7 Ways to Build Leverage in a Telecom Negotiation

Leverage is the most important factor in telecom negotiation.

Here are 7 ways to develop leverage:

(1) Give yourself time – without the time to implement a change, your current carrier will not feel threatened and will not be aggressive with their pricing.

(2) Conduct a real RFQ – a RFQ, conducted more than a year before contract expiration, will produce the best results.

(3) Keep your commitments low – commitments 60% or lower will allow for more flexibility and show other carriers your ability to change.

(4) Watch out for circuit commitments – circuit commitments, often presented as low revenue commitments, can be far more restrictive than revenue commitments.

(5) Diversify your carrier portfolio – don’t have a large percentage of your business with one provider, spread it around. Experience with other providers will facilitate service moves, if negotiations don’t go your way.

(6) Move some services – threats alone won’t help you develop leverage, you need to use actions not words. Moving a circuit or a service will show your current carrier that you mean business, will show their competitors that you are open to change and will allow you to test out another provider.

(7) Band together – present a unified negotiation team. Don’t allow carrier access to C level executives, don’t argue amongst each other, don’t disclose information or show favor.