Most of us, including advertising agencies, do not know how to negotiate. This presentation provides a path to sucess.

1. Like Babes To The
Slaughter
Nashville, October 8, 2015
Peter Levitan

2. Let’s Start Here:
Ad Agency Exec, Think
You Are A Good
Negotiator?

3. “In 95% of the cases,
agencies are babes
being led to slaughter.
It’s generally a blood
bath.”

5. The
Fatigue &
Exhaustion
Scenario

6. One of dad’s old
negotiation stories…

7. It was the 1970’s…

8. 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

9. One Very Special
Way To Leverage
Fatigue &
Exhaustion

12. Ad Agencies
and
Slaughter

13. “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

14. 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

15. The Levitan*
Negotiation System.
*Preece, Finkle, Harvard, Trinity P3

16. 5 Starter Definitions
Win-Win
BATNA
Reservation Value
ZOPA
Under Value

17. 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

18. Be Respectful But Not Weak

19. 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

21. 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?

22. 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.

23. 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.”

24. This Is
Ridiculous!

25. 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?

26. The Key
Is…Preparatio
n

27. 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

29. 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

30. 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

31. 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

32. Negotiation Positioning Statement
You do strategic briefs for ad campaigns –
so do a Brief for the negotiation.
Who What
How Power

33. Negotiate In Person
Verbal – words, content – 7%
Vocal – tone, pitch, intonation – 38%
Visual – body language, gestures,
facial expression – 55%
Albert Mehrabian

34. Bring Two Agency People:
Lead Negotiator & Summarizer
Establish the CEO role
Establish the #2 role (Observer)
Establish “Good Cop – Bad Cop”

35. 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

36. Understand Your Assets
Knowledge & Skills
Category expertise
Programming & development
Purchasing power
Speed to market

37. Understand Your Assets
Management attention
Commitment & service
Reputation and / or Referral
Hey, didn’t their team picked you
Time is on your side

38. 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

40. “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.

41. 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

42. 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

43. Cases
Have relevant cases in your back pocket
Efficiency stories
Sales effectiveness stories
Creative stories
Development stories (!!!)

44. Sell Your Story
When Ads Work: New Proof That Advertising Triggers Sales
by John Philip Jones

45. 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.”

46. 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?)

47. Let’s Go:
The Opening

48. 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

49. 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

50. 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

51. NO! Is OK
This is not forbidden
It is expected
You must have rationale
Push back delivers respect
It helps them do their job

52. Compromise Is OK
Research indicates that:
Winners and Losers
express equal satisfaction

53. Be Respectful But Not Weak

54. Remember,
The Key
Is…Preparation

55. My Negotiation Sources:
Gerry Preece – External View Consulting
Marty Finkle – Scotwork
Darren Wooley – Trinity P3
“Negotiation Genius” - HBA

56. Thanks!
peter@peterlevitan.com

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