There is room for haggling on IT prices.

I have just come across an invitation from a leading accounting software vendor to a finance director of a large UK plc to attend a free evening seminar on IT developments. The event is supported by a top five consultancy.

Sounds ok so far. The venue is in Oxfordshire at one of the UK’s foremost restaurants. This invitation includes a free night’s accommodation for the FD.

Looks great from a personal point of view as I guess the cost of a meal and accommodation at this venue would run to several hundred pounds.

Professionally however this does raise some interesting issues.

Firstly, should an FD accept this sort of invitation? Does it smack of bribery? At what point does corporate hospitality for a prospective client become excessive? It is generally acceptable to go to a free workshop run by a supplier with wine and snacks afterwards. Why not an evening workshop with overnight accommodation to avoid the risk of drinking and driving?

I guess there is no clear answer to this question.

Secondly, why does a top IT company and an equally leading consultancy and audit practice need to go to this length to get a dialogue going with a potential customer? And of course, what message is conveyed to a FD regarding the ethics of these organisations?

The position is clearer on this point. Good sales people know that building relationships is key to winning a deal. What better way to do this than over fine wine and food – particularly when you have a captive audience?

This process also has the benefit of finding the occasional FD who is bored in their job and enjoys a jolly. Regrettably for their employers some FDs are willing to do business with people who provide the ‘perks’ that go with the role. With the profit margins from IT products and services, suppliers can afford to wine and dine without limit if it secures new business.

So what are the lessons a buyer can pick up from this?

Clearly a cautious approach to engaging the services of someone who touts for business in this way is required. A sales person who is good at building relationships doesn’t guarantee that the product or service the company provides is right.

Buying processes need to be sufficiently rigorous to establish the real facts behind the sales veneer. FDs might be better off spending their time talking to people who will deliver the service post sale rather than the ‘pre-sale’ employees. Time spent this way can help uncover what the supplier is really like rather than relying on the sales talk, which can be highly theoretical.

Perhaps there is also the opportunity to haggle more on prices if the computer industry can afford to entertain in this way? ?:

Related reading

HMRC banknotes