Business Development

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Negotiating Your Way to a Win-Win Situation

31 Aug, 2011

By: Aaron Del Mar

 

Sara Sangalli - Dreamstime.com

Negotiating with a facility vendor is probably going to be one the most important parts of any successful event, and at times can be the trickiest. As in most personal relationships, the road is a two-way street and both sides will have to give and take in order to have a positive relationship.

The main thing that both sides need to remember is that in order for the relationship to work, both sides have to gain something. Too many times, event rights holders lose sight of the fact that the facility has costs associated with operations, and will try to chisel too hard to get that great deal they can brag about. In addition, there are times when a vendor will turn away business because he or she fails to understand that an empty space generates zero dollars and that sometimes in the first year you have to give a little more to lock in an annual client.

The rule of thumb I find is that when both parties have a clear understanding of their position, the real negotiations can begin. To create the best understanding, then, you have to be clear about the parameters of your event. Create a prospectus that details your desired dates, expected attendance, spectator participation, food and beverage needs, parking needs, etc.

Unfortunately, many event holders overstate their position when negotiating and over-embellish what they are bringing to the table. Nothing can frustrate a vendor more than a group that promises something -- large attendance, strong registration, heavy media coverage, lots of volunteer support, etc. -- and then fails to live up to that big promise.

Making up or padding data might initially get you something you want, but in the end, it'll come back to haunt you. Just as with working on a career resume, you'll need to be able to list history and references for the previous events you have put on. You want to be able to give out the names of vendors you've previously worked with -- whether this means a facility itself, or a subcontractor within it, such as a food service provider or a logistics management company. And when a previous vendor is able to tell a potential vendor that you were honest, direct and good to work with, your bargaining position gets that much stronger.

Of course, maybe you're representing an event that is brand new, and which therefore has no history. If this is the case, you may need to be the one who makes just a few more compromises in the negotiating process, since you're an unknown quantity to the vendor. Rest assured, the coming years will see you in a better bargaining position.

Understanding that both parties have budgets and quotas is a sure way to get moving on the right foot. It is the job of the site selector to get the price down as much as possible while maintaining the integrity of the event, while it’s the sales representative’s job to sell space and generate revenue for the venue. Mutual respect for those needs will allow you to work together, and to enjoy a harmonious relationship.

A key point to getting your ideal date and staying within your budget is looking at the venue’s schedule and determining if you are in peak times or off-peak times. During a time of peak, or high demand, you are going to be negotiating from a point of weakness as the venue is going to have less inventory right off the bat and even less urgency to put 'heads on beds'  (or in your case, athletes on the field and fans in the stands). Compare this to an off-peak time when you are going to be negotiating from a position of strength, and will be more likely to be able to negotiate a better price and more amenities because the venue is going to want as many bodies in the building as possible.

Photo courtesy of Lake Murray Country

To put it more succinctly, then, what you're looking for when considering the above factors are dates, rates and space. In general, you can get two of the above, so decide which two you are most concerned with. For example, do you definitely want a certain month or week, and do budget constraints dictate a specific rate or price range? Or is it all-important that you have what you consider to be that one perfect facility that offers all the practice fields, as well as the stadium? Make your choices and go into negotiations, focusing on what you need and being flexible about what isn't quite as important.

All too often, those with a sports event want to approach their potential vendors with a win-at-all-costs attitude. That's not negotiation, though. Negotiation is the art of compromise. It's working with your vendor as a partner (not a competitor), and understanding that give and take will be part of that partnership. Being uncompromising has no place in this arrangement. By being willing to come across, you both stand to gain, which leads to better working relationships, and more lasting ones.

That, of course, brings us to the next factor to remember: longevity. How many years are you willing to commit for? I find that if you are willing to commit to a longer-term contract, you can get a big savings because you offer the venue constant revenue and locked-in use for several years. Who wouldn’t like a sure thing every year?

When negotiating starts, I find it essential to get the major parts of the deal agreed upon first so you still have the small items available to barter with. So for example, if you lock down a great rate for the usage, you might bend a little bit and allow the venue to charge a nominal fee for parking as an effort to make up for the discounted rate. Many times you can pass usage fees down in an effort to keep the larger costs in your budget. Just don’t forget that your end user may prefer to have many of the amenities tied into the upfront cost than to be nickel-and-dimed later.

Now we come to a piece of advice that sounds almost completely counter-intuitive after all we just said: If negotiations aren't proceeding well, and if you feel the vendor is being completely inflexible, you may have to be willing to walk away. I'm not advising you to quit, or to threaten to do so every time things aren't going your way. I'm saying that not every contract is worth pursuing, no matter how promising it initially looked. (Note to facility managers: this point is meant for you to consider too).

 

Photo courtesy of Lake Murray Country

Look at it this way: when you're negotiating, you're still in what we sometimes refer to as the 'courting' stage of the relationship. You haven't entered into a contract, but the other party certainly should want you to do so, and at least should be willing to meet you halfway in order to make that happen. If they're being rigid now, when so much is at stake, you might be better served to find someone who will be willing to work with you. Explore more than one vendor, even if only to give yourself the peace of mind that comes with knowing there's more out there. And sometimes, walking away can give you time to cool off, and can give both parties a better perspective.

Negotiation has to do with giving and taking, and with working toward the middle of the table in order to gain something that is agreeable to the event rights holder and the vendor. It's not a game where only one player can emerge the victor; it's a process in which the ultimate goal is to create a win-win situation.

Get the big things that you need and compromise on the rest. It's that simple.

About the Author

Aaron Del Mar

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