MICROSOFT NEGOTIATIONS OVERVIEW
It’s often said that negotiating without leverage is another form of begging, yet we commonly observe enterprise buyers approaching Microsoft purchases with little time to execute a deal, no Microsoft alternatives, and no valid reasons for the sales rep to offer a better, more competitive Microsoft price. Microsoft’s sales teams are masters at executing their “T Minus 36” strategy, which involves a 36-month run-up to your next deal. The purpose of this activity, which begins before the ink is dry on your last Microsoft deal, is to eliminate any and all sources of leverage you may have.
This Microsoft negotiations report will focus on these key categories specific to deal execution to maximize leverage in your next Microsoft deal:
1. Developing a Favorable Microsoft Deal Timeline
The average Microsoft deal requires 9-15 months of prep work in order to achieve a competitive outcome and Microsoft price. This section details all the Microsoft deal activities and best Microsoft practices that need to be taken to create and preserve negotiation leverage. With an organized strategy around each of these activities, buyers can approach Microsoft negotiations from a position of power.
2. Creating Microsoft Deal Options and Alternatives
There are many alternatives and deal options available for buyers aside from Microsoft competitors. We dive into all Microsoft motivations and how each can be utilized by the buyer to improve their Microsoft price. Microsoft alternatives and options discussed in this section include:
Cloud vs. On-Prem: Microsoft purchases containing cloud versus on-prem products have varying commission benefits for sales reps. Learn what the motivating factors are for Microsoft sales reps and how you can adapt them into your Microsoft negotiation strategy.
Ramped Microsoft Pricing: Microsoft reps have compensation benefits tied to the consumption of their software. Understand how multiple Microsoft proposal options and ramped Microsoft pricing plans can put the customer in the driver’s seat when dictating Microsoft price and cost.
Microsoft Deal Timing: Microsoft is driven by key fiscal year dates. Learn how to manipulate Microsoft deal timing through acceleration or deceleration of execution dates to motivate your sales rep to provide the best Microsoft deal outcome for your organization.
Microsoft Deal Structure Alternatives: Certain Microsoft deal structures have a higher emphasis placed on them by sales reps due to commission and revenue allocation benefits. We detail what deal structures motivate Microsoft and how you can leverage them to improve your Microsoft price.
Microsoft Competition Matrix: Competition is a useful negotiation tactic when competing new Microsoft purchases. We detail competitive product offerings from the closest Microsoft competitors across the Productivity, Communications, Database, Analytics, CRM, Identity & Access, and Mobile Device Management Microsoft product families.
3. Controlling Microsoft Deal Information
Like most major vendors, Microsoft’s sales teams are experts at obtaining information which eliminates their uncertainty around the deal and destroys buyer leverage. The close relationship between Microsoft and your internal business users can begin before your first purchase and strengthen over time. Microsoft information leaks can occur anywhere - on the phone, via email, in your office, at lunch or at a Microsoft conference or event. This section highlights how to proactively plan and raise awareness with business stakeholders on what information is important to protect in any Microsoft deal. An aligned organization is necessary to minimize Microsoft cost and continually control the tone of a Microsoft negotiation.
4. Microsoft Negotiation Messaging Development
In the last section of this Microsoft Negotiations report, we detail the four key features all effective Microsoft negotiation messaging has. Microsoft sales reps are built to test the buyer’s story for potential inconsistencies up to the customer’s C-Suite. When in a Microsoft negotiation, it’s important to present a unified message across any groups who interface with the Microsoft sales team, and that message must be credible, consistent, and positively impact your leverage in the Microsoft deal. This section also includes popular tactics Microsoft sales rep use to deflect common negotiation tactics and examples of messages that work effectively in a Microsoft negotiation.
To achieve a competitive Microsoft deal, you must align around a comprehensive plan to build deal leverage, protect information and deliver a credible story in the Microsoft negotiation. By following the Leverage Management Maturity Model (LM3) introduced in this document, buyers can approach their Microsoft negotiations from a position of strength and achieve best-in-class results. For additional assistance on your Microsoft purchase, review some of the other ClearEdge resources listed below to help plan your strategy and mitigate risk.