Lower the Cost with Negotiation – LMS Buying Process Step 9

Can you lower the cost of an LMS with negotiation? What is negotiable? Is it worth it? How do you do it? We can help! Our founder and CEO, John Leh, has been on the front lines of LMS negotiating for over $100,000,000 of learning systems buying and selling.

If you are buying an LMS or learning system online without talking to a salesperson, then negotiation isn’t possible. But in all other cases, you are leaving money or opportunity on the table if you don’t negotiate on the cost of an LMS.

Vendors expect you to negotiate. They know creating learning websites is a huge investment for your organization. They also know that if you’re satisfied and grow your learning business, you’ll be back when it’s time to expand.

Negotiating the Cost of an LMS Gets You More

In every organization, the available budget for learning initiatives is only so big, and must be divided among the learning platform, content and marketing. Ideally, you want to spend less on the software so you can allocate more to the items that will keep users engaged – like compelling content.

Negotiations aren’t limited to license costs and haggling over money. In a learning system solution sale, there are many other areas of leverage and impact, and these might not be recognized unless negotiation over the cost of an LMS takes place.

Vendors can offer more resources, free modules, better license tiers, incremental services, length of contract and timing incentives. Buyers can negotiate on all of these and offer incentives of their own, like willingness to do case studies, joint marketing, reference calls and much more.

As we said, vendors expect to negotiate – especially when they are close to winning or losing a customer – and most build a discount factor into their pricing. If the opportunity to save some money on the cost of an LMS is there, you might as well take it.

How to Negotiate the Cost of an LMS

This is a great starting question: How do we negotiate on the cost of an LMS? If you haven’t negotiated for large technology systems in the past, it might seem daunting, but it’s not if you know how.

As with several steps throughout the LMS Buying Process, preparing in advance is key to success and will make you feel more comfortable as you start the vendor discussion.

Your learning system selection team should prepare by reviewing these questions, working out the position you bring to the table, and knowing your non-negotiable items and limits.

• When should we negotiate?
• With how many vendors?
• What is our goal?
• What is our leverage?
• What if the vendor says no?
• Do we negotiate all at once, or little by little (one item at a time)?
• Are we willing to use timing, contract length, services and advocacy as bargaining chips?
• How can we get the vendor more invested in our success?

The answers to all these questions and more can easily be found in the Talented Learning Center resources.

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