Friday 11th April 2008
Powers of persuasion
Good negotiating skills are hugely important in many walks of life, writes Chris Ingram. It’s not just buying and selling in business; it’s getting a raise, arranging a date, or communicating with your children from the moment they turn two.
It is surprising, therefore, how erratic negotiating standards are among business people. Very little training is given and I, for one, had to learn the hard way.
The first was when I had talked myself into a senior position at an ad agency although I was only 19 years old. It was the mid-60s and TV was the new, all-powerful medium which caused products to fly off the supermarket shelves. My (much older) boss was not interested in TV, preferring magazines for her clients’ advertising and leaving me to get on with ‘grubby’ television.
On one occasion we were booking a national TV campaign for a major food company far too late – London, in particular, was where we couldn’t get the airtime. I was on the phone pleading for the spots and never got a full campaign for the client. Determined never to go through this experience again, the following year I booked up the whole campaign on all stations in advance. I felt rather pleased with myself and having put the campaign to bed so easily, I had some time on my hands.
Then the phone started ringing – all the small stations and many medium-sized ones began offering discounted spots to persuade me to spend more with them. I was quite frustrated: ‘But I booked the campaign three months ago – you know I did!’ They thought I was playing hard to get and kept improving their discounts to tempt me to spend, but to no avail. I had held back nothing in reserve.
Even then the penny only dropped when I moved to a larger agency. I had a planning job with no buying involvement but saw a group of guys next door having what seemed to be a huge amount of fun. To my amazement, they turned out to be time buyers. I could not believe a clerical job like time buying could be fun. I asked to be transferred to this department and it quickly dawned on me that I had cost my client at the previous agency a fortune by not knowing how to play the market.
I realised many things from that experience: the importance of researching a market as thoroughly as possible before attempting to negotiate; that markets can have hard and soft sectors within them; the effect of seasonality; and the implications of playing a market short term or long term.
I began to think that I was now pretty smart and moved to another agency to make my mark. I found that an easy way to get a good deal was to play one salesman off against another and bluff like mad about my intentions and budget. But I became careless and failed to think through the implications of the fact that two magazine salesmen, who I had encouraged to compete in a cut-throat way for my budget, were actually from the same publishing group.
One day they compared notes and confronted me. The humiliation was huge – they’d called my bluff and I had no alternative but to use them at the full price. It was a case of the biter bit! From that day on I’ve never bluffed without being able to follow through – and I always have a plan B in reserve.
This forced me to negotiate differently: unusually for a buyer, my negotiating technique became one of persuasion. I was giving them reasons why they should say yes to terms that were unwelcomingly low. It meant I had to research and prepare much more thoroughly. Obviously, you should not even attempt to negotiate unless you know the market and how it works.
This means not only understanding the seasonal, regional and sectoral differences, but also the opposing company, its culture and how it is performing. Even more important is to try to get to know as quickly as possible what makes them tick. Before you start to negotiate, see your proposal from their perspective. Do not see them as ‘opponents’; ideally you are going to help them. Can you make them a bit of a star inside their company? What can you concede that will look significant but is hardly going to affect you?
This all took much more time but it meant I went into every negotiation knowing that no-one would be better prepared than me and I was going to make it very difficult for them to say no.
Chris Ingram has considerable experience of building and managing rapid-growth companies and is widely regarded as the inventor of the modern media agency. He started CIA in 1976 with 3 people and £10,000. It grew into Tempus Group and was sold to WPP for over £430 million in 2001. In 2002 he launched Genesis Investments, a private equity business, and, in July 2003, The Ingram Partnership, a strategic brand building and communications consultancy.
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