Negotiating with customers throughout a project is a complex and ongoing process. Defining the final negotiation point is especially challenging. Before the tender is submitted, customers often negotiate terms to ensure the project aligns with their expectations.
I’ve faced this situation many times, where it’s tough to determine the final negotiation stage. In corporate settings, pricing negotiations usually go through multiple layers. After the initial discussion with key stakeholders, the proposal often moves to a purchasing committee, which applies further reductions. Once the committee agrees on a price, it goes to the board for approval. However, if the board finds the price too high, they send it back for revision.
The process feels endless. At first, when we reach an agreement, we feel optimistic about the deal. But that excitement fades quickly when the customer asks for a revised, lower price in another meeting. Even after submitting a competitive tender proposal, the purchase committee may still demand cuts, followed by the board’s review. This back-and-forth journey seems never-ending before a project can finally move forward.
I’ve also experienced cases where we submit proposals with accurate effort estimates, only for the customer to say they don’t have enough budget for the year. This is a common response. We are often asked to significantly reduce the price, even though it barely covers the project costs. To maintain the relationship and sustain business, we reluctantly accept these terms, though it leaves us internally frustrated.
Annual Maintenance Contract (AMC) discussions are also challenging. Customers demand world-class 24/7 support, but they expect to pay minimal fees, often trying to reduce the AMC rate to nearly zero.
When customers publish an RFP, they outline the scope vaguely, leaving room for them to add more requirements later. Initially, the project scope may appear limited to simple operations like insert, update, or delete functions. However, once development begins, their expectations grow—almost like building a rocket that can fly without fuel. They are determined to make the project a success because they want it to become a signature achievement.