Marketing & Communications Strategy
- Under: Marketing & Communications Strategy
Like it or not, negotiations are part of our everyday lives.
Looking beyond raises and media buying rates, you see it on the street when a car lets a biker pass or when you call to lower your cable bill. We have learned to meet in the middle when making an offer on a house, haggling for souvenirs at a market abroad along with securing fair business partnerships.
While some analogize negotiating to a dance, I equate it to a seesaw where both sides aim to fall into an equilibrium. The duo needs to find the right balance so that neither participant feels like they are left hanging. To get there you have to work together talking through each movement and listening to what the other wants to do. You must be willing to give a little to take a little.
With that in mind, below are CHIEF’s tips for a stress-free, successful negotiation—whether it be for advertising rates, contract terms, internal relationships or client relationships:
Negotiating tip #1: Know what you want.
- Preparation is the key to confidence heading into a negotiation. Knowing what you want will be your north star throughout the conversation and help you remain centered—even if you get thrown a curveball. To figure out what you need to achieve, ask yourself the following questions:
- What am I asking for them to give me? For example, a specific rate (cpm, price, etc.), number of revisions, added value, agreement to terms & conditions.
- What do I need to be successful? For example, if you need to come into a specific magazine page rate to remain in budget for a client’s media plan, use that number as your goal.
- What is a fair deal? When it comes to media buys or salaries, analyze the marketplace to ensure your ask is in line with trends and standards.
Negotiating tip #2: Do the math and research.
Much like on the high school debate team, part of knowing that you have a fair point is having the information to back it up. It is rare for a partner to simply give you what you want—you are going to have to rationalize your request with data and information. Whether it’s through analyzing trends, researching audit statements or looking at your own company history, the homework you do on the front end will pay off when you are able provide solid reasoning to the partner. Here are a few items for your checklist going into the conversation:
- Industry benchmarks for rates, salaries, impressions, etc.
- Industry trends (Is the video ad market becoming saturated? Is newspaper circulation declining? Are other companies giving added value?)
- Past performance of the company you’re approaching. (Have they increased revenue this year? Are there any signs of trouble? Are there any holes you can poke in their business model?)
- A reason for why you want to work with them (i.e., unique value no other company can offer, reputation for being a high performer, outstanding partnerships, ability to reach a specific, hard-to-reach audience, etc.)
- A list of competitors who are also suitable and how they stack against the company for points of comparison.
Negotiating tip #3: Lead with partnerships.
Stronger relationships lead to tighter deals so keep this in mind whenever you’re meeting potential business partners or co-workers. Getting the best deal can be about who you know, but it’s also tied to balancing sternness with fairness. Remember the following:
- “You get more bees with honey”. Your attitude is more important than you realize!
- Many deals are specific to your client or agency. Thus, it is important to be discreet about your deals by not disclosing the terms of the deal outside of your client group or company.
Negotiating tip #4: Aim high, settle in the middle.
The first ask is usually not accommodated. Your point of contact will likely tell you that she needs to go ask her manager, and in most cases they’ll return an offer above (or below) your asking price. If you’ve bought a home you’re familiar with the bidding process—it applies to media rate negotiations and salary discussions too. Here’s how to settle at that landing point you had in mind:
- Always ask for lower (or higher in the case of salaries, for example) than you actually want. This allows leeway for the opposing side to come back with an offer that is closer to where you actually want to finalize. (For example, if the vendor’s proposed rate was a $12 CPM and you want to pay a $10 CPM, ask for an $8 CPM. Theoretically, the vendor will come back with that $10 CPM offer to meet you in the middle.)
- Give it time and be ready to wait for a response. Where possible, avoid last minute negotiations that will leave you rushed by planning ahead. For example, when you have multiple rates to negotiate, prioritize those that need to be contracted first.
Negotiating tip #5: Finalize the deal.
Despite what they may have done in the Mad Men era, never leave a deal to a verbal confirmation or hand shake. Here is what you need to keep in mind as you near settling the terms:
- Reference your checklist to make sure you’ve hit all the points you want to make and set the terms. You don’t want to leave anything on the table!
- Everything that is agreed to must be in writing. We suggest both email and then official documentation in the form of a final proposal and signed contract (i.e., insertion order, scope of work or offer letter)
- The results of your negotiations will set a benchmark for future negotiations. It will be the rate which you use moving ahead and will affect what other marketplace players are able to achieve as well.
For many negotiating brings on a bout of anxiety. However, once you recognize that you’re already carrying out negotiations throughout the course of your day, you can rest assured that you’re already a pro. Just remember that you want to leave the negotiation with the sense that both parties achieved their goals and that everyone played nice on the playground.
Have some of your own tips for steadying the negotiations seesaw? Tell us about them on social media.