Peter Levitan - How To Negotiate

Like Babes To The

Slaughter

Nashville, October 8, 2015

Peter Levitan

Let’s Start Here:

Ad Agency Exec, Think

You Are A Good

Negotiator?

“In 95% of the cases,

agencies are babes

being led to slaughter.

It’s generally a blood

bath.”

The

Fatigue &

Exhaustion

Scenario

One of dad’s old

negotiation stories…

It was the 1970’s…

The Scenario

The Goal: Buy two apartment buildings

The Players: Dad and his lawyers

Older, very experienced owner

The Scene: Mid-town conference room

Time: After 7PM

One Very Special

Way To Leverage

Fatigue &

Exhaustion

Ad Agencies

and

Slaughter

“Terrible. Naive. Wishful. They get

creamed. They are up against

professional negotiators, and they

often put their unskilled (in negotiations),

nicest, most accommodating people

against Procurement. It’s generally a

blood bath.”

Gerry Preece, Owner, Preece Consulting

Why Agencies Get Slaughtered

Little to no negotiation training

No pre-meeting preparation & nice

Going in assumption: “We are so weak.”

The fear of losing – especially after incurring

the cost of pitching

The Levitan*

Negotiation System.

*Preece, Finkle, Harvard, Trinity P3

5 Starter Definitions

Win-Win

BATNA

Reservation Value

ZOPA

Under Value

WIN-WIN

Everyone wins. Not.

"I'll be so considerate of your convictions and desires that I won't have the courage to express and actualize my own."

Stephen Covey

Be Respectful But Not Weak

BATNA: Best Alternative To

Negotiated Agreement

What happens if I don’t get what I want?

Fire staff – close the agency – move on

– go pitch Client “B”…

What is their BATNA?

start all over with Agency “B” - Lose face

– get less service & expertise

Reservation Value

Calculate your walk away point.

What is the lowest offer you’d take?

How badly do you want this client?

What did it cost to get in the room?

Cost to run the account?

Cost to not have it?

Zone Of Possible Agreement

ZOPA is the set of all possible deals

that would be acceptable to both parties.

Know their Reservation Value.

Well, have an an educated guess.

Under Value Your Services

A major agency issue.

“Our margins have been crushed.”

“All agencies are interchangeable… our

competitors can do a similar job.”

“We will probably have to cave.”

This Is

Ridiculous!

You got this far, right?

You’ve positioned your agency well, right?

You started to seed your superior value on

your website, in the RFP and at the pitch.

You do deliver high value, right?

The Key

Is…Preparatio

n

Know Why You Want Them

A high profit client

A high profile client

A client that wants great work

Decent human beings

And What You Want

Start Preparing Early

Know who will be in the room

Know what they want from you

Know their agency comp plan (!!!)

Know their BATNA’s and Reservation

Values

Understand Their Wants

Make a “good” deal

Look good to their organization

Feel competent and respected

They pushed you to your limit

Not boxed in – want choices

Understand Their Wants

Good rationale

Add to his / her knowledge

Face-saving ways out of any problem

Be liked - considered “tough but fair”

Get it over with – avoid risk

Negotiation Positioning Statement

You do strategic briefs for ad campaigns –

so do a Brief for the negotiation.

Who What

How Power

Negotiate In Person

Verbal – words, content – 7%

Vocal – tone, pitch, intonation – 38%

Visual – body language, gestures,

facial expression – 55%

Albert Mehrabian

Bring Two Agency People:

Lead Negotiator & Summarizer

Establish the CEO role

Establish the #2 role (Observer)

Establish “Good Cop – Bad Cop”

Review Any Weaknesses

OK, you just might be in a ‘weak’ position

They think they hold the cards

They are this deal’s decision maker

There is always Agency B and C and D

Understand Your Assets

Knowledge & Skills

Category expertise

Programming & development

Purchasing power

Speed to market

Understand Your Assets

Management attention

Commitment & service

Reputation and / or Referral

Hey, didn’t their team picked you

Time is on your side

Are You Are Already A Corporate

Client?

Senior relationships

Marketing organization relationships

Reputation amongst peer companies

Ability to walk away / fire the client

Make “me” look good

“Damn You Guys Are Expensive”

Not true.

We sweat the cost details….

Here’s some proof…

You seeded the cost control idea early.

It’s part of your agency credentials.

Just Like Ms. Client,

We Are Slavish To Cost Control

We benchmark 100% of our salaried and

hourly positions every year plus our

overhead and margins

We renegotiated office space costs –

down 10%

We renegotiated healthcare costs –

5% under market

We Are Slavish To

Cost Control

We hire buying professionals for all third

party buys, they use rigorous six-sigma

processes

We have examples of client cost savings

We use Six Sigma

Cases

Have relevant cases in your back pocket

Efficiency stories

Sales effectiveness stories

Creative stories

Development stories (!!!)

Sell Your Story

When Ads Work: New Proof That Advertising Triggers Salesby John Philip Jones

Beware The Negotiator “%” Game

“I must have 20% less!”

But, they’ll actually take 5% or 8%

or 10% less…

“I just need to go back to the team with a

pricing story to look like a good negotiator.”

To Get Past Pricing, Add ‘Benefits’

Faster delivery dates

Contract length

Exclusivity

Custom programming & remember,

digital is a pain in the ass.

Future work (a concession?)

Let’s Go:

The Opening

The Opening

Manage expectations before the meeting

You know their compensation system

Get them to go first (maybe!)

Go if you feel “influential”

Push on their opening – make no concessions

The Opening

Make big (and defensible) early demands

Set an “anchor” early – be prepared to justify

Example: blended rates

Use “givens” and beware of theirs

Example: our accounting policies

Concessions

Small concessions (conditional concessions)

Make them work for it (it increases the value)

Add value to it by giving it to them and then

acting like you want it back (Endowment Effect)

Go slowly

Ask for or give freebies

NO! Is OK

This is not forbidden

It is expected

You must have rationale

Push back delivers respect

It helps them do their job

Compromise Is OK

Research indicates that:

Winners and Losers

express equal satisfaction

Be Respectful But Not Weak

Remember,

The Key

Is…Preparation

My Negotiation Sources:

Gerry Preece – External View Consulting

Marty Finkle – Scotwork

Darren Wooley – Trinity P3

“Negotiation Genius” - HBA

Thanks!

peter@peterlevitan.com

This presentation is based on my book on pitching. It is available on Amazon. Buy it and win more pitches.