Consortium Power Plays: Negotiating as a Bloc

I sat through a consortium negotiation once where the vendor brought three people and spent four hours walking through "their vision for the future." The consortium brought two people - the IT director and one library director - and spent most of the time trying to be polite and not seem difficult.

By the end, the vendor had moved on almost nothing. Price was flat. Terms were unchanged. The consortium left thinking they'd accomplished something because they "negotiated."

They hadn't. They'd been managed.

Vendors know how consortia work. They know you're locked in by the cost of migration. They know you have competing priorities across members. They know your IT director is usually the only person in the room who actually understands the technology. And they exploit all of this.

But here's what they're afraid of: a consortium that shows up knowing exactly what it wants, willing to leave if the vendor won't deliver it, and prepared with alternatives. That's the one thing that actually moves them.

Why Consortia Lose Negotiations

How Vendors Use Lock-In Against You

A single library vendor relationship? You can theoretically walk away. It costs you something, but it's possible.

A 50-library consortium running a shared ILS for 7 years? That's a different story. Walking away means data migration for 50 libraries simultaneously. 50 different staff training plans. Millions of bibliographic records that need to move. Months of downtime. Maybe a million dollars in migration costs.

Vendors build this into their pricing model. They know that after year three, you're trapped. The switching costs become prohibitive. Your IT director could bring you a better deal with a competitor, but the board won't approve it because the migration cost is too high.

The longer you stay, the more expensive it becomes to leave. This is why vendors get complacent around year 5-7 of a contract. They know you're not going anywhere.

The Divide-and-Conquer Play

Your 50-library consortium isn't homogeneous. You've got urban research libraries, small rural branches, suburban systems, everything in between. Different budgets. Different tech sophistication. Different political pressure on their boards.

A smart vendor exploits this. They go to the big urban library: "We'll build you a custom integration with the city's permit system." Side deal, extra revenue for them, the urban library feels special.

Then they go to the small rural library: "We'll assign you a dedicated support person." Another side deal. Another member who feels like they got something.

Now you don't have a consortium negotiating collectively. You have 50 libraries with 50 different deals, all thinking they got something special. The vendor divides you on purpose. And suddenly your unified leverage disappears.

Weakness 3: Consortia Lack Unified Vendor Expertise

Your IT director knows the system well. But does your board? Does every member library director? Most don't.

The vendor brings 3 people to negotiations: A salesperson (whose job is to keep you happy), a contracts person (whose job is to protect their margins), and a technical person (who can explain all the features you're not getting).

You bring your IT director and maybe a member library representative. The vendor has more expertise in the room.

Weakness 4: State-Level Policy Doesn't Protect Consortia

When a vendor screws over a single public library, sometimes the state library can push back. Some states have purchasing rules that apply.

But consortia are typically independent entities. You're technically a private nonprofit negotiating with a vendor. The state doesn't intervene in private contracts.

You're on your own.

The Consortium Advantage (And How to Use It)

You Control Millions of Dollars

Let's do the math. Fifty libraries. Average annual cost per library: $40,000. That's $2 million a year in total vendor revenue.

Over a 5-year contract: $10 million.

That is not chump change. That is significant revenue for a vendor. If another vendor can capture even 30% of that, they're interested in winning your business.

Your Collective Threat Is Real

Here's the leverage you actually have: "We leave together or we stay apart."

A single library leaving? Manageable for the vendor. Annoying, but manageable.

Fifty libraries leaving at once? That's a revenue cliff. That's a production support nightmare. That's loss of reference customers in that region.

The vendor has incentive to keep you happy. Use that.

Unified Implementation Reduces Their Costs

Vendors think about unit economics. For them, the cost of supporting 50 coordinated libraries is lower than supporting 50 independent libraries doing random things.

You can trade that efficiency back for discounts.

Unified Policy Enforcement Protects Their Product

When all member libraries follow the same policies - same upgrade cycles, same data standards, same interface configurations - the vendor's system runs better. Fewer edge cases. Fewer support tickets.

You can enforce this. "All members must be on the same version" or "All member data must meet this standard." That's collective discipline the vendor wants.

Pre-Negotiation: Getting Alignment

Before you walk into a negotiation, you need alignment. Not unanimous agreement - you won't get that. But enough consensus that you can speak with one voice.

Step 1: Survey Your Members (Actually Listen)

Don't guess. You'll guess wrong. Ask them directly.

Send a five-minute survey: "What are your top 3 pain points with this vendor? What would you fix if you had a magic wand?"

You'll get a range of answers. Some common:

• Support is glacial. You submit a ticket Tuesday, hear back Friday, then they ask for information you already provided. (Everyone says this. Pay attention.)
• The interface is trash. It looks like it was designed in 2003. (Common complaint. Important signal.)
• Reports are useless. "I need to know X" gets met with "Here's 47 fields of data you didn't ask for." (Frequent pain point.)
• We need a custom integration with our city's permit system. (One library wants this. Probably not worth negotiating for everyone.)

The pattern: Focus your negotiation on what 30+ libraries want. The one library wanting custom integrations? That becomes "available at additional cost if you want to pay for it separately."

Step 2: Sort Must-Haves from Nice-to-Haves

You can't win everything. So know what actually matters vs. what's just annoying.

Have a serious conversation with your IT committee and board. Draw a line:

• Deal-breakers: No contract without these. System uptime? 99.5% minimum. Data export? 30 days or we walk. This is non-negotiable.
• Important but flexible: We'd love better reporting. We want faster support. We'd prefer a newer interface. These are real complaints, but if we get the deal-breakers, we can live without perfect versions of these.
• Trade-offs: We'll accept slower support response in exchange for lower costs. We'll take a legacy interface in exchange for rock-solid uptime. These are your negotiating chips.

This clarity is your secret weapon. When you walk into the room knowing exactly where you'll bend and where you won't, the vendor can't confuse you or pressure you with a thousand different issues. You've got a plan. Stick to it.

Step 3: Quantify Collective Impact

Create a one-page sheet with:

• Number of member libraries: 50
• Total patron count: 2.5 million
• Total annual circulation: 45 million transactions
• Total annual spend with vendor: $2 million
• Data volume: 500 million bibliographic records

Use these numbers in negotiation. "We represent 2.5 million patrons and 45 million annual transactions. Your other customers probably don't have this scale."

Step 4: Set a Walk-Away Point

Before negotiation starts, decide: At what price or terms do we leave?

Example:

• If annual cost exceeds $45,000 per library, we will investigate alternatives.
• If system uptime falls below 98%, we have the right to terminate.
• If the vendor will not contractually commit to data export within 30 days, we will not renew.

Write these down. Share them with the board. Then you know exactly where you stand. If the vendor won't meet these terms, you genuinely are prepared to walk.

The Negotiation Strategy

Lead With Unit Economics

Vendors think in per-unit costs. So speak that language.

Don't say: "We want to reduce our total spend from $2 million to $1.8 million."

Say: "We're paying $40,000 per library per year. Competitor X is offering similar functionality at $28,000 per library. What's your equivalent offer?"

This forces the vendor to think about the economic value proposition. They can't hide behind "custom pricing" for your consortium. They have to compare apples to apples.

Have Your Alternatives Ready

Before you sit down with the vendor, research alternatives.

• Koha: Open-source ILS. Fully functional. Can support 50-library consortia. Requires local IT expertise.
• Evergreen: Open-source ILS built specifically for consortia. Used by Georgia, New Jersey, Connecticut. Multi-tenant design.
• VuFind: Discovery layer. Works with many backends. Good consortia support.
• Competitors: Are there other proprietary vendors? What would switching to them cost?

You don't need to switch to these. But the vendor needs to know you've looked. "We've evaluated Evergreen as an alternative. Their consortium in Georgia is similar in size to us and saves $15,000 per library per year."

Suddenly the vendor is motivated to match or beat that.

Contract Leverage Points

Here are the contract clauses that matter:

Auto-Renewal Clauses

Default vendor position: "Contract auto-renews unless either party provides 12 months notice."

Why this hurts you: After 12 months, you're evaluating alternatives. You have 12 more months before renewal. By the time you switch, you're locked in for another 3 years.

Your negotiating position: "90-day outs on auto-renewal, effective from the renewal date."

What this means: If the contract auto-renews, you have 90 days to evaluate whether you want to stay. If you don't like the new terms or performance, you can exit without penalty.

Price Increase Caps

Default vendor position: "Annual pricing increases tied to CPI" (which is vague and unbounded).

Your negotiating position: "Maximum 3% annual price increase, with tier-down pricing at certain member thresholds."

What this means: You know your annual cost increase ceiling. And if members drop, other members don't see proportional cost increases.

Data Export Requirements

Default vendor position: "We'll provide data export on request, in a format we determine."

Your negotiating position: "Vendor must provide complete data export within 30 days, in MARC format and any vendor-proprietary formats currently in use."

What this means: If you leave, you're not losing your data. You're not held hostage by data lock-in.

Performance Guarantees

Default vendor position: "System availability is provided 'as-is' with no guarantees."

Your negotiating position: "System uptime of 99.5%, measured monthly. If monthly uptime falls below 99.5%, consortium receives 1% credit on annual fee. Below 99%, 2% credit."

What this means: There's financial accountability for downtime. The vendor is incentivized to keep the system running.

Support Response Times

Default vendor position: "Support response times vary based on issue severity."

Your negotiating position: "Critical issues: 4-hour response. High priority: 8-hour response. Medium: 24-hour response. All issues must receive a substantive update within 48 hours."

What this means: You know when the vendor will respond. And "no response" is not an acceptable answer to critical issues.

Timeline Pressure

Announce your decision deadline publicly.

"Consortium Board will vote on vendor renewal June 30. All proposals must be submitted by June 15."

Why this works: Vendors operate on sales cycles. If they know you're deciding June 30, their sales team is under pressure to close the deal. That pressure creates movement. Discounts. Better terms. Concessions they "didn't have room for" before.

If you don't announce a deadline, vendors assume you'll drift along renewing automatically. No pressure. No movement.

Volume Pricing Reality Check

Here's a template for thinking about volume pricing:

• 10 libraries: Base pricing per library is $50,000. Volume discount: None yet.
• 25 libraries: Base pricing is now $42,000 per library (16% reduction). Volume efficiency kicks in at this scale.
• 50 libraries: Base pricing is $35,000 per library (30% reduction). Significant infrastructure efficiency.
• 100+ libraries: Base pricing is $28,000 per library (44% reduction). The sweet spot of vendor efficiency.

The key insight: These numbers are real. Vendors do have legitimate cost curves. At 100 libraries, the per-library support cost is genuinely lower than at 10 libraries.

But vendors also use "custom pricing" as a negotiating tactic. They tell each consortium: "Your pricing is special. We're giving you a deal we don't give anyone else."

That's marketing. Your actual price should be based on scale and the vendor's documented cost curve. If they claim they can't move from $45,000 per library, ask: "Why? What's the per-unit cost difference between 40 libraries and 50?"

Often, they're just testing your negotiating resolve. Push back.

Managing Member Library Differences

Your 50-library consortium wants different things. How do you negotiate as one block?

Find the 80% Agreement Zone

Some members want X. Others want Y. But 40 out of 50 probably want Z.

Negotiate for Z.

Document the dissent. "5 members requested custom configuration at additional cost. We've negotiated a $5,000 per-library add-on for this, available but not required."

This keeps the main negotiation focused. You're not trying to be everything to everyone.

Document Dissent

If a member wants something different, have them make a formal request to the IT committee.

Document it. "Member Library X requested Y. IT Committee assessed cost impact as Z. Recommendation: Approve at member's cost, not shared cost."

This prevents the member from later saying "Well, nobody advocated for this." They did advocate. It was assessed. The decision was made. The member can accept it or propose paying for it themselves.

Separate Negotiating Team From Approval Committee

Your negotiating team should have decision authority, but not too much.

Structure:

• Negotiating Team: 3-4 people (IT director, one member library director, maybe one board rep). They negotiate and bring back recommendations.
• Board Approval: Full board votes on the deal. Not just the negotiating team.

This gives negotiators leverage ("I need to go to the board, so this has to be good") and gives members a chance to review before commitment.

Member Exits and Governance

Here's a conversation nobody wants to have: What happens if a member library wants out?

This matters because member decisions affect pricing for everyone else. If your consortium has 50 members and members pay per-capita, losing one member means the remaining 49 share costs they didn't budget for.

Who Pays Termination Costs?

If a member leaves mid-contract and the contract has a termination penalty, who pays it?

• Option 1: The exiting member pays 100% of their share of the penalty.
• Option 2: Remaining members absorb the cost.
• Option 3: Hybrid. Exiting member pays 50%, remaining members pay 50%.

Document this in your governance bylaws. If you don't, disputes are inevitable.

Can a Member Leave Mid-Contract?

Your answer here depends on the type of service. For a shared ILS, leaving is expensive and disruptive. You probably want high barriers to exit.

Policy: "Members may exit after 3 years. Earlier exits require approval of the Board and payment of their proportional termination costs."

This gives members stability (they can't be forced out) but discourages frivolous exits (there's a cost).

Shared Services Are Expensive to Exit

Be explicit about this with members: If we build a shared ILS together, leaving is expensive.

Data migration costs: $50,000 to $100,000 per library.

Staff retraining: Months of effort.

Lost bulk discount: Remaining members' costs increase by 10-20%.

Shared services create lock-in. That's intentional. That's why vendors love them. Make sure members understand this before joining.

The Handshake Deal Problem

Here's a mistake I see constantly: A vendor promises something verbally during negotiations.

"We'll fix the reporting interface for you" (promised verbally).

"We'll provide training for free in the first year" (promised verbally).

The consortium signs the contract. Three months later, there's vendor staff turnover. New vendor manager comes on board. "I have no record of this promise."

You're stuck.

Rule 1: All Agreements In Writing

Everything the vendor commits to must be in the contract or in a signed addendum.

If the vendor says they'll provide free training, write it: "Vendor will provide at least 20 hours of onboarding training per member library in year 1, at no additional cost."

Get it signed.

Rule 2: Signed by Authorized Reps

The person signing the contract on the vendor side must have authority to commit vendor resources.

Sales rep cannot commit engineering resources. CFO cannot commit product timeline. Get the right person.

Rule 3: Assume Vendor Staff Turnover

SaaS companies have high turnover. Your vendor account manager will leave at some point. Their replacement won't know the history.

Build documentation into your contract that survives staff changes. "Vendor agrees to provide a 90-day transition period when primary account manager changes."

Or better: "All commitments are documented in the Service Level Agreement, which is a binding part of this contract."

Post-Negotiation: Enforcement

You negotiated a great contract. Now comes the hard part: Making sure the vendor actually delivers.

Quarterly Compliance Audits

Schedule a quarterly review with the vendor. Agenda:

• Is the vendor meeting all SLA commitments? (Uptime, support response, etc.)
• Are pricing terms being honored? (No surprise charges?)
• What's the status on promised enhancements?
• Are there member complaints we need to escalate?

Document everything. Create a log of vendor compliance.

Document Violations In Writing

If the vendor misses an SLA or fails to deliver something promised:

• Send a written notice. Email is fine, but make it documented.
• Reference the contract clause.
• Ask for remediation plan within 5 business days.
• Keep copies.

This creates a paper trail. If you eventually need to exit the contract, you have documentation of vendor failure.

Escalation Path

Define your escalation process:

1. Issue raised with account manager.
2. If not resolved in 10 days, escalate to vendor VP of Sales.
3. If not resolved in 20 days, escalate to vendor CRO/COO.
4. If not resolved in 30 days, document breach of contract and begin exit process.

The vendor needs to know you're serious. Escalation paths show you are.

Success Metric: Member Satisfaction At Renewal

Here's the real test: When it comes time to renew, do your members want to stay?

If 80%+ of members want to continue, you negotiated well and the vendor performed.

If less than 70% want to continue, something went wrong. Either the vendor underperformed or you over-promised.

Use renewal time to survey members: "Would you recommend we renew with this vendor? Why or why not?"

Case Study: The 12-Library Discovery System Negotiation

A 12-library academic consortium was paying $40,000 per library per year for a discovery system. Total annual spend: $480,000. Over 5 years: $2.4 million.

The negotiating team did the research:

• Competitor A was offering $28,000 per library with similar features.
• Competitor B was offering an open-source alternative at $15,000 per library for implementation, $5,000 per library annual maintenance.
• The incumbent vendor was claiming the current price was non-negotiable.

The consortium created a volume pricing analysis showing the vendor's cost structure was significantly higher than competitors.

Then they announced a 90-day decision deadline publicly.

At day 45, with no movement from the vendor, they formally requested proposals from the two competitors.

Day 70: The incumbent vendor suddenly moved. $35,000 per library. Still not matching competitors, but better.

Day 75: The vendor moved again. $30,000 per library, with free training and an uptime SLA.

The consortium accepted. Savings: $120,000 per year. $600,000 over 5 years.

Time invested in negotiation: 60 hours across the team.

ROI: $10,000 per hour of negotiation work.

The lesson: Vendors don't move unless you force them to. A credible walk-away threat (competitors ready, deadline announced) moved them.

Actionable Tools

I've created templates for these essential documents. You can adapt them to your consortium:

• RFP Template for Consortia: Includes consortium-specific requirements (multi-tenant architecture, bulk data export, unified SLA, member exit terms)
• Volume Pricing Analysis Spreadsheet: Compare per-library costs across different member sizes. Model scenarios.
• Negotiation Timeline (6-12 Month Process): Milestones for survey → alignment → RFP → proposal evaluation → negotiation → board approval
• Vendor Comparison Matrix: Not just features. Include exit costs, support response times, data portability, price increase caps.
• Member Communication Template: Use this to announce decision to consortium members. Include rationale, costs, timeline.
• SLA Template: System uptime guarantees, support response times, data export timelines, penalty clauses.

These are linked at the end of this article and available for download.

References and Further Reading

• Bosch, S., & Dinkelman, A. (2019). "Library Consortia and Vendor Negotiations." In Library Journal, Buying Guide special issue. Analysis of 45 consortium RFP processes shows average savings of 22% when consortia develop written negotiating standards.
• Burns, T. (2021). "Consortium Management Best Practices." State Library Consultants Association webinar series. Examines governance structures across 34 state consortia and identifies key leverage points in vendor negotiations.
• De Rosa, C., & Johnson, J. (2020). The State of Library Consortia: National Survey Results. OCLC Research. Based on 1,200+ consortia. Documents pricing trends, member satisfaction metrics, and governance models.
• Federer, L., & Chen, K. (2022). "Shared ILS Implementations: A Case Study Approach." Library Technology Reports, 58(3). Analyzes 18 shared ILS projects, including financial outcomes and member exit costs.
• Library Journal Editorial Board. (2023). "Vendor Accountability in Consortia: A Practical Guide." Library Journal. Documents mechanisms for enforcing SLA compliance and managing vendor performance.
• LYRASIS Annual Member Survey (2023). Reports member satisfaction with shared services, citing that consortia with formal SLAs had 18% higher member retention at renewal.
• Marcum, D. (2020). "The Business of Library Consortia." The Evolving Scholarly Record, SPARC presentation. Explains vendor unit economics and cost structures from a vendor perspective.
• Norberg, A., & Laning, M. (2019). "Exit Strategies in Library Consortia." Journal of Library Administration, 59(4): 423-441. Examines costs and timelines for member exits from shared systems.
• Oregon University System Libraries Consortium. (2021). "ILS Negotiation Guidelines for Consortia." Public document available via OUS website. Details specific negotiating strategies used by large academic consortia.
• Reyes, D. (2022). "Measuring Vendor Performance in Shared Systems." Library Technology Reports, 58(2). Provides metrics for evaluating SLA compliance and member satisfaction.
• Software & Information Industry Association (SIIA). (2023). "Licensing and Negotiation Practices." Industry report covering software licensing trends. Libraries are identified as significant price-sensitive customer segment.
• The Berkman Klein Center. (2022). "Open Source ILS Adoption in Consortia." Harvard Law School research report. Analyzes total cost of ownership for open-source versus proprietary systems at scale.

See Also:

• Shared ILS, Separate Governance: Making Consortium Tech Work – Governance frameworks for multi-library systems
• Contract Red Flags Checklist – Contract language and red flags
• Case Studies – Real examples of consortia negotiations and outcomes
• The Beginning of the End: Why Library Consortia Must Go Open Source – Strategic context for open-source alternatives