Hosted VoIP Service Negotiations

By Gene Teglovic
Updated: January 30, 2011

After making the decision to implement a hosted Voice Over IP (VoIP) system for your business, and completing the basic research needed to understand different service provider options, it is time to strategize for upcoming negotiations. How you can get the best bang for your buck, while ensuring you get the best quality of service needed to keep voice operations in your organization running top-notch?

As with any product or service, you usually get what you pay for. However, there is always room for negotiation, and VoIP service providers today are motivated to make sales. Here are some tips for striking that balance between getting the best deal possible, while ensuring you get the quality and support your business deserves:

1. Knowledge is power. Prior to approaching service providers, thoroughly understand the latest VoIP technologies and market trends. The array of services available can be dazzling. For example:
   • Inbound and outbound calling - local, domestic, long distance and international
   • 800 service
   • Call routing, queuing, forwarding and transfer
   • Voicemail
   • Directory and operator assistance
   • Caller ID
   • Conference calling (voice and video)
   • Direct inward dial (DID)
   • E911
   • Attendant console, auto attendant
   • Music on hold
   • Moves, adds and changes - software, training and support
   • Varying data speed plans
   • Number porting
   • And the list goes on!
2. Understand what you really need to make your business run smoothly. This knowledge gives you negotiating power. Service providers know when their potential clients are informed. Or not.
3. When you have a short list, tirelessly research each and every provider. Find customer reviews, testimonials, and colleagues willing to discuss their experiences. What are others paying for similar services? What did they do to get the best deal? Are they happy with the quality of calls, service and support?
4. Ask to work with a single sales representative as you contact providers. Once someone understands your situation, it wastes your precious time to deal with someone different.
5. Consider a single service provider for your telephony and data needs. As you probably know from your research, most VoIP solution providers today offer a "unified communications" package that covers both basic traditional phone calling requirements and data needs. The more business you bring, the more negotiating power you have.
6. The smaller the service provider, the more motivated they are to get your business. Negotiating a lower price with a smaller service provider is easier than with a big player, but you may pay back what you save in monthly fees in poorer service quality and support.
7. The larger your operation, the more negotiating power you have. Money talks, and the more you have to spend, the more motivated the VoIP service providers will be to negotiate installation fees, monthly charges, and support contracts. Use the size of your business to your advantage.
8. Get written quotes from each vendor on the short list. When you have made your final decision, use the quotes from the other vendors to negotiate prices downward.
9. Ask to waive the equipment and data setup fees. Many service providers will do this, especially if you sign a longer-term contract.
10. Understand the termination clauses, and ask to negotiate those. Most will not, but it is always worth a try.

And finally, remember not to negotiate your final selected service provider into too much pain. Be reasonable. Know that paying fairly for a service usually means you will get the support you need, when you need it.