Q & A Table of Contents
Price-focused Negotiation with Advertizing Clients
From: Advertising Salesperson Schenectady, New York
Question: When faced with a client during negotiation over price and the client simply states, "Will you accept this offer or not?" Yes, or no, is the only option you are given, there is no room for further discussion. My question is: Where do you go from there, other than out the door?
Response: A response to your question about negotiating price with a client should start with a step back rather than a decision to step out the door. In your prepation before the negotiation, you should look at all of the interests of the parties. If the client is known to be price-focused, you might want to ask 'why' s/he finds price crucial. Is it a measure of keeping score against you -- or other sales people? Is your client trying to prove something to his/her boss? Is the money coming out of the client's personal pocket or corporate pocket -- and in either case, have they been having a tough time with cash flow, creditors, folks who owe them money, meeting college tuition, etc?
You also have to look at your own situation. Is success measured by the number of units you sell, the total amount of money you bring in, maintaining a long-term relationship with the client? Are long pennies worth more than short dollars? If you 'cave' on price with this client, will it hurt your capacity to get other clients to pay the proper or full price?
What you want to do, before you cross the threshold going in, is figure out your BATNA, your Best Alternative To a Negotiated Agreement. Who needs whom more? If the client really stands to gain by buying your product and stands to lose if the deal doesn't go forward, how can you convince her/him
of that fact while still saving their face? Do you offer a trial deal: once at a knock-down price, then no discounts thereafter? If they take the discount, then go back on the deal, are you in a bad spot a) with them, b) with your boss, c) with other clients, d) with yourself. Can you go to an alternative client in the same business and say "We could have done business with Client X, but we've decided to offer you exclusivity."
In the advertising business, there are lots of elements to the deal. You need to know from your boss what kind of flexibility you have in terms of price, placement, proximity of the advertisement to attractive lead-ins, etc.
The bottom line is: Be Prepared. Plan for a price-focused client by figuring our which of his/her interests are represented by price: ego, profit, personal position within the company, cash in his/her pocket, etc. And having made these assumptions ahead of time, ask questions during the negotiation to find out how correct each assumption is. A negotiaton is an exchange of information -- but you only learn when you ask questions and listen carefully to the answers. You are investing your time in preparing for and participating in the negotiation. The more you use the information you derive in figuring out what to do next, the greater the likelihood you'll end up satisfied with the result.
If you are prepared, your client's 'my way or the highway' offer will not be a surprise. And you'll have a response ready that doesn't put you out on the street with nothing to show for it.
Good luck and good negotiating, Steve.
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