Can negotiation help you lower the cost of an LMS? What is negotiable? Is it worth it? How do you do it? We can help! Our founder and Lead Analyst, John Leh, has been on the front lines of LMS negotiations for more than 25 years, navigating buyers and sellers through more than $100 million in contract value.

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

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

Negotiating the Cost of an LMS Buys You More

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

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

For instance, vendors can offer more resources, free modules, better license tiers, incremental services, extended contract dates, and timing incentives. Buyers can negotiate on all of these. You can also offer incentives of your own, including participation in vendor case studies, joint marketing programs, reference calls, and much more.

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

How to Negotiate the Cost of an LMS

This is a great starting question: How can we negotiate? If you haven’t previously negotiated for large technology systems, it might seem daunting. But it’s not if you know how.

As with several other steps in the LMS Buying Process, preparation is the key to success. This will make you feel more comfortable as you start the vendor discussion.

Your learning system selection team can 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?

You can find answers to these questions and more in Talented Learning resources.

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