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Why Banks Should Not Go Digital when Negotiating with Technology Vendors

Your bank should ask for a face to face meeting with your technology vendors

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  • Written by  Banking Exchange staff
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Why Banks Should Not Go Digital when Negotiating with Technology Vendors

While technology is a key to the transformation that banks are going through, there are several reasons why your bank should ask for a face to face meeting with your technology vendors. They may resist, as it is not in their nature, but it is important not even primarily to get the best deal, but so that they understand your needs.

Here are six reasons, backed up by industry data to push your vendors to fly out to see you.  

1. Face to face delivery is key when negotiations meet for first time.  Norms of interaction are established.  Misunderstandings are resolved.

2. Negotiations are statistically more cooperative in face to face meetings than over the phone or Face Time.  Higher levels of warmth, rapport and trust come into play.

3. Data shows that results are better for more complex negotiations.

4. For technology negotiations, face to face meetings lead to a more Integrative outcome for what your bank is looking for, and more balanced distributions.

5. Writing has a higher impasse (non-agreement) rout, so it actually helps the technology firm as well to come in to see you.

6. It is a statistical fact that people lie and bluff more on email and on the phone  compared to face to face interaction.

However, there is one reason why it might make sense not to meet.  Some excellent in-person negotiators can be neutralized when communications are reduced to phone. If you are good at negotiation, you should meet face to face.  If you are negotiating with someone that is very good, you may want to change the medium. 

Even then when you know you are working with someone that is particularly good at negotiation it can still help to bring her into the office, as all six of the recommendations still apply. The key is to talk through the products and the value that the technology vendor brings. However, you can decide as a group internally that even though you are going to take the meeting, that you will not sign anything during on that day. This gives you a day or two to make sure that what they have said is accurate and that there was simply not a psychological reason that made you sign right then and there. Also, if your best internal technology analyst is not at the meeting or does not have time to test all of the benefits, it is best to wait.  

The bottom line is you are making a major investment in the future of the bank.  In this day where flying to see customers has been limited, it is also a great test of the vendor that the company is willing to leave the desk to come speak to you at least once.   

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