Mobile contract negotiations can be a complex, time consuming activity for businesses and when incorrectly managed, they can lead to large, unplanned excess costs over the term of the agreement. Despite this many businesses still treat mobile as a commodity when it comes to negotiations and opt to manage them in house without professional support.
In this article we quickly review why mobile is anything but a commodity, highlight some of the main pitfalls to avoid when negotiating contracts and explain why having a professional mobile negotiation firm on your team may help to drive significantly greater savings, speed up the process and deliver better mobile contract terms, that protect your business.
Challenge 1: Mobile networks have teams of commercial analysts whose sole job is to maximise the profit they make from your business over the term of the agreement. Who’s in your corner?
Mobile networks and vendors know exactly how to structure proposals, tariffs and contract terms so that they appear to offer great value for money with the lure of immediate cost savings, whilst actually hiding large profits for the network. Most businesses gladly accept these savings without really challenging the detail or looking for the catch – and the devil is always in the detail on mobile contracts.
The most common technique used to obscure the real costs is to only provide details of the headline rates and basic rental charges whilst ignoring all other “out of bundle” charges. This makes the deal look like great value but often significantly underestimates the true costs to the customer. The networks rely on the fact that most businesses don’t have the detailed data or know the right questions to ask, so they don’t think about whether there are large hidden costs.
Other techniques (amongst many) include applying high charges for out of bundle usage, not specifying how future (more expensive) charges will apply for increasing data allowances and applying complex recovery charges for “in term” connection cancellations or for failure to achieve contract commitments.
The bottom line is that whilst your mobile vendor will be assuring you that their offer is exceptional and the amongst the best they have ever offered for a customer of your size; the reality is that most businesses only normally get an average deal and most simply don’t know whether they are really achieving value for money.
Going into these vendor negotiations without an experienced guide or key negotiations targets or simply relying on a team member who may have run a tender at a previous firm or negotiated the last contract renewal is a guaranteed way to ensure you’ll be overpaying.
Challenge 2: Most businesses can’t accurately model different vendor proposals and tariffs and so they often ignore the complex details.
Mobile billing is the most complex of all telecoms billing. Every network and vendor applies different tariffs, billing rules, charge zones and policies for data and roaming usage. To compare different vendor proposals side by side fairly you’ll need to be highly experienced in mobile billing and be able to process large volumes of detailed itemised usage data. You’ll also need to be able to complete complex analysis at a mobile connection level to be confident that you’ve modelled the tariffs correctly.
This simply isn’t possible using basic spreadsheets or without a detailed understanding of how the different vendors apply their tariffs and billing rules. It’s also likely to ineffectively consume a vast amount of your business finance and analyst resources in the process.
Working with a specialist mobile contract negotiator will remove this challenge and ensure that you have access to quickly produced, accurate and comparable data to base your decisions on. A reputable firm will also be able to show you exactly where each proposal has its strengths and weaknesses and where vendors will be hoping to make large hidden profits in the future.
Challenge 3: Most businesses don’t have a clear plan or vision for the type of mobile deal they want and whether mobile device costs should be included.
As with all negotiations your business is either leading the discussion or it’s being led. If you’re being led, then most of the time you’re going to end up significantly overpaying.
That’s especially true if you’re considering including mobile devices or a “tech fund” into your new contract. Tech funds are one of the ways that mobile networks lure customers into inadvertently signing up for complex commitments, which always lead to significant excess costs overs the term of the agreement.
A professional mobile negotiator will help your business to create clear requirements before you start negotiations and they’ll also walk you through the different commercial models, so your business can go into negotiations leading the conversation with clear targets for pricing and commercial terms.
Challenge 4: Your mobile vendor is going to try and delay the contract process, once they’ve got you to agree to their renewal pricing in principle.
One of the most common techniques used by mobile networks at renewal is to delay the contract process once the new tariffs have been accepted in principle. They initially hook their customers based on their high level renewal proposal, with the simple aim of removing the competition from the process.
However, once the customer wants to push forward and resolve the details of the deal, the delays always start to come in. The aim of course is to keep the customer on the older and more profitable contract for the longest time, without getting to the point that the customer gets so frustrated that they walk away.
All too often customers naively enter in negotiations quite late in the day and believe that they will be able to quickly conclude a great negotiation. In reality they find it can take anything up to 6 months or longer for the new terms to be contracted and applied to their billing. An experienced negotiator can help to prevent these issues and put in place measures up front that will mean that the carrier can’t benefit from delays.
Above all however, when working with a professional mobile negotiator then you’ll be able to avoid these challenges, make better informed decisions and fast track the entire negotiation process. Helping your business to arrive at a better mobile deal in quicker time and with greater savings.
About Utelize Mobile
Utelize specialises in supporting large businesses to fast track their mobile contract negotiations and to achieve market leading terms and pricing.
Our services include:
Mobile Opportunity Review– This service is designed to support your in house procurement and IT teams by providing them with the knowledge they need to negotiate a better mobile contract for your business. We’ll complete a comprehensive review of your current mobile costs and usage and existing contract as well as any current vendor renewal proposals. We’ll then provide detailed guidance and supporting analysis on where cost savings and negotiation improvements can be generated, where terms need to be restructured to avoid future costs and issues and importantly where your business may be inadvertently wasting money on inactive services and excess usage charges.
11th Hour Negotiations– If you’ve already commenced a mobile procurement process and have offers on the table from vendors, Utelize can help you to fast track the final negotiations and support you to obtain the optimum deal. Our fee model for 11th hour negotiation services is typically based on a performance fee model where we share only in the additional savings that we help deliver on top of the current offer you have on the table.
Fully Supported Negotiations – Our full support model includes all the resources needed to assist your team to obtain the optimum mobile contract and service for your business. Our service typically includes an initial Mobile Opportunity Review, target savings evaluation, requirements capture, support to generate RFP or negotiation documentation, negotiation support, and modelling of vendor proposals and savings. We can also provide assistance to complete the legal agreement with vendors to ensure negotiated terms are fully captured. We offer both fixed fee and performance based fee models.
To learn more about including Utelize as part of your mobile negotiation team click Get in Touch at the top of the screen.