ERP Pricing Games: How to negotiate fair terms without the noise, pressure, or gimmicks.

Our very first guest post is from my friend Matt Conforti, Founder at Castl. Negotiating ERP contracts is an art and a science. I’m hoping this article sheds some light on what factors to consider before you start, and actual tactics to deploy when you get into it.

I worked on the sell side at NetSuite my first 3.5 years out of college - Great money, fast lifestyle, but here’s the truth about ERP; businesses are overpaying on license agreements, led astray with exploitative commercial terms, and stuck with a platform that’s expensive and time consuming to replace - This is seen across the industry (including vendors like SAP, Sage, Microsoft, and Acumatica).

I then worked on Castl, a purpose driven venture designed to negotiate on behalf of businesses procuring ERP - We simply take a % of savings from initial proposal through close. Low friction offers to capture the market opportunity as we get off the ground.

ERP = Hotel California. Check in anytime you want but you can never leave. Sharing tips and tricks below to help you navigate new instance procurement and existing vendor relations.

License Agreements

Introducing competition. Get through the demo cycle and make sure you have formal proposals from at least two vendors. By that point, they’ve invested time, resources, and internal visibility. With real risk of losing the deal in plain sight, buyers can negotiate opt-out clauses, restart rights during implementation, and often enjoy vendors cannibalizing each other on price.

Gatekeep a silent partner. Someone on your side who appears late in the game. Vendors have seen the move a thousand times, but it still works - they know they won’t win unless the silent partner feels like they’ve secured a win. That dynamic often leads to meaningful concessions.

Silence is a lever. The moment predictable cadence breaks, paranoia sets in. Preemptive discounts, term flexibility, and renewed “partnership language” tend to surface quickly. This isn’t about ghosting - it’s about professionally disrupting the flow and keeping the deal on your timeline, not theirs.

Use future growth as a bargaining chip. ERP vendors live on land-and-expand economics - more users, more modules, higher service tiers. Acknowledge LTV directly, and negotiate license structure based on your cash flow and revenue milestones, not their boilerplate.

ERP is a cost center. Nobody grows their topline by purchasing an ERP, but they scale more efficiently once it’s in place. If this is truly a long-term partnership, ask to speak with levels of leadership whose focus extends beyond this month’s quota. Their timeline should match the length of your commitment.

Commercial Terms / SOW

Term length is widely misunderstood. Most buyers assume vendors prefer multiyear contracts for higher TCV. In reality, they prefer shorter cycles so they can push aggressive renewal increases. In practice, two years is often the sweet spot - leadership turns over, strategy evolves, and it creates cleaner governance when change happens.

Financing is another landmine. Deferred payments are typically handed off to third-party institutions. Vendors may be forgiving; banks won’t be. Always confirm who is issuing the credit before you sign.

Renewal caps matter. Without one, you’ll hear terms like “uplift,” “re-leveling,” or “pricing alignment.” They all mean the same thing - price increase. Target two to five percent; anything beyond that is vendor-leaning.

Be wary of upsells packaged as “required.” Support, training packages, AM retainers - most of it is offshore volume work presented as premium service.

At Castl, that’s where our core values show up: truth, transparency, humility - calling a spade a spade and negotiating accordingly.

As far as a quantitative playbook, every vendor, buyer, and engagement will be met with unique variables based on scale and scope. Reminder, this is a purpose driven venture aimed to shed light on small to medium sized businesses not fully realizing their buying power.

If you’ve made it this far, thank you, and welcome connecting with anyone in the industry from CSMs, End Users, Consultants, you name it.

Written for Buyers, by Sellers.

Matt Conforti, Founder @ Castl