You have a contract with your telecom carrier that hopefully ensures you are getting the most aggressive discounts and / or price points available. Typically these contracts will range from 1 to 5 years (3 is the most common). There are a few important questions to ask as you enter the final year of the agreement … “Have my telecom needs stayed the same?” “Are there changes in the marketplace related to rates or service offerings?” Chances are both of these items are prevalent. Depending on your situation, there could be tremendous cost reduction opportunities. Here are some helpful tips you need to know before renewing most telecom contracts.
1) Many contracts will automatically renew. Many contracts have a fine print “evergreen clause” that will auto renew if the carrier is not otherwise notified at a predetermined interval. Keep a record of the exact expiration date to evaluate and discuss your company needs prior to renewal. Negotiation leverage will disappear when there is a new term in place.
2) Determine the telecom needs of your business. Evaluate the company needs for all lines, circuits, and other services. Reviewing inventory prior to contract renewal is essential to avoid buying to services no longer in use. What are the future goals of the business or challenges that may be faced? These questions will help your company structure a new agreement that can offer flexibility regardless of the business climate. Planning for the future and ensuring the new contract is favorable to your needs VS the carriers is critical.
3) Carriers will negotiate if needed. Virtually all carriers will negotiate the terms of the contract. Carriers want to maintain business. However, a small amount of front end due diligence can have a dramatic impact on the outcome. Remember, it is in their best interest to work with you. They realize this is a competitive climate and having that research in your arsenal can provide significant impact.
4) Review the Offers. After gathering information and sharing your needs, your next step is to review your quotes. Remember that there are many ways that pricing is presented. Also, depending on your situation, a strong, binding SLA, a good Business Downturn Clause or a large signing bonus may have a much greater benefit than a slightly lower cost per minute. Make sure you have enough information to make an informed decision.
5) Before signing the new contract Read, reread and read again. Having another set of eyes review from a legal perspective in telecom law is also helpful. Make sure all fine print and any hidden fees are brought to the table. Review each and every component of the proposal and ensure that it is also represented properly on the contract. Review the expiration date and discuss any fees associated with early termination.
Every company situation is unique and different. As such it is important to note this is not an all inclusive list of contract components. Depending on the complexity of your situation you may want to bring in a professional to sort through all of the minutia. Regardless of your needs, the items above can make a significant difference in the success of your renewal. Happy Negotiating!