Negotiations: a client’s lens
Five observations on agency readiness for negotiations and how to achieve better outcomes.
In preparing these thoughts on negotiation skills, I have been struck by a number of things. Some are experiences I encountered as a client, and as an advisor helping other clients with their agency rosters. Some are observations of agency behaviours, while negotiating with them or supporting them in their own negotiations with their clients.
So, I offer this ‘Top 5 observations‘ list as a client’s lens of agency readiness for negotiations.
Perhaps some of these tendencies and actions might resonate with you, to help you achieve better outcomes on your negotiations. (I will explore some of these dynamics further during a DBA workshop in November, details of which are below.)
Observation 1: Agency positioning as a foundation for negotiations… or not
For clients, a brand is the powerful and valuable foundation which helps consumers know what to expect. The proposition… tone of voice… what the brand stands for. So, why is it that many design agencies choose not to invest in this valuable asset themselves, instead choosing to look and sound like most other agencies?
When brands look and sound the same – indiscernible from each other – then price becomes the primary differentiator. This is also true of agencies as well.
If you look and sound like most other agencies, you will be perceived as interchangeable. An easily replaceable commodity. And it was not procurement who commoditised you or your services. So, please invest in your brand. Do the work. Stand for something meaningful and relevant. Use your authentic, unique, and relevant positioning and proposition as your base of power and confidence in your client relationships and in your negotiations. Your strength to defend and enhance your value.
Observation 2: Agencies struggle to have business conversations
In my 25+ years in the marketing service space, both at Procter & Gamble and in my own consulting practice, I have seen that most agencies struggle to have business conversations with their prospects and clients. Instead, talking about their magical creative processes, creativity, their “one-stop, full-service” offerings, and the long list of creative outputs they claim to deliver. Not business operations. Not business results influenced by their work.
Clients want to have confidence in the likelihood of a business return on their investments. This is as true of manufacturing investments, as it is investments in design, or innovation or marketing or in-store activation.
Learn how to talk about business – the client’s business, and your ability to create positive impact and business outcomes. You should also deeply understand your own business operations – client impact, operations and productivity, drivers of cost and value, what circumstances help you run a better business. You do not need to acquiesce to client demands for your cost drivers, but you should know them.
Observation 3: Not enough focus is put on preparation and practice
You need to know that clients – especially those who utilise procurement resources to negotiate value, terms, and conditions – are doing their homework ahead of their negotiations with you. They are setting goals and objectives for their negotiations. They are collecting information and making assumptions about your business, your needs, your motivations, and your possible concerns. They are mapping these things to talking points and tactics. They are building negotiation plans. They are creating scenarios. Importantly, they are practicing, role-playing, and aligning on their approach(es).
Are you? What do you typically do to prepare for your negotiations?
I have seen a void of any meaningful preparation in almost every client/agency relationship I have had the opportunity to serve, whether supporting the client or the agency.
Please consider spending some time preparing for your negotiations. What do want from these “value discussions”? What do you think the client wants? What are they worried about? How do you plan to retain (and regain) your value? Left to chance, you have little chance.
Observation 4: “The Negotiation” is not one event
Closely related to Observation 3, above (Preparation & Practice), most agencies think of their client negotiations as a singular “event” (which could extend for several days or weeks). And they also believe that once completed, they no longer need to worry about negotiating, until next year or the next “event”.
However, if you only look to “the event” and focus on the transactional elements of your relationships, you miss the opportunity to plant seeds, send messages, reinforce your amazing work throughout the year – in every conversation with your clients. Clients are most certainly doing this with you. The occasional nudge about pricing that might be too high, or “that time” you might have missed the mark on one of their initiatives. Most of these “seeds” from your clients are not intentional attempts to deceive or mislead you, or to say untrue things. But they can be an attempt to shake your confidence or to cast small shadows of doubt that might be referenced at some point in the negotiation process in the future.
Remember that negotiations are a perpetual, year-round activity, not a singular “event”. Do your part to remind your clients about the brilliant work (and results) you have delivered with/for them. Seek out frequent feedback from them throughout your entire relationship, not just the most recent experiences. Lead and own the narrative for your relationship. Meet with your client – often – on the basis of your relationship, not on the basis of the deadlines, deliverables, milestones, or projects.
Observation 5: You always have more power than you perceive
Agencies have little or no power in their relationships with clients. This is completely false. I see clients assume the position of power. I have also seen agencies simply acquiesce or fold, presuming they have no power. It is frustrating to watch this long-held dynamic in client/agency relationships.
Agencies… you always have more power that you perceive. You need to discover your sources of power and use them for good – your good. These might be special talents, capabilities, or a substantial expertise that your client deeply needs and values (note Observation 1). This might be your profound knowledge of your clients’ businesses, and how best to serve them (note Observation 2). You might have become an indispensable and trusted ally for your client(s)… the people, not the companies. You might have practiced saying “no” and walking away from relationships or business circumstances that do not help you operate a viable business. Find your foundation of power. Do not be afraid of stepping into this uncomfortable space, if by doing so it better helps you serve your clients, and better serve your own business too.
In summary, none of these “Top 5” observations are, themselves, obvious negotiation skills or tactics. However, in my experience, they are an important foundation on which you might build the skills you need to continue to run a successful agency business, enhance your confidence, and will most certainly increase your likelihood of greater success in your own negotiations and client relationships.
They help you create A Better View of your own business, your clients’ business(es), and how you both might influence and enhance value for each other.
Charles Deluvio | Unsplash
Paul Skorupskas | Unsplash