The Remedy Blog

Mixing Business, Pleasure and Contract Terms

| by Brian Hink | 0

How good is your relationship with your core vendor salesperson? Have you known them for a while? Do they invite you and your team to fun events? It can be fun to get together with those you have a working relationship with for a local sporting event or concert. However, in doing so, it’s advised to not confuse a strategic working relationship with your vendor contacts/salesperson vs. making friends with your core vendor.

Many prospects and clients that I have spoken to feel their relationship with their core vendor contact has something to do with negotiating a better deal or simply receiving a fair offer during the core contract renewal process. Believe me, one has nothing to do with the other. It is very possible that you have a true friendship; but “business is business.” The vendor salesperson knows where their paycheck comes from. It’s very unlikely they will tell you to pursue better rates or contract terms. Most vendor contacts (client partner or customer service representative) will not hold it against you if you decide to actively negotiate your rates and contract terms. In fact, they will gain more respect for you as a business partner that you are doing your due diligence for your bank or community credit union.

How high are your rates and how do you convince them to reduce them to a competitive level? What is even more fascinating to me as a consultant in the industry, is the number of vendor contacts I have spoken with that say they prefer if their clients hire a consultant to work through the process for them. The main reasons for working with an experienced consultant is that the process goes much smoother because the “asks” from the consultant are “educated positioning” rather than guesstimates. Unfortunately, for most banking clients there is no idea to know if your pricing and contract terms are good, bad or ugly so negotiating successfully, in the dark, is virtually impossible.

In the end, from my consulting experience, it is perfectly fine to build a positive relationship with your vendor contact, but when doing so, make sure you keep the important business separate from the personal interactions.

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Remedy Consulting helps financial institutions (FI) thrive through best-in-class fintech consulting services specializing in System Selections, Contract Negotiations, Outsourcing/In-House Advisory, Bank Mergers & Acquisitions, and FI Strategic Planning. As a trusted advisor to banks and credit unions located in Wisconsin, the Remedy Team has executed over 700 system selection and vendor negotiations since 2016. Our clients receive a cost reduction on their core vendor contracts and increased efficiency with Remedy's Price Repository. To learn more about Remedy Consulting, contact us today!

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