The search for a telecom contract that gives your organization everything it needs without bleeding your budget dry is a delicate process. Telecom carriers operate in an extremely competitive market—and they know that you have a lot of options.
In order to scoop up your business before you look elsewhere, carriers will often push through the contract process in order to get a deal done as quickly as possible. What a carrier loses in pricing during a negotiation they may make up on the back end with provisions that hurt the customer long-term.
It might seem as though it’s impossible to gain any sort of advantage in the negotiation process. However, there are variable clauses in contracts that would serve you well to know in advance.
Start by doing your homework. Know the changes in the marketplace and build a keen understanding of the different options available to an organization such as yours. When you do your due diligence, you could end up with a telecom contract that’s clearly stated, fair, and full of features that meet your needs and circumstances—imagine that!
In an effort to help you capture all the critical details when negotiating, CCi Voice presents several key tips when starting the telecom negotiation process.
1. Stay Away From Auto Renewals
Here’s a classic example of a sneaky way carriers try to get one over on you. Providers will either try to sell you on why auto renewals are a good thing or merely bury it in your contract so you sign without learning the details of the clause.
An auto-renewal clause allows carriers to automatically continue your contract unless you tell them specifically that you want out. Not only that, carriers often include a notice period of between 90-120 days—and if you don’t give the specified notice before your expiration, you miss your chance to terminate the contract or at least renegotiate the terms.
When negotiating your contract, be sure to ask specific questions about any potential auto-renew language. Ask the carrier to either reduce the notice period or remove the auto-renew clause entirely. You can also request that the terms of service revert to month-to-month at the end of the contract, giving you the chance to review the terms and make a decision that’s best for your organization.
2. Look For A Chronic Outage Clause
When your organization experiences on-going problems with circuit outages that are severe enough to disrupt everyday operations, this clause kicks in to terminate the contract without you having to harangue the provider.
Typically, chronic outages are defined as three (or more) outages of a certain duration within an agreed-upon length of time (usually a month). When that number of outages is reported during that specific time period, a Chronic Outages Clause gives you an out from the contact. This is usually contingent on you recording and detailing each outage as specifically as possible by opening a trouble-ticket with the carrier. No outage trouble-tickets created by you = no outage clause benefit, so be diligent. Be sure to answer questions such as “When did the outage occur?” and “How long did the outage last?”
You should define the parameters of this clause when drawing up a contract with your carrier. Make sure both sides have a clear understanding of the Chronic Outage Clause and ensure it is defined in plain terms so that there are no gray areas to provide any wiggle room for your carrier to back out of the clause. NOTE: Most carriers may not have such a clause. Click here to ask CCi Voice for an example to use if you need one.
3. Watch Out For Price Modifications
Some carriers will actually write language into their contracts that allow them to change the pricing in the event that their own costs go up. That’s right—if their operating costs become more expensive, they will make up the difference by raising your rates! And you can’t do anything about it because it’s written into your contract!
It’s a situation in which you most definitely do not want to find yourself. And the best way to avoid becoming a source of extra revenue for your carrier is to look out for any clauses that mention a hike in rates. Ask the carrier to be specific about the terms of any potential changes in pricing and be on the lookout for any fine print that says your carrier reserves the right to adjust your rate should tariff rates increase. Those changes should be reserved for when you renew, and at that time you will have other options, of course.
Sure, it might be hard to believe that anyone could be that underhanded when drawing up a contract, but there’s a lot of truth on the old adage, “it’s better to be safe than sorry.” Make sure your carrier is up-front with any potential pricing hikes.
There are variable clauses in contracts that would serve you well to know in advance.
4. Seek Out Favorable SLAs
Taking the time to review Service Level Agreements (SLAs) is a crucial part of negotiating any telecom contract. A contractual term that is often taken for granted, a quality SLA can yield positive results, while an SLA that falls short can cost your business with time.
SLAs outline specific services and quality parameters that you can expect your organization to receive from the carrier. Details such as notification times and service availability are drawn out in this section, which might also include features like security assurances, response times, rate reductions, and discounts that could be made available to your organization.
Take some time before negotiating with a carrier to research beneficial SLAs. This can give you the advantage of knowledge when drawing up a contract.
5. Don’t Keep All The Contract Terms Only As a Web Link!
Many telecom contracts today will be surprisingly short, sometimes only a single page! But don’t be fooled. Most of the business part of that agreement will be located on a terms sheet online, via a link mentioned in the contract. What is wrong with that, you ask? Well maybe nothing, at first. But let’s say your carrier learns through real life experience about a clause they should add to the contract in order to gain a financial benefit, and it was not there when YOU signed. If they add this to your term’s page online, and you already signed that one page saying you agreed to the terms online, then you are also subject to that new clause! We always recommend our clients cross-out that link, print that terms page and attach it to the agreement they sign. Then it is clear what they really signed.
6. Request Flexibility In Terms & Conditions
The whole point of running a business is to get it to grow, expand, and ultimately, be more successful than it was when it started. In this regard, any contract you agree on should be flexible enough to grow with your business—and not punish you for achieving measurable success.
A carrier contract should be a living document that adjusts when changes occur within your organization. Let’s say you add new locations during the term of the contract—ideally, you would be able to use more of the carrier’s services at similar or reduced rates. The terms and conditions of the contract should include language that plans for this and other scenarios. We have even seen an occasional “business downturn” clause, which can help you if your business takes a hit. This rate reduction at such a time can mean helping you get through a challenging ordeal.
Another "gotcha" moment in contracts: Some carriers will automatically extend your three-year agreement for another three years if you add an additional site to your existing four or six sites (as an example). While it might not be easy to get, we suggest you ask any new sites to have a matching contract termination date to your existing sites, if possible, or be "coterminous."
Examine the terms and conditions as closely as possible. When the carrier drew up the contract, they took great care to word the clauses in a very specific way. You should put the same amount of care into reviewing the contract that’s presented.
Finding the right telecom carrier is only the first step. The real process begins at the negotiating table, where you must lay out exactly what you want so that your potential partner in communications has your best interests in mind.
That’s where carrier consultants like CCi Voice come in. Do not go it alone. We negotiate everyday on behalf of our customers—we are battle-tested, with a keen sense of what’s right and what’s wrong with carrier contracts. We have your back in negotiations like this! And any carrier we find for you, we are fully responsible to troubleshoot any technical or billing issues, without charging you for our time. That is what a good carrier consultant SHOULD do!