An insight by Michael MacRitchie
For the last 10 years, MGI have honed negotiating skills in the high stakes, big ego arena of celebrity endorsement, performances, influencer campaigns and sponsorships. Negotiating countless contracts and endorsement deals taught me a powerful lesson: effective negotiation is just a conversation, a relationship built over time.
My experiences negotiating on behalf of brands and organisations are why I want to share these essential 5 tips.
- Set the scene. Negotiating success begins by acquiring knowledge. Collect as much data about what is at stake and the person or organisation that controls what you want. The data you collect allows you to navigate the natural ebbs and flows inside of a negotiation. The data should include the quantitative (the market and your competitors) AND the qualitative, which I refer to as 360-degree awareness. What are the fears and desires of the other side? The stakes? The possible outcomes? It’s important to be clear on your target price (what you’re hoping for) and your reservation price or terms (your walkaway price). The more you know going into a negotiation, the more you can establish authority and respect.
- Find common ground. Negotiation doesn’t have to be adversarial. Trust is at the heart of long-term success as a negotiator so it’s important to take time to build a relationship with the other party. Even small gestures — like sharing a little piece of personal information — change the dynamic of a negotiation by signaling your openness and desire for connection. In fact, studies have shown that revealing some information, even unrelated to the negotiation, increases the outcome by setting the positive tone conducive to gaining agreement. Counter disconnects with curiosity instead of defensiveness. In a world that views negotiation as a battle, that subtle shift can be powerful. The key to negotiating is managing relationships well so that conversations stay open and spark more conversations. Keeping the tone light will prevent the negotiations from becoming too tense. Injecting a smile or some humor into the conversation can ingratiate you with your opponent while simultaneously conveying your bargaining strength. Finding common ground means knowing common ground exists. The seeds of your next negotiation are planted in the one you are doing right now.
- Ask with confidence. Overcome fear of negotiating by anchoring your ask against your “why”. What is driving your ask? For example, if you are asking for a raise — in what tangible ways will that raise impact your life and the lives of those around you? Knowing your why will allow you to tap into your motivation when negotiation gets messy and uncertain. And, if you have set the stage and found common ground, the ask should be expected. Talk as much as you need to, but no more. The more concise you can make your ask, the more confident you will be. Futhermore, professors and negotiating experts Adam Grant and Adam Galinsky both agree that research concludes that people who make the first clear offer get better terms that are closer to their target price. The explanation being the psychological principle of anchoring – whatever the first number on the table is, the negotiating parties begin to work around the stage it sets.
- Embrace the pause. More often than not, no matter how well the negotiations are going, there will be a point when you reach some sort of stalemate. You might be just short of a breakthrough but the sides haven’t been able to reach mutually agreeable deal points. Now is the time to embrace the pause. Embracing the pause may look like doing nothing, but in reality it is one of the most effective negotiating strategies. The pause sends a powerful message, projecting confidence in your position. The temporary suspension of proceedings will convey that you’re not desperate to close the deal and suggests you might have other options to consider. It can also serve to create anticipation and possibilities, which are key to negotiating the best deal and has the potential to put pressure on the other party. A pause also enables you to re-gain perspective by pulling back out of the emotion and intensity of a negotiation. Pausing allows you to listen, and when you listen, you learn.
- Know when to leave. While you work your way toward a deal, simultaneously create choices so that leaving is an option. Having a willingness to walk away can often display the strength of your stance and lead to the best possible outcome in an offer. Recognize the red flags that signal your exit from the deal. Going forward is not always a risk worth taking. That can be discouraging when you have invested time and energy into getting a deal done, but remember that a deal isn’t necessarily better than no deal. A successful negotiation will end with a result that is better than your best alternative.
These five tools are part of every negotiation. Hone them until they become instinctive and you have the confidence to use them well. You’ll find you are able to shift uncomfortable negotiations into productive conversations.
Whether you are haggling over your cable subscription or a multi-million-dollar contract, you are engaged in a critical conversation.
The more comfortable you are with the conversation, the better off you will be with the results. Remember, you only get out of a negotiation what you have the courage to ask for.
Michael MacRitchie, BA, Media, Hons, is Managing Partner at MGI Entertainment. Michael has over 15 years of experience in negotiation from London Olympic Bid, European Football Cup, Concerts with artists: Linkin Park, Avril Lavigne, Celine Dion, Sarah Brightman, Jon Legend, Maroon 5, Beyonce, Christina Aguilera, and sporting events: Oakley Air & Style & USA Basketball pre-Olympic games team. In recent years MGI has negotiated contracts with Andy Lau, Brad Pitt, Jessica Alba, Kobe Bryant, Sunny Wang, Godfrey Gao, Will.I.AM, Li Bingbing, Sophie Turner and many others.