Section 2: Choosing the Right Dialer – Negotiating the Best Deal

Gather Your Team’s Needs, Define an RFP

Now you should be at the point where you have analyzed your situation and have defined the right kind of dialer solution to gain the greatest leverage in your organization.  Now you should start researching specific solutions from the different vendors.  Developing a request for proposal (RFP) is a best practice that makes sure you and your team has clearly defined the requirements of your business.  With your goals and processes in mind you will be much more comfortable approaching the different vendors that are in the market.  You should request a response to your RFP from several companies that offer solutions that are known to offer the capabilities you desire.

Success during the negotiation stage comes from having carefully researched your options. This gives you greater confidence and often cuts the time to make a decision nearly in half.  The vendors will also have greater confidence in you and will put their best foot forward in presenting their solutions and negotiating terms and pricing.  Now you should go further and define your decision-making process, your project plan, your data formats, necessary deliverables, etc.   Set the agenda early on and pre-schedule meetings weekly or sooner to keep the project moving while you narrow down to a short list of potential vendors.

Encourage input, buy-in, and feedback throughout your organization during the entire process.  Gather the needs from your team and define a committee or group consisting of management, executives, technical personnel, and users from both marketing and sales.  Also make sure you have a finance representative involved early on as well.  Use a systems approach that includes a macro view similar to this model:

Analysis – Design – Implementation – Evaluation

Define all of your current processes and lead sources that will feed the dialer.  Then define the processes that the dialer will feed.  Flowchart the overall system and drill down as needed.  Brainstorm then prioritize your key requirements.

Here is a list of key question topics that may be helpful as you gather information from your team:

  • Premise versus hosted
  • Predictive versus Power Dialer
  • B2B versus B2C
  • VoIP versus TDM (Long Distance)
  • Use vendors VoIP/TDM or provide own
  • List sources
  • Lead sources / source tracking
  • Real time lead capture capability
  • Skills/geography lead routing needs
  • Lead transfer capability
  • Lead duplicate check capability
  • Time of day / time zone calling
  • Call back event scheduling
  • Interface design and features
  • Remote agent / telecommuting capable
  • Reporting and analytics
  • Time card tracking / agent stats
  • Data import capabilities
  • Pre-import data scrubbing
  • Maintenance and upgrade policies
  • Customization capabilities
  • Vendor time in business
  • Contract requirements
  • Payment terms / penalties
  • Customer references (more on this)
  • Implementation practices
  • Additional modules and functionality
  • Consulting and training capabilities
  • CRM integration capability
  • API / Web Services

Many companies intentionally package their products in a way to make it difficult for an easy ‘apples-to-apples’ comparison.  For example, some hosted dialer companies charge strictly by the minute by elevating their per-minute charge for long distance to include the telephony infrastructure and software costs.  Others break out their charges between dialer port infrastructure, software, and long distance or VoIP minutes.  You should run models by researching your current usage patterns and compare it to the cost models that are presented.

Another tactic that varies between dialer vendors is how they combine the features and functionality.  Some charge more but include more functionality, others break it out and charge for each individual module or feature.  By clearly defining your RFP, you will buy what you need and will avoid paying for things you have not defined as necessary to your organization.

The best vendors typically are very competent at driving the implementation process, but even the best vendors will not make up for poor preparation on your part.  Make sure you have all of the necessary approvals or buy-in from executives, management, finance, technology, and users that will allow you to follow this project through.

One best practice is to measure a baseline of performance in such areas as daily dials, phone time, contacts, qualifications, etc., for a sufficient time (3 to 6 months) prior to the purchase of a dialer solution so that there are clear metrics to determine the early success of the dialer.  Often the effort numbers are the earliest indicators that trends are moving in the right direction, this is not possible if a baseline has not been gathered.

Decision Point:
Define your goals and objectives clearly and well ahead of time through a clearly written RFP document.  Get input from everyone on your team who needs to be involved.  Get approvals and buy-in and set expectations with enough room to make up for delays that will inevitably happen.  And lastly, gather your baseline of performance for several months prior to installation of the dialer.  This holds you and your vendor more accountable to the effort and results you desire.

Research Credibility and Longevity of Vendors

Now it is time to lift the hood and see what is underneath as you narrow your vendors down before you make a final choice.  It is wise to keep two or three viable vendors in the race until the finish line.  Sometimes this isn’t possible because of technical capabilities but it is still wise to do so for as long as possible.  Vendors are more aggressive when they face a known competitor on one hand and a potential customer who has obviously done their homework on the other.

Ask the hard questions first.  How long have they been in business?  Are they profitable?  What background does their management team have?  What are their service philosophies?  How stable and redundant is their infrastructure if they are a hosted solution.  How fast can they respond to troubles if they are a premise solution?   Will they allow you to make a real-life test drive with full capabilities before you have to commit to a long term relationship?  Run the dialer with your live data and lead sources and with enough calls to get a good feel.  This is often difficult in a premise solution, so ask for on-site visits to a customer that is similar to your own solution.  Take the time to test different kinds of scenarios that exist within your own business.  Get managers and users involved to make sure the experience from their point of view is suitable.

Research the entire support package available from each vendor.  Talk to people in their organization besides the sales teams.  Often it is wise to talk to support and consulting personnel before you are committed.  Look for companies who clearly define the boundaries of their capabilities.  This is a much better approach than those who promise everything and can’t deliver.  Support personnel will typically give you a much straighter shooting series of responses than the sales staff.  Ask how they will handle you after you have bought.  Talk about upgrades, integrations, time frames, implementation, ongoing support, escalation procedures, etc.

Decision Point:
Be careful of talking only to the sales staff of a potential vendor.  Watch for vendors who are slow to respond to your requests.  Be especially careful of vendors who do not respond to each question or issue you bring up.  This is often indicative of how they will treat you later.  Larger and more establish vendors will typically have stronger processes but will be slower to respond.

Look at the Big Picture

Expect that every vendor you work with will have some room in their price.  They expect to go back and forth before they arrive at final pricing and terms.  It is in the terms that you will gain leverage on the overall package that you end up with.  Consider the entire proposal rather than just the pricing.  Some items to consider are:

  • Onsite hardware
  • Software
  • Professional services
  • Maintenance
  • Upgrades
  • Support
  • Bug-fixes
  • Enhancements
  • Documentation
  • Training
  • Customization capabilities
  • Integration capabilities
  • Security
  • Backup Capabilities
  • Hosting infrastructure (if hosted)
  • Source code ownership in case of insolvency

Support fees, professional services, and maintenance fees are key areas that are open to negotiations.  There is typically quite a bit of difference between premise and hosted solutions in this area of the discussion.  Industry standards for ongoing maintenance for premise software is just under 20%, while hosted solutions typically roll maintenance and support into their overall cost structure.  Work on negotiating this fee and ask for a ceiling to any rate hikes that surpass the retail price index (RPI) or the consumer price index (CPI).

Sometimes a ‘lite’ version will not include these fees and you have to pay for service and support as you use them.  Clearly define the response times that are included and the Service-Level-Agreements (SLA) that are included in your agreement.

Consulting and Implementation

This is a key area to a successful implementation.  The costs will go up dramatically for customized or integrated solutions, but the cost is often offset rapidly by increased overall productivity when you can automate additional processes and lower labor costs.  Often you can tie down lower costs of customization during the overall system negotiation period.  This is difficult later after you have made a purchase.  Get in writing the capabilities they have agreed to include with the initial implementation.

Be leery of an organization that doesn’t ask a lot of questions, and that doesn’t spend time with each area of your company that will be involved in the final solution.

Decision Point:
The time to include customization and to gain valuable discounts on consulting and implementation is during the initial process, these ‘soft costs’ often make a huge difference in the success of the project and are an easy negotiation point to help you gain more value when considering the overall big picture.
Run the Cost Model

Even the best planning will leave some questions unasked and costs uncovered.  Things like costs for additional lists or leads to keep the new dialer productive now that it helps your agents make three or four times more contacts than before almost always come up.  This, of course, is not the responsibility of your dialer vendor, but you must take this into account for a successful dialer project.

Hosted solutions cost significantly less initially, but may contain hidden costs and licensing agreements.  Hosted solution vendors in this area are being quite disruptive and aggressive as they gain significant market share against the more traditional premise solutions.

Some things that will probably come up with your dialer vendor and should be examined before you purchase include many of the following:

  • data scrubbing
  • lead import setup
  • data storage
  • monitoring and recording storage
  • field or screen customization
  • custom reports
  • customer service and support
  • escalated service
  • emergency response
  • termination fees
  • integration costs
  • onsite visits and travel costs

Premise solutions contain similar hidden costs and delays, but they are often in different places.   You will need to plan for your internal equipment hosting, power, backup, security, bandwidth, and fiber connections, which often take several months to plan and deliver, especially if redundancy is considered.

You should check references from current vendor customers in the areas of hitting deployment deadlines and responsiveness to onsite or remote support.

Decision Point:
Make sure you negotiate a trial period of 30 or 60 days where you can opt out of an agreement if the vendor you have chosen has not been able to deliver up to your expectations.  This is also a time in which you can fine tune your relationship and make sure things are working.

Anticipate Growth or Cutback


Very few organizations are able to plan effectively for one year, let alone two years into the future.  With this being the case, make sure that you negotiate for price protection and reasonable limits to increases in fee structures going forward.  And give yourself room to reset commitments on at least an annual basis if your situation changes.  This is much more difficult to accomplish for a premise-based solution than a hosted solution, but still you need to make sure that you are able to lock in your expectations on pricing going forward if possible.

If your business is growing, and even if it isn’t, now is the time to anticipate the potential for growth and negotiate tiered pricing and volume discounts.  Always leave the option in place that if the market drops future pricing below what you have negotiated, that you have the built-in option to go to the new market pricing with your next level of commitment.

Also take the time to clearly define:

  • Price lock and excessive price increases with term renewals
  • Pricing application to future growth and new users
  • Long term contracts, commitments, and buy-out clauses.
  • Service Level Agreements (SLAs), Warranties, and Guarantees:
  • Training, Technical Support, and Professional Services:

Talk about future upgrades and product releases.  Make sure that you are well aware of platform changes and legacy technology issues.  This is almost a non-issue with hosted solutions, but is a huge issue that you had better address with a premise-based solution.

Decision Point:
This is an area of consideration that often adds greater advantage to a hosted solution.  Premise-based solutions reduce in value quickly once purchased, while part of the promise of a hosted solution is to always have the very latest and greatest advances in technology, interface, and capability.  This often makes a significant difference a year or two down the road when a premise customer cannot justify the cost of a new platform and has to compete with a hosted solution that offers the very latest innovations in productivity.  And if you decide to cut-back with a premise solution, you still own the extra capacity that now lies dormant.

Understand the Contract Details


Contract terms and definitions vary greatly between different vendors, but many things are fairly consistent.  Make sure you clarify exactly what the vendor means throughout each area of the contract.  As you go line by line with a vendor you will find many additional areas that you can clarify to greatly benefit your organization.  Make sure you understand rights of use as a key part of your negotiations.  Clearly define if there are limits financially or technologically around the number of users or concurrent ports.  Find out if you are charged by login users or concurrent users, by concurrent users or ports, is that in one area, the same server, or the same workstations?  These questions will help you.

Long Distance Billing Details Make a Big Difference

If you have a hosted solution that includes the long distance or VoIP, find out if you prepay minutes and if they ever expire.  If they supply the long distance make sure you have analyzed the billing increments and the decimal rounding on the bill itself.  Many vendors will charge 60 second call minimums and 60 second call increments thereafter unless you know to ask for 18 second minimums and 6 second increments.  Find out about the same questions for international calls.  These will almost always have a 30 second minimum and 6 second increments.  Dialers inherently make lots of short calls and you can find yourself saving 20% to as much as 30% on your long distance bill if you have been careful in your negotiations.  Ask to make sure that your invoice for long distance isn’t billed in 2 decimals, always rounding up to the next cent on every call.  This can cost you a bundle; always ask for 4 decimal billing.

Request the Right to Waive an Audit

This bit of advice won’t make any cost difference initially, but could make a significant difference to you down the road if you find that you or your IT staff has gotten lax in complying with licensing issues.  If a vendor audits you down the road you can be found owing a lot of money.  This usually isn’t an issue with a hosted solution, but even with a hosted solution it is wise to make sure you monitor your users and ports monthly to make sure you only pay for what you really need.

Decision Point:
We can’t stress this time-proven advice enough, get it in writing!

Perform a Background Check

One of the best places to start checking out a potential vendor is by looking at their press releases and their financial performance.  Ask to speak with their financial executive who will usually share more than you think they will, even if they are a privately-held company.

Things are much easier if they are a public company, but few dialer companies are.

Think like their sales staff thinks.  They have to continually improve sales.  So month-ends and quarter-ends are great times to get them to sharpen their pencil and ask for the pricing and terms they would probably never approve any other time.  And find out when the end of the fiscal year is coming up, if it is close you will want to consider using this time frame in your negotiations.  It probably isn’t wise to wait an undue amount of time if the dialer can make a significant impact on your company now, you would miss out on a lot of productivity while you wait to negotiate.

Press releases are a good point to steer by because they tell you a lot about the company.  If they are coming out frequently, then this company is growing and expanding and usually very innovative.  If they include hiring, product releases, partnerships, and awards, then you can rest assured that this company is actively growing and improving.  Look for companies that have a disciplined approach to publicity, this denotes steadiness and focus.

Decision Point:
Sometimes this extra research into financials, press releases, and company trends uncovers more information than you bargained for and will help you steer clear of companies who are struggling.  Watch for consistent growth and publicity for several years in a row to pick companies that probably are what they say they are.

References Offer Great Value, Yours and Theirs

References are extremely valuable in the process of purchasing a dialer solution, and in more ways than you probably think.  First, your reference is of great value to your vendor.  If you offer to become a reference that they can use fairly often, you will gain a great edge in obtaining more value in your negotiations.  Likewise, your vendor will also find them self going the extra mile with their staff to ensure that your reference is going to be a good one.

The best thing you can do is to offer your reference in printed form, but require in your agreement that if anything ever goes wrong in your relationship with them as a vendor they will need to guarantee to remove your reference statement from where ever they are using it in a reasonable fashion.  They will find themselves having to make doubly sure that you are always a happy and a valued customer.

Ask that they contact you and forewarn you before they actually use you as a verbal reference for a prospective customer to call so that you can be prepared and available.  This also dramatically increases your value to them and brings additional benefits to you.

Conversely, before you buy, ask for at least 2-3 good references of customers that are in similar situations to you.  The problem for you is that everyone has 2-3 good references and they will obviously give you their best.  The next request is the most powerful of all; ask for 2-3 BAD references also.  References of customers who had struggles with your vendor and can discuss how they were resolved.  Here you will still only get customers who now speak well of the vendor, but you will get a better picture than the first set of references.  Check them all and ask the hard questions.  Make a list before you call that comes right from your RFP document.  Be prepared and move fast so you don’t take too much time, remember, you may be on the receiving end of one of these calls soon.

Decision Point:
Offer to become a reference for your vendor, this gives you greater negotiation ability and leverage to ensure a better relationship over time.  Also ask to check 2-3 references that are good, and 2-3 that are bad, particularly references that had problems but that were resolved.  Be ready to bail if you uncover too many potential problems.
Invest in Your Own Negotiation Capabilities

Enterprise-class telecommunications vendors have long been known for their expertise in training their salespeople to negotiate to their benefit.  Even SMB vendors are very good at this.  They will have done this many more times than you.  But they often come up against buyers who have no idea at all how to proceed through a negotiation process.  When they meet someone who is obviously prepared to negotiate strategically, they will immediate recognize your skills, even if they are minimal and cut right to a better proposal for both of you.

This does not mean you need to invest in a month long course in negotiations, but you should review some of the ample materials just prior to moving into the negotiations process.  It is always best to have one more person with you in your decision making process with a solid commitment to carefully analyze decisions before they are made.

Contracts should not be intimidating.  Instead, look at them as the opportunity to finalize, clarify, and protect.  You can almost bring any form of protection in a contract to become a two-way or mutual barrier of protection by merely asking for it.  Don’t be afraid to redline a document and push for additional clarity.  Check with your key financial and technical personnel and forewarn them ahead of time so they can be expecting to put some time into the process of contract negotiations.

Outside firms will bring a fresh (but expensive) perspective.  If you opt to use one, it is wise to use them for the very first and last round for the perspective they can offer.  Do as much as you can of the busy work and research to save billable hours from an outside firm.

Decision Point:
Build a time right into your plan to refresh your own negotiation skills.  A simple book or Web site on the topic can be enough to dramatically impact the overall result when everything is done.  Mentally walk through the process and make a plan for what you will ask for in your negotiations so you will be prepared for when the time comes.

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