Blog - What we’ve learned about negotiating software contracts

[ivanagas]

Summary

Write a short paragraph on what this article is about. If applicable, what's the opinion or point we want to make in this article?

Our pricing, sales process, and discounts are transparent. For many others, this is not the case. To help companies succeed, share what we’ve learned about negotiating software contracts.

Related to: https://github.com/PostHog/company-internal/issues/1380

Where will it be published?

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• [x] Blog
• [ ] Founders Hub
• [ ] Newsletter
• [ ] Product engineers Hub
• [ ] Tutorials
• [ ] Other (please specify)

Why type of article is this?

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• [ ] High intent (i.e. comparisons and similar)
• [x] Brand / opinionated (how we work and why, etc.)
• [ ] High-level guide (concepts, frameworks, ideas, etc.)
• [ ] Low-level guide (step-by-step guide / tutorial)
• [ ] Other (please specify)

Who is the primary audience?

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• [x] Founders
• [ ] Engineers
• [ ] Growth
• [ ] Marketing
• [x] HackerNews
• [ ] Existing PostHog users
• [x] Potential PostHog users

What (if any) keywords are we targeting?

list any that apply

negotiating software contracts (320/m)

Headline options

suggest a few angles

What we’ve learned about negotiating software contracts

What we’ve learned about negotiating with software suppliers

How to get the best deal on software contracts

Will it need custom art?

• [ ] Yes
• [x] No

Outline (optional)

draft headings / questions you want to answer

• Play the sales cycle
• Many software contracts are entirely set by a sales person trying to hit quota.
• If you know the end of their quarter, you can wait until that point to get a juicy discount.
• Discounts can be deeper than you realize
• Ask the people you know what discount they got
• Some services discount 90+% from on paper, especially if you compare with a competitor
• “Charles Cook Framework for Low Effort Negotiating: I always just ask ‘is this the best price you can offer’ followed by 30s of silence.” (this was in reference to [buying a car](https://posthog.slack.com/archives/CT2BU33N1/p1690794790971029?thread_ts=1690457319.603169&cid=CT2BU33N1))
• You can almost always buy in bulk to lock in a better rate
• Volume, multi-year contracts
• Paying up front vs 30,60 day
• Annual contracts with quarterly or monthly payments.
• Discounts on future expansion.
• Build your own bundle
• Assume that everyone you are negotiating with will disappear once you finish a contract
• Negotiate support, SLAs in if needed. Also negotiate what happens if they break this. Support expectations.
• Turn off default renewal
• Many companies just renew their contracts by default because it is the default. A renewal gives you an opportunity to negotiate again and improve your contract.
• Have termination terms, you can negotiate to get your money back.
• Leverage non-monetary negotiating chips
• Comarketing, case studies
• Development work on integrations
• Get them to do work like forecasting costs

[andyvan-ph]

Newsletter worthy, potentially?