On Being Battered by a Large Bank // Part 2

Last week’s post discussed what to expect when you come face to face with Procurement, and how to best protect yourself.  This week I’m going to arm you with the Sales-Side Set Up.

Every proposal, even months before Procurement gets involved, should contain the Sales-Side Set Up (SSSU). The SSSU is the most important step you can take to minimise being battered by a large bank (or any other company with a heavyweight Procurement department).

What’s the SSSU? It’s a statement along these lines.

In putting together the pricing and other commercial terms set out in this proposal, we have made the assumption that our standard terms and conditions (set out here: url) will apply.  The key elements of our standard terms and conditions are:

[set out your key terms]

We are happy to discuss changes to our terms and conditions with you, but please bear in mind that changes to our standard terms and conditions are likely to result in changes to our pricing and commercial terms.

The point of the SSSU is to create a linkage between your terms and conditions and the commercial terms, so that any change to your terms and conditions has an impact on the pricing.

So, for example, if Procurement says “I don’t want your standard 100% cap on liability, I want a 300% cap”, you have the ability to respond “Yes, that’s no problem, we will increase our price by 5% [or whatever is appropriate] to allow for that”.

In other words, instead of the usual, sterile, legal arguments about the rightness or wrongness of a particular provision, the SSSU gives you a solid basis on which to stick to, or adjust, your position (as appropriate).

Obviously Procurement won’t like it, and will do their best to poo-poo it, but they won’t be able to undermine your logic and will (secretly) recognise its validity.

To be clear: the SSSU is not a magic bullet which resolves all the difficulties you will encounter with Procurement. However, it provides you with a powerful weapon which you can use as part of your negotiations.

Next week: Boxing Clever