We're often asked "how can I tell if the deal I have negotiated is a good one or not?" Our answer is, of course, it's hard to tell without some work and actually you shouldn't have finalised any deal without knowing how it compares.
We were recently asked to look at a franking machine contract by the bursar of one school. It turned out that another member of the admin team had renewed the contract just two months prior to this meaning we were unable to help. However, as we had the information we decided to do a quick desktop analysis of what they had, the idea being to hopefully show they'd got a good deal.
Sadly, the reverse was true. The contract they have negotiated is more than 16% higher (around £1485) than what we could have achieved across the five year term of the contract. For a franking machine contract that's a big difference.
It's easily done. The person renewing the contract freely admitted that they simply didn't have the time to properly research the options and as the offer on the table was less than what they were currently paying they assumed it was a good deal. The fact is they were already overpaying and so whilst the new contract offered a reduction in cost it was still higher than a 'good deal'.
You really do need to try and benchmark against at least two additional suppliers to add an element of competition to the process as well as check offers from more than one source. If you don't have the time to do that get someone else in to do it for you. In our case Minerva operates on a percentage of savings remuneration model. So, if we do the benchmark exercise for you and there are no savings, because you are already getting a good deal, then there's nothing to pay and you know you're getting good value for money. If we do identify savings then you just pay us a % of the savings for the first year only and the rest is yours to keep.