General Strategy

1. Leverage Growth, Usage, and Budget Constraints

• Lean into Growth and Usage: Use projected or actual growth in usage as a negotiation lever, but keep projections conservative to avoid overcommitting and to maintain leverage for future negotiations.
• Highlight Budget Pressure: Consistently emphasize budget limitations and the need for cost control to push for higher discounts or to avoid uplifts.
• Right-Size Commitments: Carefully evaluate actual usage and only commit to what you need. Overcommitting leads to overspending, while rightsizing can unlock discounts and credit rollovers.
• Tips:
  • Negotiate based on actual usage data and run rates, not supplier projections.
  • Use conservative growth estimates to avoid high uplifts and to maximize future flexibility.
  • Stress budget constraints early and often, especially when Fivetran is pushing for uplifts (e.g., CEO wants 15-20% uplift at renewal).
  • For ELA (Enterprise License Agreement) plans, remember that reducing usage does not lower cost—focus on minimizing uplift instead.

2. Engage Early and Use Competitive Pressure

• Start Negotiations Early: Begin discussions 2-3 months before renewal to maximize leverage, especially if Fivetran is changing its pricing model or if you anticipate a large increase.
• Leverage Competitors: Use quotes or migration threats from competitors like Airbyte, Estuary, or Census to drive discounts and concessions.
• Escalate When Needed: Escalation emails from executives or expressing willingness to move connectors can unlock additional discounts or favorable terms.
• Tips:
  • Reference competitor pricing and highlight Fivetran’s higher cost to justify your ask.
  • Engage in RFPs or request competitive quotes to create urgency and negotiation leverage.
  • Use executive escalation strategically, especially when standard discounts are not being honored.

3. Optimize Plan Selection and Contract Structure

• Choose the Right Pricing Model: ELA (unlimited) plans are best for high or unpredictable growth, but negotiate hard on uplifts and minimum spend. Consumption-based plans can be more expensive if usage is high.
• Negotiate for Rollover Credits and Waived Fees: Secure rollover of unused credits at renewal, and push for waived overages or promotional discounts on connectors.
• Push for Connector-Level Discounts: Target the highest usage connectors for the largest discounts, and ask for overall account discounts as a final negotiation step.
• Tips:
  • For ELA renewals, lead with a flat renewal or minimal uplift (5% is a win; CEO may push for 15-20%).
  • Do not reveal significant projected increases in MAR to avoid higher ELA pricing.
  • Request credit rollover clauses in writing and ensure they are included in the order form.
  • Run a free trial to identify which connectors should receive the highest discounts.

4. Manage Uplifts, Discounts, and Payment Terms

• Anticipate and Minimize Uplifts: Fivetran is enforcing uplifts (often 15-20%) at renewal—negotiate these down by referencing market rates, budget constraints, and competitive threats.
• Maximize Discounts: Standard discounts are 0-7%, but with strong levers, discounts up to 20% or more have been achieved. Connector-level discounts can reach 50% for high-volume connectors.
• Negotiate Payment and Billing Terms: Push for favorable billing terms (e.g., Net 45 instead of Net 30), but note that quarterly payments are typically reserved for contracts over $100k.
• Tips:
  • Gather and use price-per-M MAR figures to benchmark and negotiate effectively.
  • Highlight any unused credits and push for them to be applied to the next term or subtracted from the renewal cost.
  • Be aware that Fivetran’s pricing is on a logarithmic curve—the more you commit, the lower the unit price, but only commit to what you’ll use.

5. Relationship and Communication Strategy

• Leverage Existing Relationships: Strong relationships with your Fivetran rep can unlock higher discounts and more flexible terms, especially when combined with growth or budget levers.
• Communicate Frustrations and Service Issues: Share any dissatisfaction with pricing or service quality to justify your negotiation stance and push for better terms.
• Document Everything: Ensure all negotiated terms, especially rollovers and discounts, are clearly documented in the contract or order form.
• Tips:
  • Walk through the current agreement with your rep to fully understand the pricing model and identify negotiation opportunities.
  • Request screenshots or detailed breakdowns of usage by connector to inform your negotiation strategy.
  • Maintain open, professional communication and escalate diplomatically when necessary.

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