SAP NEGOTIATIONS OVERVIEW
It’s often said that negotiating without leverage is another form of begging, yet we commonly observe enterprise buyers approaching SAP purchases with little time to execute a deal, no SAP alternatives, and no valid reasons for the sales rep to offer a better, more competitive price. SAP's sales teams are masters at executing their “land-and-expand” strategy, getting a foot in the door, winning over users, spreading across business units and processes, and growing their footprint. These activities occur as the sales team actively works to remove any and all sources of leverage you may have.
This SAP Negotiations report will focus on these key categories specific to SAP deal execution to maximize leverage in your next SAP deal:
1. Developing a Favorable SAP Deal Timeline
The average SAP deal requires 6-12 months of prep work in order to achieve a competitive outcome and price. This section details all the SAP deal activities and best SAP practices that need to be taken to create and preserve negotiation leverage. With an organized strategy around each of these activities, buyers can approach SAP negotiations from a position of power.
2. Creating SAP Deal Options and Alternatives
There are many alternatives and deal options available for buyers aside from SAP competitors. We dive into all motivations and how each can be utilized by the buyer to improve their SAP price. SAP alternatives and options discussed in this section include:
Multi-year term lengths: What is the impact to the SAP sales rep’s commission based on the length of your agreement? We detail how multi-year SAP deals factor into compensation plans and how buyers can improve their SAP negotiation position by playing with term lengths.
SAP Product Growth: SAP reps will be motivated by different product growth options. Understand how multiple SAP proposal options can put the customer in the driver’s seat when dictating SAP price and cost.
High Profile SAP Products: What SAP products are motivating sales reps to provide the best discounting? How do these SAP products affect sales rep commission? We detail answers to these questions and how buyers can use these products as a bargaining chip to improve their SAP price.
SAP Deal Timing: SAP is driven by key fiscal year dates. Learn how to manipulate SAP deal timing through acceleration or deceleration of execution dates to motivate your sales rep to provide the best SAP deal outcome for your organization.
SAP Licensing Model Allocation in Bundles: Certain SAP 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 SAP and how you can leverage them to improve your SAP price.
SAP Competition Matrix: Competition is a useful negotiation tactic when competing new SAP purchases. We detail competitive product offerings from the closest SAP competitors across the CRM, Marketing, eCommerce, and Analytics SAP product families.
3. Controlling SAP Deal Information
Like most major vendors, SAP's sales teams are experts at obtaining information which eliminates their uncertainty around the deal and destroys buyer leverage. The close relationship between SAP and your internal business users can begin before your first purchase and strengthen over time. SAP information leaks can occur anywhere - on the phone, via email, in your office, at lunch or at an event hosted by SAP. This section highlights how to proactively plan and raise awareness with business stakeholders on what information is important to protect in any SAP deal. An aligned organization is necessary to minimize SAP cost and continually control the tone of a SAP negotiation.
4. SAP Negotiation Messaging Development
In the last section of this SAP Negotiations report, we detail the four key features all effective SAP negotiation messaging has. SAP sales reps are built to test the buyer’s story for potential inconsistencies up to the customer’s C-Suite. When in a SAP negotiation, it’s important to present a unified message across any groups who interface with the SAP sales team, and that message must be credible, consistent, and positively impact your leverage in the SAP deal. This section also includes popular tactics SAP sales rep use to deflect common negotiation tactics and examples of messages that work effectively in a SAP negotiation.
To achieve a competitive SAP deal, you must align around a comprehensive plan to build deal leverage, protect information, and deliver a credible story in the SAP negotiation. By following the Leverage Management Maturity Model (LM3) introduced in this document, buyers can approach their SAP negotiations from a position of strength and achieve best-in-class results. For additional assistance on your SAP purchase, review some of the other ClearEdge resources listed below to help plan your strategy and mitigate risk.