3 SaaS Contracts Negotiation Strategies

During the SaaS buying process, identifying what price to look out for and how to negotiate with your vendor is critical. Moreover, it is difficult to ensure that SaaS buyers are getting the best software at the right price. 

SaaS negotiation is not a very common topic that you discuss. It is mainly because SaaS vendors do not advertise that they are quite open to negotiation. Sometimes they lack transparency with the pricing models on their websites, especially the “enterprise'' category.

SaaS vendors keep an open window for the enterprise pricing model. Mostly they do not disclose the price on their website as the pricing depends on multiple factors like no. of users, features required, etc. This makes the pricing section complex and the negotiation for buying SaaS.

For a smooth negotiation, there is no specific formula to follow. But formulating negotiation strategies will help you get the best deal. 

Using SaaS negotiation strategies, you can negotiate warranties, better support facilities, limitations of liability, and other relevant contractual clauses. But the main focus of any SaaS buying negotiation is pricing. Procuring the best software at the best price can be said to have better negotiation with the SaaS vendor.

However, when there is a lack of data and information in pricing, you are confused about the fair price at which you can procure the SaaS app. This is where you need an expert’s help to get clarity on pricing and avail the best deal for your organization.

Zluri, a SaaS buying expert, helps you negotiate and get the best software deal for your business. We offer SaaS buying services and take care of the negotiation process on your behalf. Thus, helping you in saving time and money.

At Zluri, we specialize in negotiation with 1 billion SaaS transaction data and analyze the fair price while approaching these SaaS buying conversations. We work as your partner and help you navigate negotiations at ease.

While SaaS has simplified the work for your employees, we will help you with the negotiation part to procure the SaaS and reduce your expenses. This post will walk you through the three most important negotiation strategies for SaaS.

Negotiation Strategies for Procuring SaaS

1. Avoid the Anchoring Trap

The anchoring effect is highly influencing you to purchase the SaaS at a higher price. You often get to see the first piece of information and make decisions based on the information. It is regardless of the fact whether the information is accurate. 

SaaS vendors emphasize the first price that they offer to you. This is done to set the mindset with that price and give a counteroffer accordingly. When you are unaware of the actual price of the software, your counteroffer will be based on the price offered by the vendor.  

For example, if you are procuring Slack for collaboration within the organization, the vendor offers you a price of $10/per user/month. Since you do not have sufficient information, you make an $8/user/month counteroffer. Whereas in reality, the software can be procured at $5/user/month.

In the above scenario, even after the counter offer is offered, you are still losing by $3/user/month. The lack of information leads you to the win-lose situation where the vendor gains a profit of $3/user/month even after agreeing to close the deal at $8/user/month.

At Zluri, we have the benchmark data on SaaS prices. We bring data-backed insights with knowledge and experts on fair pricing and will provide you with the SaaS apps of your choice at the best price.

With Zluri, you can avoid falling into any anchoring trap as we have sufficient data and insights and help you in the negotiation process of SaaS buying. We make sure you get the best deal on better terms. 

2. Research the Zone of Possible Agreement  (ZOPA) Before Going for Negotiations

Zone of possible agreement or ZOPA in negotiation is used to get the best deal possible for both parties, including you and the vendor. It is that zone of the pricing section where your budget range overlaps the range of pricing offered by the SaaS vendor. 

For example, you are interested in purchasing Asana. The features you require for your business are offered at $11/user/month for 100 users, which equals $1100/month, and the lowest price offered is $9/user/month. The budget allocated for procuring Asana ranges between $850 -1000/month. 

On one side, the vendor's desired price is $1100/month, and the worst-case price is $900/month. On the other side, you being the buyer, your desired price is $850/month, and the worst-case price is $1000/month.

Considering the above example, the zone of possible agreement is $900-1000/month for 100 users. It is the range where both seller’s and buyer’s ranges overlap. 

At Zluri, we help you with data-backed negotiation; we have benchmark data that helps us to get the ZOPA pricing range. This assists the fair pricing for negotiation where both the vendor and you can be on the winning side.

We understand the desired and worst-case price for both parties, and with the help of benchmark data, we can analyze the fair price for negotiation. 

3. Be Ready with Your BATNA

There is no single formula for negotiation. But few golden negotiation strategies are often suggested by experts. The best alternative to a negotiated agreement or BATNA is one such golden negotiation strategy.

BATNA analysis is done to get prepare if the negotiation fails and an agreement cannot be made. It is a strategy to prepare you before entering into a negotiation deal. 

For example, you are in the process of negotiating with Asana for your organization. But you will try to convince the vendor by offering the maximum price you are willing to pay. And the maximum price you have agreed to pay to the vendor is the Buyer's BATNA.

Similarly, before entering the negotiation process, the vendor (Asana) must have analyzed the minimum cost for negotiation. If you offer a price that is lower than the vendor’s minimum value, then negotiations are most likely to fail. The minimum value analyzed by the vendor is the Seller’s BATNA.

BATNA helps you determine the maximum value you are willing to pay for the deal. It is then that you realize the importance of having the best alternative to cut unnecessary and avoidable costs.

Zluri has over 1 billion SaaS transaction data which helps to get a deeper understanding of the fair prices and also the best alternatives to the negotiated agreements. We know the best price for procuring SaaS apps and work as an extension of your procurement team.

We offer our Employee App Store (EAS), which is connected with our SaaS buying service when you want to procure SaaS at better pricing and terms that you can get on your own.

Negotiating with Zluri will Give You Leverage During SaaS Contracts Negotiation and Maintain Vendor Relationship

Negotiating with your SaaS vendor does not indicate that you are setting the relationship off on the wrong note. On the contrary, by ensuring your requirements are fulfilled, the relationship with the vendor becomes even more valuable and has the potential for a long-term relationship. 

The best negotiation is one that makes both--you and the vendor-- a winner. This indicates that both parties are in collaboration to create a streamlined contract and provide mutual values to both parties involved in a contract. 

With Zluri, it is possible to have the best SaaS negotiation. We have experts who are capable of making the contract beneficial for both you and the vendor. We work as the extension of your procurement team. 

Additionally, the benchmark data makes us stronger to analyze fair pricing and create the best negotiation where there is no losing opportunity for both parties. Our charges are only applied when we help you with saving.