Service Provider Relations: Take the Driver’s Seat to Negotiate a Successful Partnership with a Service Provider

You’ve heard the old saying, “You have my word.” Or maybe you know the song, “Promises, Promises.” There’s another saying that I try to remember every time I help clients with contracts: “Talk is cheap.” If you want to have a lasting and successful partnership with a service provider, then you and the service provider need to develop a contract that gives you both what you need — perhaps not all that you want, but what you need. Both parties should walk away satisfied that they have a transaction that will be profitable for them and will sustain their relationship over time.

The companies that I work with create products and services to sell to other businesses
or the general public. Negotiating contracts is usually not part of their core business. They probably have negotiated product contracts, which can be very complicated, and they may have negotiated services contracts, such as for printing. But most have not negotiated an outsourcing contract to transfer services that are usually done in house — such as accounts payable — to a provider outside of their own company and potentially overseas. 

On the other hand, service providers sell sourcing services to companies and must negotiate multiple contracts each year as part of their core competencies. So what should companies do to level the playing field? This ISG white paper suggests getting in the driver’s seat — and developing a negotiation strategy that gives you control from start to finish.