually the most relevant commercial terms are grouped together in just a few subsections. Definitions of services, term, effects of breach and even “force majeure” (an extraordinary event that can perhaps free you from contract liability) in this case should be looked at. There may be cases where you have the right to lower consumption, or delete aspects of the service that you may not currently need. At the very least, you can find the specific clauses of your service contract you’ll need to point to in a negotiation. If you have counsel on staff / a lawyer friend, perhaps have them take a quick look at contract clauses.
Opening a dialogue with a service provider without understanding what leverage you may or may not have is essentially shooting from the hip and won’t likely play out well. Simply ask for “help” and you’ll get nothing, as service providers themselves are struggling right now too.

2. Determine your objective.
What is it that you actually want to accomplish? Is it a lower monthly rate, a permanent reduction in services, a 90 day suspension of service, or a complete cancellation of services? These will all be interpreted differently by the service provider and will require different negotiating tactics. It doesn’t take a genius to realize that a complete cancellation is a MUCH tougher objective than a 90 day suspension of services.

3. What can you offer in return?
This will be a negotiation where both sides must give in some fashion. Service providers are struggling in this crisis just like your business might be, and a small concession on your end to help them guarantee future revenue can go a long way. You can likely negotiate a lower rate temporarily or even suspend service altogether in exchange for an extension of your term commitment, or a commitment to turn on an additional service in six months. More creatively you can offer to act as a reference / testimonial for the service provider or even participate in a webinar or marketing case study in exchange for some leniency. If you can swing it, getting them a new customer will almost ensure that they work with you in some capacity. If you can add value to the service provider, they’ll almost certainly work with you!

4. Strategize for the call!
Know your script before you call anyone. Maintain a friendly but stern tone and be prepared with a storyline (business issues forcing you to cut cost, specific contract clauses that you can point to with outs, specific cost remediation suggestions, and a potential friendly offer to the service provider). Identify what the worst case scenario would be for the service provider, and be prepared to convey that scenario and stand firm. “We can no longer afford this service but we do value it, and would like to find a way to maintain a portion” is a more effective stance than “can you help me lower my dedicated internet bill?”.
Be sure to call the person who will give you the highest probability of success. Optimize for comfort, and then power. If you have a dedicated account rep or salesperson you’re friendly with, make that call first. Only go the route of customer service if you have no relationships in the service provider or if you’ve called sales / account management to no avail. With customer service, aim to escalate your request as high as possible and add urgency to your claim, as they’re likely receiving lots of requests like yours each day.

5. Learn for the future
The current pandemic has raised the point that we never know how or when the business landscape can shift radically. The time tested best practice is to look carefully at your agreements, think about worst cases, and negotiate in some flexibility BEFORE you sign. Remember those clauses that made your contract harder to amend in the present? See if you can make adjustments to those in future contracts. Having a lawyer take a quick look at substantial and costly agreements before you sign them could save you lots of headache in the future.

There is also lots of free expertise available to help navigate the telecom buying process, such as agents or contractors. Knowing what has successfully (and unsuccessfully) been negotiated with other customers and a specific service provider in the past is insight that is invaluable. A good agent knows this, and can help you negotiate friendly terms. There is no moment in time where your organization has more leverage than right before you execute an agreement, make sure you play it to your advantage. Agents can also advocate on your behalf when you’re going through a tough time (like now).

If you want a free cost analysis of your own infrastructure, or simply want to bounce ideas off a friendly IT infrastructure expert for free, get in touch with us.

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