Negotiating E-content and Tech Licenses
Two information professionals who have had wide experience with content licensing participated in this interesting and useful session. Richard Hulser, now Chief Librarian, Natural History Museum, Los Angeles County, has been on both sides of the table and has participated in many negotiations.
He began by noting the criteria for negotiating or partnering. Negotiation is appropriate when there are plenty of available vendors; partnering is better if you anticipate a long-standing multi-year relationship or if times are tumultuous. Before the process begins, both sides must do their homework. The customer should find out the vendor’s industry and position in it, vendor’s business operations and needs, key vendor personnel background (a lot of them have librarians on staff who will know your business), and their main customers (you?). The vendor’s requirements are similar; they should know the customer’s industry and position in it, business operations and needs, personnel background, and expectations.
Trust is very important. Vendors are not evil! The vendor must understand the client’s buying decision process, timeframe, budget, etc. The customer must understand pricing structures, how terms and conditions are applied, and what vendor provides outright vs. what is customized.
Negotiation is about more than price. Here are some other factors to consider:
- Know your organizational needs. Understand how the product will be used, how many staff will be needed to maintain it.
- Know your bottom line. Start with something better than that and be prepared to negotiate. You must tell the vendor this first.
- Research the vendor solutions to meet your needs. You may have a choice of delivery platform, etc. Learn what the competitors are offering.
- Learn what the competitors are offering.
- Negotiate the use of content, training, marketing support, customer service, not just price.
- Find your own vendor references.
- Beware of the slick demo (in the exhibit hall–it always looks good there) or emphasis on features you don’t need.
- Do a gut check on your decision.
The librarian must know their own business when talking to the vendor. Good vendors bring in product experts as needed to ensure understanding, which is one of their core competences. They often allow use of the product as is for evaluation or proof of concept, NOT for full implementation. Customizations are usually extra. The price paid needs to be reasonable so the vendor can provide proper products and services. Give them a pricing framework so they know your expectations Otherwise it is a guessing game. Do you need products as sold or are you willing to experiment or take some risks? The vendor will walk away if your price is too low or expectations are unrealistic.
It is important to drive negatives out of the negotiations; strive for a win-win situation. Vendors can and do fire customers if they are not worth the effort or if they are unreasonable in the negotiations. Sometimes you must be prepared to walk away from the deal. Vendors should never denigrate their competitors; instead focus on what they can do better. Trust is a must and communication is critical.
Mike is owner of Gruenberg Consulting, LLC and author of a book on buying and selling information. He has worked in the information industry for 30 years in a variety of selling roles. He began by noting that companies spend lots of money training their sales professionals, but libraries do not train their staff for negotiation and then proceeded to discuss how sales calls are conducted and how librarians should prepare for them.
The most important takeaway from his talk was to require an agenda for the meeting. If the salesperson opens their laptop at the start of the meeting, ask them to close it and discuss the products first. The librarian must be an active participant in the sales call. The sales person cannot sell you anything if you don’t tell them what you want. The sales person and librarian should have a unique relationship that will produce results that are acceptable, reasonable, and cost-effective for both parties. It is a mutually beneficial relationship.
The information professional must prepare for the meeting. Do the research, and go to the company website. You may know more than you think. Have an idea of what you want to spend and tell the salesperson. Be an expert or seem to be. Be in tune with the latest trends in your industry. Get the most out of the sales call. Help their sales person do their job. Your organization expects you to have done research to help select the right products for your library and to have confidence that you have negotiated the best possible price. The salesperson can help you achieve these goals. You must be realistic and forthcoming in expressing your funding situation.
A typical sales call should follow this pattern: 10 minutes for introductions, 30 minutes for fact finding, 10 minutes for a demo if necessary, and 5 minutes for wrap-up. Remember that buying information is not like going to the grocery store. You must understand the dynamics of the meeting and respect the salesperson’s time. The salesperson should be able to describe the features and benefits of the products without a PowerPoint presentation.
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