September 2012

Monthly Archives

  • Did You Know That Price and Terms are Linked?

    Chain Link - Aber Law Firm

    Ok, let me explain what I mean.

    Enterprise customers too often want to make up their own terms (i.e rules) regarding how they use your software service. As a result, you really need to think about linking price with terms (in your SaaS agreement). How does this work, well let’s go through it.

    1). De-Linking Price and Terms. Most enterprise customers try to de-link price and terms (negotiate price first and later hit you up for a bunch of custom terms), and I have even seen them have separate negotiating teams when negotiating price (usually the IT business owner) and when negotiating terms (usually the purchasing and legal departments ). So if a customer tries to separate price and terms, your job is to keep them linked!

    2) What Happens When They Are De-Linked. ​When price and terms are de-linked the customer has no incentive to end the negotiation, as you are just giving and giving terms and getting nothing in return. As the price has been agreed to, your customer is actually incentivized to keep asking for more (and better) terms.  This is what I call ‘going through the grinder,’ as that is what it will probably feel like.

    3) What Happens When They Are Linked. When price and terms are linked, the customer is more likely to have the real discussion of what its needs are. Why would this be the case? Well, if a customer wants a specific term in a SaaS agreement and …