I recently decided to hire a publicist to help with the publicity for my first book. While my publisher assigned its own publicist, my agent recommended that I also hire a publicist to augment its efforts.
Since almost every businessperson has undertaken negotiations with vendors or service providers, let’s examine how to most effectively negotiate in this context.
The framework for this analysis follows a hopefully familiar pattern for readers of this column: my Five Golden Rules.
1. Information is power—so get it. The first step in any negotiation is to gather sufficient information to set your goals. In negotiating with vendors, you often will have at least two primary goals: quality and price.
And if the deal will involve ongoing contact between the parties, like between a client and its business lawyer, also ensure sufficient rapport exists to establish a good professional relationship.
In my publicist negotiation, my goals included: increasing prominent media exposure for my book (if a publicist could help get me on Oprah, my book would be well on its way); establishing rapport and a professional connection; and getting the most bang for my buck.
Knowing my goals, I then closely analyzed my needs and interests. Next, I asked my agent and other industry experts for recommendations.
I received three. To the extent possible, actively solicit deals from at least three vendors or service providers. On large deals, you might want more. At a minimum, get two. This is especially critical for first-time deals.
One reason you want two or more vendors is it increases your ability to fully explore your options. I learned valuable—and different—information in each of my conversations with the three publicists.
Your next step after receiving some recommendations? Find out everything you can about each vendor and how they can satisfy your interests—on your own and in conversations with them.
2. Maximize your leverage. In addition to gathering information, also be sure to share sufficient information to pique their interest in working with you.
The first element of leverage relates to how much you need the deal relative to their need. The more they want your business, the stronger your leverage. Vice versa, too.
The second element of leverage involves your Best Alternative To a Negotiated Agreement with them (your BATNA), relative to their best alternative to a deal with you.
This is another reason to explore a deal with more than one vendor. If you only have one, you severely limit your alternatives and weaken your leverage.
To maximize your leverage, also indicate that you’re interested in them, but are also exploring other vendors and alternatives. But don’t do this in an adversarial way.
3. Employ “fair” objective criteria. One way to evaluate the quality and reasonableness of vendors involves closely examining the objective criteria and standards applicable in that industry.
Research the vendors’ reputations, both on quality, price and trustworthiness. Discover the market value for their products or services and what they’ve previously charged others.
And get several references and ask probing questions, such as “what are ABC’s strengths and weaknesses.” Don’t just find out they’re “great.”
4. Design an offer-concession strategy. Most vendors or service providers are used to making the first offer in a proposal. Solicit this. And while industries have different traditions regarding what to include in a proposal, at the least ask for a detailed written proposal, including the value they add, prices, distinguishing characteristics from their competition (your alternatives), and recent references.
Then make sure you’re comparing apples to apples. The publicity proposals I received varied in form and content. One included its full services for a monthly fee. The others charged different amounts for each service. One even included performance incentives based on the media generated.
After comparatively evaluating the proposals, narrow it down to the two best. Then ask each to “sharpen their pencils” and revise their proposals appropriately. Tell each you’re very interested, but have two good choices.
And if they ask for your “bottom line,” wait to answer until the end, if then. Ideally, you will not counter until your final acceptance.
5. Control the agenda. You’re often in the driver’s seat in negotiating with vendors and service providers, especially if you have good alternatives and they want your business.
So take control by soliciting proposals and managing the timing and deadlines to your advantage. (For more on timing and deadlines, see my previous column on this at www.negotiationInstitute.com).
Since my book has a May publication date, I have a short deadline within which to hire a publicist. I shared this with each publicist, giving each an additional incentive to start with a very attractive proposal.
I’m now evaluating these proposals and implementing the above steps. Interestingly, they are too. After all, it made sense to provide each with my book so they could develop an effective proposal.
My book, of course, is about negotiation. That’s what we’re doing now.
Published February 6, 2004 The Business Journal