Why Do Service Providers Offer Compensation to HOAs?January 11, 2019
More than ever before, having fast, reliable internet access is essential for any household! Many associations, once familiar with bulk video services, are now looking to do the same with internet providers. Additionally, many communities are coming to the end of existing video agreements that may have only offered the bare minimum in services and are now looking for more options.
While bulk internet agreements are highly valuable to both the service providers and the associations, the negotiation for these services can be complex and stressful. In fact, many times, critical components of an agreement are overlooked and can have a dramatic effect on the community. However, if you know what to ask for, associations have the opportunity to negotiate a bulk service agreement that will provide their residents with great services for a great price. CCG has 16 years of expertise and has negotiated on behalf of thousands of associations nationwide. To make things a little less stressful, we have put together a few strategic tips and items for communities to consider before they sign a new bulk service agreement.
#1) Do Your Homework and Be Prepared
Before reaching out to providers for proposals, have a good understanding of what is important to your community. Associations that are most successful in obtaining a quality contract for their members are the associations that involve the residents from the onset. Hold town hall meetings, conduct surveys, or create a committee made up of a few residents. As a fiduciary, it is the board’s responsibility to obtain the best possible agreement for the community and the board must consider all aspects like price, equipment, services, and infrastructure. Involving the residents from the beginning is more likely to produce a higher level of community satisfaction when selecting the awarded provider.
#2) Understand the Data
Whether you’re an existing bulk customer or your community is considering bulk services for the first time, it is equally important to ask the providers on property for a penetration report. The information provided in this report will identify the number of residents that subscribe to a particular service. Some providers will even specify the different internet speeds being used by the residents. This information will help you make an informed decision on what is best for the majority of the community. For example, if 90 percent of residents are paying full price for Internet from one provider, it makes perfect sense to obtain a bulk internet proposal.
#3) Ask for a Design Plan and Scope of Work
If your community plans to have any amount of work done to the existing infrastructure or is considering a new provider, ask for a design plan and scope of work before signing an agreement. Although critical, it is often overlooked during the negotiation process. What is the provider’s delivery method? Is it Fiber-to-the-Home (FTTH) or Fiber-to-the-Node (FTTN)? Managed Wi-Fi or modem solution? Is the provider placing new inside wire or utilizing the existing inside wire? If you find yourself asking these questions, a design plan and scope of work will help you understand exactly how the provider intends on completing the project. It is particularly important when considering a new provider that is not currently on property. A new provider overbuild will involve a significant amount of construction and can be disruptive to the community. Understanding the project and communicating it to the residents will help make the transition as smooth as possible.
#4) Negotiate the Contract Language, Too!
A service-level agreement (SLA) is a critical component of a bulk services agreement. SLAs define the expected level of service, identify the way in which the services are measured, and clarify the steps needed to remedy any shortfalls. Most providers will initially include modest requirements in their SLA; however, it is the board’s responsibility to secure as many protections as possible. It is recommended to seek legal counsel or a consultant that has extensive telecom contract experience. A great bulk price is important, but it is equally important to get strong service-level guarantees incorporated into the contract. After all, what good is a low price, if the provider is not expected to perform at the level of service promised?
#5) Explore All Options
During the negotiation process, ask for proposals for multiple services from multiple providers. Test the waters and see what is out there! There are many new options, particularly for internet, that did not exist in recent years. Having a variety of options will give you the opportunity to pick what’s truly best for your community. This also gives you negotiating power as you can leverage multiple options from the competing providers against the incumbent provider.
These are just a few of the items that should be considered as an association looks to renew, add, or start a bulk services agreement. With the choices available in the market today, particularly for internet, it is a great time to get the best products, technology, and services for your community.