No doubt you read recently that the TV networks are cutting upfront rates in response to a very soft advertising environment. The exception is CBS. It is holding firm because, according to The Wall Street Journal, it had a strong 2000-2001 performance and has a solid fall program schedule. CBS is betting that it will more than make up the short-term loss in the future with what is called scatter-market ad dollars, which is the week-to-week sale of advertising time. Bottom line, it is going for price, not volume.
The jury is out on what will happen, but you have to admire CBS's stance. Soft markets generate buyer negotiating ploys and pressures as sure as swamps in muggy weather produce annoying, biting mosquitoes. It ain't easy to stand and hold your ground.
Here are 10 tips to help you be stronger in the negotiating process:
1. Believe. You, yourself, must believe in the value of what
you are selling to advertisers. If you think your rates are expensive,
you will never be able to negotiate from strength. If you see your site
or service as a cost rather than as a valuable market to be reached, or
a solution to a problem with rewards worth many times over the dollar
charge, then you will be at a psychological disadvantage and a good
candidate for caving in. Sit down, and list all the reasons your site
or service is of value to your advertiser.
2. List your strengths. If No. 1 gets you to list your general
values, this exercise zeroes in on the advantages your site or service
offers specific to this advertiser. For example, creative assistance,
knowledge of the buyer's business, previous track record, prior
relationships, flexibility in timing, and so on.
3. Have a plan. You wouldn't take a trip without doing some
research and knowing where you are going, so why would you enter into a
negotiation without some idea of where you want it to go and how you
intend to get there? List your interests; your buyer's interests,
personality and pressures; the business facts; different plans you can
offer; "chips" you can trade to make the deal work; your bottom line;
your back-up plan. Determine the tone you want for the meeting. Plan
your opening remarks. Anticipate pressure tactics.
4. Bring the other side into the process. Negotiating involves
two sides. Don't put the entire burden for a solution on yourself. Set
the tone of collaboration right away: "Let's review the issues, what we
both want, and work this out together. OK?"
5. Separate interests from demands. A demand is not an
interest. You can often satisfy interests when you cannot satisfy a
demand. So many negotiations fail because the salesperson doesn't ask,
"Why?" For example, your buyer might demand: "I want reports weekly."
You should ask, "Why is that important to you?" The interest might be,
"I'm afraid I'll lose control of my ad effectiveness." Although
specific demands often cannot be satisfied, the other side's interests
-- once they are known -- usually can, in other ways.
6. Give a clear message about early price demands. If you
followed tips 1 and 2, then you know your bottom line, so it becomes
much easier to give a clear response to price pressures. There are many
ways to respond. Here is one: "If you expect us to be the low-price
bidder, then we must shake hands and part company as friends right now.
However, if you want value for your money, then let's talk, because, as
you know, our clients have seen as much as a 25 percent increase in
response rate with our services. What else is important to you?"
7. Always trade. If you're going to give something, get
something. The other side: "I want customized specs X." You: "If you
can give us flexibility on delivery, I can guarantee you the customized
specs you want." Or, "If we can get you specs X, what will you do for
us?"
8. Move slowly. Think. Pause. Take time to calculate. Make
a phone call. Ask a question about something said earlier. If
necessary, suggest a break to check things out, and return another day.
Rushing leads to bad decisions.
9. Be clear. There has got to be a consistency between what
you are saying and the way that you say it. Just think of a little
child fiercely denying he broke the toy (or vase, or whatever), looking
down at the floor and turning his body away from you. You know he's
lying through his (cute little) teeth! The same is true in negotiating.
If your buyer says, "Is that the best you can do?" and you respond
(weakly), "I think so. This is very good value that you're getting. And
we don't usually do better than the terms you have. I mean, I'd like to
help, but, uh, that would be difficult," you're toast. One much better
response is simply to say (with total strength), "Yes."
10. Turn coal into diamonds. Pressure tactics don't have to
kill your negotiation or cause you to give away the store. You can
explain the value of your offer and hold your ground. You can trade.
You can deflect with sarcasm or humor. You can create your own pressure
by playing up an advantage of yours (e.g., limited supply). All four
responses let the other side know that you see through their tactics
and that you intend to see this negotiation through with them. Again,
this is easier to do when you've anticipated what pressures you might
get in your discussion. (See No. 3.)
We should be used to negotiating. We do it all the time. We do it as
children: "Mommy, I'll clean up my room right now if you let me watch
television tonight." We do it with significant others: "Let's go to the
beach this weekend, and next weekend we can go hiking." But we freeze
when we have to negotiate in business. Admittedly, times are tough, but
with a little planning, an understanding of the negotiating process,
and practice, you, too, can become a strong negotiator for your
company.
Good luck!
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