Negotiations Final Part. Don't be like the NBA or NFL

In the last 2 articles, we have visited two case studies of times that I have been able to use my negotiation training and experience to reach a desired results. Today I will mention the keys to negotiation with an ongoing vendor. For the past several years, I have used a vendor that accounts for a large portion of our business. Our company has a great relationship with this vendor and we renew our contract. With an ongoing relationship, the RELATIONSHIP is the key. Sure each party may feel external pressures from those higher up in the negotiations, but with a strong business relationship, each party will know that a desired result will eventually be reached.

1. Discuss new issues that may come up in the new contract throughout the year, not just when the contract is up. When constant contact is setup between parties, there will be a mutual desire to work on the deal continuously, rather than just during contract negotiations.
2. Invite ideas to grow relationship in the new deal. This could be new areas of opportunity or expertise provided by a vendor, or a part of the contract that may not have been negotiated before, but could provide a larger piece of the pie for both parties.
3. Have several areas that you are willing to concede and those that you will not move on. If you have mapped out your negotiation in your mind and on paper, then you will be able to provide instant solutions to potential hurdles without having to temporarily break negotiations.
4. Look for ways to close the deal prior to the ultimate deadline. If you drag out the negotiation and change your mind on previously agreed upon portions of the contract, then you may damage future relations.
5. Don't make it a competition. With a long term partnership you want the other party to succeed. Don't look for ways to lower your partner's portion of the pie, but rather look for ways to increase both sides of the pie. Do you best to not be like the NBA and NFL, keep your product rolling out to the consumers and don't damage relations of your consumer.

The way we perceive and act on things is based largely upon past experiences. Make sure to keep the experiences you have with a long term vendor mostly positive, so that when you need them your vendor will be willing to assist you with your needs.

Negotiations Part 2

Last post I went over some basic success I had in a recent negotiation. Today we will go over another case study to present some new ideas. Recently I have taken the task of Project Manager for the implementation of a SaaS service for my company. Over 7 weeks, I researched every possible option for this SaaS product that we wanted to implement. 

1. Research is key- I touched in this briefly last post. When you enter a negotiation you want to be the     expert on all things related to the negotiation. You should be able to quote stats, have data on competitors and the company you are negotiating with, and know additional pieces that you can dangle in front of the person you negotiate with. 

Through my research, I discovered that there are 3 great SaaS products that would fit the needs of my company. I proceeded to notify the salesmen of each of these different companies that I would be deciding between 3 companies, and I told him directly which companies they were and why we were considering them.

2. Friendly Competition - Think of this as the Ebay success principal. People inherently like to win and they especially don't like to lose when it is to their direct competitor. This is the case with all negotiations, if you have options then you will have the upper hand needed to help secure the best deal.

After initial negotiations there became a clear leader to be our SaaS provider, and I was ready to present this company as the future product for our needs, but that doesn't mean you can't negotiate a little further. This company had multiple points of interest for negotiation. The training fees, and the implementation fee seemed to be the easiest points to get a little better rate on. We were fine with the monthly fee and the term of the contract and so I preceded to work on the points of concern.

3. Lose to win - Good negotiators will start a further negotiation with a concession and a semi-guarantee of a future deal. For example, I said "We have narrowed down our choices to your company and ___, I am ready to present your company to our CEO as our solution if we can get a few things ironed out. I don't see a problem presenting the term of the contract and the monthly fee, but we will need to work further on these implementation fees." You have to pick your battle with negotiation. If you aren't willing to compromise on some areas then neither one will win. It is also key to show the light at the end of the tunnel for the negotiation.

After presenting concerns to salesperson, I presented some tier options that would fit within the price that I envisioned for the training and implementation fees. We came up with some ideas and I was able to reduce the implementation fees by 40%.

4. Work together - have some ideas ready to help come to an agreed conclusion. If you just say that you want X and expect them to reach it without providing any concession or feedback, then you will most likely not end up where you would like to be.

My negotiation ended with a 1 year contract term reduction, 35% reduction in monthly price and 50% reduction in implementation and training fees. I consider that a successful negotiation.

Part 3 of negotiation next post.

MBA Skill # 129 - Getting out of a Gym Membership with No Fee

Gyms are notorious for having some of the hardest contracts to get out of and the most persuasive salespeople. Even whole sitcom episodes have been aired based around not being able to "quit the gym". What does that have anything to do with negotiation, and how did I get my wife out of her gym pass 1.5 years early without penalty? This real world example is one of many in my NEGOTIATION STATION series that I will be going over in the next few weeks. This post will consist of some basic negotiation skills tied into my getting out of one of the hardest contracts in the world.

Keys to MBA Negotiation Skills

1. Explain your side of things in a strategic way. Look for ways to be vague and specific at the same time. In business terms, mention specific terms of a contract. Talk about the past and future relationship you have established with a company or vendor. 
1. GYM  EX: I focused on my future excitement about the gym, rather than my wife who has passion for other areas of exercise. 
2. Have answers to every question that may be asked. Do some research on the basic sales questions that the person you are dealing with may bring up. 
1. GYM EX: much like in business negotiations, the gym teaches its employees to focus on the benefits of the gym and use emotional ploys to keep its members. I was able to get through these by focusing again on my satisfaction and then the point of my wife exercising in different avenues then I do. 
3. Remove any assumptions before the person you are negotiating brings them up. This is part of the research portion of your negotiation. Make sure you write down a list of your assumptions in the negotiation and come up with solutions or answers to every assumption.
1. GYM EX: I took care of this in my first sentence with the gym customer service by stating my desire to keep my pass and possibly upgrade my pass in the future, while removing my wife's pass due to lack of use. 
4. Prime the person you are negotiating with long before the negotiation takes place. This will allow for the maximum possible bargaining chips for you to use later on. 
1. GYM EX: We were fine with keeping our contract at month to month after it was up for renewal last time, but of course the gym wants you to be locked in for several years. I renewed the contract, but made sure there was a cancel at any time w/o penalty clause, and I also negotiated a new 20% lower rate since we were giving them something by signing the 2 year contract (even though it had an exit clause).
5. Search to see if there are bigger pieces in the pie. This means find out if there are other places they might be willing to concede on in place of places they don't want to concede. 
1. GYM EX: much like with any other subscription based company, the gym wants to know they have people in contracts. Look for ways to sign this contract, but on your terms. That way they are happy that they have you in "their" contract and you are happy because you got a reduced rate or other benefit. 

These are the very basics of negotiation in my series of case studies that I have done over my years of experience in working with vendors, clients, and in my own personal negotiation. 

Targeting Consumers

How are you targeting consumers? Do you throw out a big net of display ads, direct mail, and other marketing tools or do you have a targeted marketing strategy? In my post on strategic mapping, I mentioned the need to create a targeted strategy in order to achieve sustainability. It is even more important to provided clear targeted Ads to your consumer. These ads can be served up online or offline as long as the right data is used. 

Online:

• PPC - If you use Google Website Optimizer or another A/B testing platform, you can serve up dynamic content based upon the user. This can help with serving up specific ads in specific areas as well as limiting your spending with only having. targeted pre-screened leads click through your ad. Data on when, where and which ads are being clicked on should be used in your targeting strategy. Ads may differ by area, so don't be afraid to run hundreds of different campaigns to target several different individuals. 
• Social Media - these platforms provide a great way to give targeted ads to each user. The personal information that these users provide, will help to serve up targeted campaigns based upon data from your previous users. These ads can help to sell product as well as increase brand awareness. 
• Display -  banners generally have a low click through rate, but if a banner is targeted, it can increase effectiveness greatly. 
• Other Channels - each business will have proprietary relationships and channels used to generate business. Use the data that you have to push hot campaigns and reduce cool campaigns. Also, use data to target individuals for specific promotions or programs you are offering. 

Offline:

      With the increase of marketing towards the online model, it is even more important to ensure      marketing is targeted when offered offline. A TV or Radio ad should be run on stations and times when your target audience is listening. Also, look for data to upsell potential clients who use products or services similar to yours. 

Implementing targeted marketing in all of my marketing that I run for my channel has increased revenue and overall user experience. Take some time to review the data and make sure each marketing piece that you serve up is targeted. 

Strategic Planning - Crucial for Sustainability

What are your goals in strategic planning? As a former founder of a growth company and current channel manager of a tech company, I can affirm that without a strategic map, a company will not be able to achieve its ultimate goals. The current company I am with is in growth mode and is continually improving its systems to help match demand for the service that we provide. We are looking at adding various SaaS products, adding employees with experience, and giving training to current employees. A strategic map should start with employees and might look something like this:

1. In "Good to Great" by Jim Collins, he says to make sure that you have "the right people on the bus". Whether you are a fortune 500 company with 10,000+ employees or a growth company with 50-, without the right employees in the right spots, it will be hard to achieve any goals that you have. A great talent acquisition staff will help to make sure you have the right people on the bus. 
2. Find the bottleneck. Whether its improving a process currently used or implementing new software, there are always bottlenecks within a company that can be improved. I was able to increase the sales funnel of the company I am with by 50% simply by implementing a testing platform for the landing pages that we currently run. Bottlenecks don't always need to be complex, sometimes they will be simple and easy to improve. 
3. Determine whether you should keep a department or system in house, or to outsource. For years we have used an archaic creation system for various digital media that we run. With the growth of our company it has become increasingly relavent that their is a need to use a SaaS product that will improve the scalability of what we run. This simple adoption of a new system to improve scalability will provide a needed boost to a digital media platform. 
4. Focus on the customer and/or shareholder - Implement plans on how you will focus on the most important part of every business. If you are public, it may be valuable to put someone in charge solely to acquire new shareholders. I am amazed at how many companies don't have a Shareholder Acquisition Model in place. Also, make sure that your sales/marketing departments have clear goals to acquire new customers and improve satisfaction of current ones. 
5. Clear vision and mission - These 2 items may seem corny to some, but having a clear vision and goals for a company as a whole, will save you a lot of headache with your employees. In some of my more entry level positions, it was amazing how many of my fellow co-workers would complain about not knowing where the company was headed or what the company goals are. This is bad for the company and for employees. According to a recent study, worker satisfaction is increase by 100% if they believe in the work that they are doing and have a true passion for the culture and vision that the company has set. 

These are a basis for success with a strategic map. It is important that the company as a whole has a strategic plan and that each department has its own plan. This will help with overall productivity of the company and satisfaction of its shareholders and customers. 

Business Development - Don't Miss Your Connecting Flight

Have you ever missed a connecting flight and had to wait hours for the next flight to go out? You end up wasting time and feeling frustrated at the airport surrounded by others who may be feeling the same things.

The same is true if you miss out on an opportunity to connect or form a relationship with someone you may run into in a business setting. Long standing relationships with vendors, clients, and friends in general are key to the future of your business career. The business connections that we make each day can help us days, weeks, years, or even decades from now.

In my senior year of my undergrad, I made it a point to sit by a different person each day in class. I learned about these people, their likes, dislikes, goals, and love or hate for the class we were in. This proved to be a valuable asset to myself when I decided to run student government to represent the students of the business school. Instead of asking random strangers for votes, I was asking friends to help me get into office. I was able to win the election decidedly against the competition.

The connections I have made in my undergrad, graduates school, and business settings have helped me to have the power to go to my friends for advice on a specific strategy I am working on, vendor choices to make, career advice, or any other thing that you may need from your friends. The same is true for yourself helping your friends to develop their businesses when called upon. The service and ideas you provide to your connections will improve your relationship with them and also improve your development as a leader.

The key to business development is connections. Make sure to not miss your flight and to keep your connections growing.

Digital Marketing Campaign Management

When advertising a brand, generating leads, introducing a new product, it is obvious that online marketing is becoming the key player to invest money in. Recent statistics showed that digital marketing now accounts for over 25% of all ad spending by companies. With the continual shift towards digital and social media. Here are a few advertising channels that should be used based upon the things that I have learned through developing strategy at my company and while consulting.

1. Pay Per Click Advertising - there is an entire marketplace of strategy and implementation that needs to take place in the PPC world. If you are working for a large company introducing a new product, or a small business just starting out, PPC allows you to setup small campaigns and bid on keywords based upon the desired and established target market. Campaigns should be targeted by keyword and by location to maximize the impressions on a given search. KPI's to look for on success would be ROI, Click Through Rate, and Cost Per Click.

2. Social Media - Twitter, Facebook, LinkedIn, YouTube are all great ways to engage customers and get panel data without having to bring in a focus group. You can create simple ways to engage a consumer, while getting data on what they like to do, who they interact with, and how they use/purchase your product.

EX: Mtn Dew Labs - created as a way for devoted Dew drinkers to log in to a community and "have a part" in the production of future Dew flavors. Under the surface, it is a way to get the most brand loyal customers to have ownership in the brand. They will become the marketers themselves if they are invested into such an idea as Mtn. Dew Labs.

               
 If you can find unique ways to engage consumers or businesses, they will become marketers for you and provide immense brand awareness of your company and product.

3. Blog - another great way to engage a targeted group of your consumers and to provided continued value of content. A blog can be an easy way for a consumer to engage or an easy way for a company to provide tips on its product or industry.

Ex. Disney was recently listed by Mashable as a company with one of the top 15 corporate blogs (http://mashable.com/2010/08/13/great-corporate-blogs/). They use there blog to keep the Disney experience going while you are at home, with behind the scenes looks into various areas of the entertainment that they provide. Definitely a great way to engage the consumer.

4. Metrics - Once you have your digital marketing in place, it is key to have tools to analyze your ROI. Google Analytics and Adwords are both great simply tools that can be used to see Unique visitors to your site, peak time for visits, what keywords are performing, and things of that nature. Make sure to choose KPI's that fit with your companies definition of success  and continually track those. 

What are some other thoughts that you guys have about Digital Marketing and Strategy?