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Negotiating sponsorship from a weak position
By Kim Harrison,
Consultant, Author and Principal of www.cuttingedgepr.com
Negotiation with potential major sponsors tends to be a one-sided process. The sponsor invariably holds the upper hand because they know there are dozens of other sponsorship opportunities being offered in the marketplace at any given time. Therefore some sponsor negotiators ruthlessly use their bargaining power to force a stronger position. You can follow these guidelines to help overcome a weak negotiating position:
Don’t reveal the full extent of your weak position. It is a common, costly mistake to let slip the fact that you are desperate to complete the deal. Don’t give them the impression you are desperate because you have called them three times to check if they have received the proposal! Try not to let the potential sponsor know the full truth of your situation. A weak position is not so dire if the other party doesn’t know your real position. Don’t let them know you are under pressure to sign the deal or that the deal is vital to you. Don’t get drawn into any discussion that allows the potential sponsor to infer that you are desperate. Instead, continue highlighting your strengths, even if they are few, or turning the focus to the advantages they will gain from a deal with you.
Don’t let them intimidate you by trying to beat you down on price or conditions. If you have done your homework and know your proposal offers good value for money that stands up with other deals in the marketplace, point to the other similar deals and stand firm. If they want a lower price, tell them you can oblige, but only for a correspondingly lower combination of sponsor benefits.
Increase the other side’s dependence on you. When in a weak position, too many negotiators focus exclusively on themselves and fail to consider the other party’s position. Most negotiators have something valuable to offer the other side. The important thing is to identify the unique value you bring to the negotiating table. Try to understand all the potential sponsor’s needs, interests and priorities by communicating with them at multiple stages and through multiple people during the lead-in process. If your negotiations are proceeding to a crucial point, you are well advised to meet with or at least to telephone people from different business units within the sponsor company to get access to their point of view. Their comments may help you gain crucial insights that you didn’t have before and allow you to offer new benefits rather than being caught on the back foot and feeling obliged to lower your asking fee due to the other party’s tough line. This is especially helpful if you are seeking to renew an existing sponsorship deal. However, be politically savvy about this. Some sponsors may feel you have gone behind their back, so be careful about how you discuss the sources of such information.
Don’t promise a major sponsor everything up front. Keep some benefits in reserve to ‘sweeten the pot’ if the potential sponsor is pressing for a better deal. This is far better than reducing the amount of money you are asking. You could keep these extra benefits in hand as an unexpected bonus for the sponsor after the deal is signed. Also, some reserve benefits could be spread to other sponsors if the benefits haven’t been used in the deal with the major sponsor.
Collaborate with other sponsors to put a proposal together to a potential major sponsor. If you already have smaller, happy sponsors in place, you could increase your negotiating power by teaming up with them to offer a greater number of joint benefits to the main sponsor. The new benefits could, for instance, provide access to a bigger target audience in a wider area or in a juicy niche market that otherwise would be difficult to access.
Use psychology. You can use two psychological principles to help your cause. Firstly, get the sponsor to like you. Two things reliably increase liking – similarity and praise. People are more willing to buy from those who are similar to them in various ways such as age, sport, politics and who have other areas of personal common ground such as interest in a hobby, sport or television program. Create the bond early because it paves the way for goodwill and trust in every later encounter.
Secondly, we mostly prefer to say yes to the requests of someone we know and like. Praise charms and disarms. Positive remarks about another person’s attitude or achievements reliably increase liking in return, as well as greater compliance with your wishes. This works even when flattery is used. Strangers such as sales people get us to comply with their requests as well by applying this rule – they first get us to like them. Apply these simple applications of psychology in your discussions with sponsors – without being too obvious about it.
Obtain testimonials from past or present genuinely satisfied sponsors to support your case. Make the testimonials specific – get the person to talk about what they thought of you before and after the sponsorship relationship with them. And get them to quantify if possible, any benefits – expected and unexpected – they received from the relationship. Put all this in your sponsorship proposal. Ensure you include the photo and contact details of the person giving the testimonial – either phone or email. This gives a quantum leap to your credibility, and most of the time the potential sponsor won’t interrupt the other party by contacting them.
About the Author
Kim Harrison is a recognized authority in the public relations field. His website, www.cuttingedgepr.com, provides a wealth of informative articles and resources on public relations techniques and management.
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