Spiff Or Rif – The Key To Effective Negotiation With Software Vendors
I haven’t been blogging or tweeting recently because I’ve been on an unprecedented two-week vacation, but didn’t want any potential burglars to know that. Now, thanks to Eykanmuckyourlifeup or whatever its called, that vacation has turned into an extended business trip states-side (see #ashtag). So I’m taking the opportunity to meet more clients on the smoke-free side of the pond, to help them with their software negotiations.
This is a busy time of year, particularly for Oracle and Microsoft deals in front of their financial year-ends of May 31st and June 30th respectively. One of software buyers’ frequently asked questions is, “what extra leverage does a vendor’s year-end really give us?”
The answer is in the title above. On the one hand, if your deal would give your sales rep a Spiff, an extra bonus for selling specific products, then he’ll be very keen to prevent your order slipping into next quarter, when the spiff may not be available. Even better, he’ll be desperate to close your transaction now if he needs it to make his annual target, to avoid becoming part of next quarter’s reduction in force (RIF) program.
Fear of getting ‘riffed’ is particularly high this year because all software companies are likely to continue cost cutting while discretionary software spending remains depressed. So your rep will be more willing to get you extra discount and contract concessions if your deal might be the difference between him getting a spiff or a rif, provided you can credibly threaten to delay into the next financial year. So find out where you stand. What’s he pushing – are there any special deals available? How he’s doing this year, is he going to make it to ‘club’? Hopefully you’ll be able to take advantage if your rep needs the deal to happen right now more than you do.