Like it or not, vendor negotiation is a skill every CIO must perfect to become a successful business executive. Yet, for many IT leaders, reaching a deal that\u2019s both favorable and mutually equitable can be a tall order.\nFortunately, expert negotiators have developed an array of tactics \u2014 many not widely familiar to CIOs \u2014 to seal deals on terms that meet both operational and financial goals. Here are seven of these powerful tips.\n[ Learn from your peers: Check out our State of the CIO 2021 report on the challenges and concerns of CIOs today. | Find out the 7 skills of successful digital leaders and the secrets of highly innovative CIOs. | Get weekly insights by signing up for our CIO newsletters. ]\n1. Highlight the long-term potential\nWhen contacting a vendor for the first time, mention how you\u2019re looking for a partner open to establishing a major, prosperous relationship in the years ahead.\n\u201cSalespeople\u2019s mouths water at the perception of a huge opportunity that can pay growing commission checks for years,\u201d says Howard Katzenberg, CEO of spend management service provider Glean. \u201cMake it in their interest to provide discounts and other accommodations now to secure their potential upside in the future.\u201d\nLooking to the future also shows the vendor that your interests are aligned with theirs, and you are negotiating in good faith, Katzenberg explains. \u201cWhen salespeople hear about account growth and multi-year commitments, they\u2019re more willing to go to bat and seek preferred pricing for you,\u201d he notes.\n2. Beware appearing desperate\nAlways negotiate as if you have a choice of vendors to pick from \u2014 even if you have no other options because the vendor is the only business offering what your organization really needs. \u201cThe vendor doesn\u2019t know that,\u201d says Austin Dowse, CEO of Aimvein, an ecommerce shop for medical equipment and devices.\nDowse notes that a vendor\u2019s greatest fear is losing sales. Leading a sales representative to believe that you have a choice of vendors plays into this fundamental fear. \u201cYou have power,\u201d he states.\n3. Be open and straightforward\nBargain hard, but fairly. \u201cAntagonistic vendor relations never work and always burn bridges,\u201d says Andrew Plato, CEO of IT security services provider Zenaciti.\nWhile a little white lie or two isn\u2019t necessarily harmful, bald-face lying is almost always destructive. Because of this, Plato recommends being open, transparent, and honest while negotiating a deal. \u201cNobody wants to help a leader who plays games,\u201d he says. Pitting vendors against each other, playing tricks, lying, bluffing, threats, phony RFPs, and other underhanded ploys are more likely to backfire than succeed. \u201cNobody wants to work with a vendor who plays games, either,\u201d Plato adds.\nIntentionally withholding critical information is also a terrible tactic. \u201cVendors and prospects do this all the time, and it never works,\u201d Plato notes. For example: not having the funds necessary to acquire and deploy a technology and expecting the vendor to somehow provide a solution. \u201cIt\u2019s unfair to waste a salesperson\u2019s time if you\u2019re not ready to purchase,\u201d Plato states. The reverse is also true for vendors, he notes. \u201cDon\u2019t tell a customer you can meet their expectations when you cannot,\u201d\nIT negotiations aren\u2019t all that much different from any other type of business bargaining, observes Dmitry Bagrov, managing director of software development firm DataArt UK. \u201cAll negotiations rely on basic principles that are universal, and one of the most basic and most often forgotten is that the contract should be profitable for both sides.\u201d Squeezing a vendor for an unprofitable rate or any other unrealistic consideration will only result in an unhappy partner that may then look to increase its margin by supplying inflated estimates, inferior resources, and other types of corner-cutting.\nBagrov cautions IT leaders not to fall for the old Hollywood bromide: \u201cIt\u2019s not personal; it\u2019s business.\u201d Enterprises don\u2019t negotiate with each other, people do, he says. \u201cYou don\u2019t have to be a vendor\u2019s best friend, but treating the people who sit across the table like human beings is always effective.\u201d Negotiating with plain and simple language, rather than relying on confusing legal jargon, can also help a CIO meet his or her goals, he notes.\n4. Pay attention to timing\nMost IT professionals excel at digging into software usage and ensuring they\u2019re not over-purchasing in any vendor agreement. \u201cHowever, more often than not, we see IT kickoff renewal conversations within a contract\u2019s 30-day window, making it challenging to maintain control and leverage in negotiation,\u201d observes Jeff Swank, customer team vice president at Vendr, a SaaS procurement services provider.\nAnother big mistake is failing to fully understand the competitive landscape or leaving an inadequate amount of time to evaluate multiple options. \u201cWhen you have options, you have leverage,\u201d Swank notes.\nOptionality creates uncertainty for the vendor, which will likely level the playing field in a negotiation, Swank says. Most SaaS categories, for example, are filled with up-and-comers and feature parity increases year over year. \u201cIf pricing changes for a renewal seem egregious, 90 days gives you enough time to make a switch,\u201d he explains.\nOn the other hand, if a CIO is negotiating within a 30-day window, the odds of being able to switch solutions or go without a tool are close to zero. \u201cBuyers have zero optionality at this point,\u201d Swank cautions.\n5. Research for traps\nWhen connecting with a new vendor, particularly one without an extensive track record, it\u2019s important to check key facts about the company before signing any type of agreement. The investigation should include \u201cthe financial condition of the company, insurance held, and knowledge of third-party providers used,\u201d advises Reiko Feaver, a partner and IT contract specialist at law firm Culhane Meadows.\nFeaver also suggests finding answers to three key questions: Is the firm a shell company of an offshore organization? Is the firm\u2019s insurance held by a parent and not directly by the company (unless the insurance clearly covers the contracting party)? Does the company use actual employees, or does it rely on contractors, and, if so, where are those contractors based?\nIf the investigation raises any red flags, it\u2019s a good idea to move on to another vendor.\n6. Be upfront and flexible\nAvoid appearing purely transactional, Katzenberg recommends. \u201cAlways insist that whatever you need is critical for the company.\u201d This approach allows the CIO to rationalize the need to seek alternatives, since he or she has a duty to find the best solution at the most attractive price. \u201cMost vendors claim to provide tremendous value, so here\u2019s your chance to really insist that they put their best foot forward with offers,\u201d he says.\n7. Don\u2019t jump the gun\nBefore approaching a vendor, a CIO needs to clarify the buying criteria, including price, availability, performance, compatibility, and support. \u201cI\u2019m amazed at how many leaders charge ahead into buying new technologies or services without first establishing criteria for the vendor and\/or products,\u201d Plato says.\nIt\u2019s also essential to negotiate the final agreement price before starting an integrated trial, pilot, or proof-of-concept project. \u201cIt\u2019s common for stakeholders to go deep on a pilot without negotiating price,\u201d Swank says. By this time, the organization already has users utilizing the technology, with some becoming evangelists. \u201cWhen you put the work in upfront ... you lose a lot of leverage in the pricing discussion,\u201d he notes.