Seal The DealSeptember 2, 2020

Learn The Nuances Of Contract Negotiating To Get The Best 
Agreement For Your Client By
September 2, 2020

Seal The Deal

Learn The Nuances Of Contract Negotiating To Get The Best 
Agreement For Your Client

Deal

Congratulations! After visiting several different properties in search of the best site for your next conference or meeting, you have reviewed proposals and made your decision. Now comes the moment of truth when you meet with the other party to negotiate the details of your contract, an agreement of mutual understanding to spell out the commitment that each of you has made and which protects you both from potential liabilities or damages. As any meeting planner knows, the success of a meeting or conference lies in the details. Here then are tips from experienced negotiators to help ensure your meeting success.

Develop a Collaborative Mindset
In sales circles, there’s an old adage that says: “In interactions between salespeople and potential customers, the salespeople enter the conversation afraid that the customers won’t buy, and the customer’s afraid that they will.” Instead, entering negotiations in a spirit of “What can we do together?” reduces the fear of being hoodwinked and builds a foundation of trust between both parties at the outset.

John Chen, CEO of Geoteaming, a technology-oriented, team building company, and author of “50 Digital Team-Building Games”, thinks event planners have a choice of how they approach their negotiations. “You can be ruthlessly cutthroat, and you can do that if this is a one-time transactional piece,” or instead, he says, event coordinators can enter the process in a spirit of fairness. “I don’t believe the world is fair; but, the idea of fairness is worth pursuing.”

He continues, “When you negotiate, you want a good deal for the other person. Ours is a relationship business, so how you negotiate this could mean the next 10 deals. Because, if they love working with you, they will want to work with you again.” The meeting planning business is a tight-knit, professional community. “Your personal brand begins with your last client,” he explains. Successful negotiating reflects “fairness and is about having the integrity to make it right.”

Attorney, speaker and author, Mark D. Grossman agrees. “Everything you do is a negotiation. And it’s in your personal life, too. I believe in fair-fair. I don’t believe in win-win. Win-win is a feel-good thing and has become a cliche,” Grossman says. “Sometimes, it’s not really win-win because one party has more power and leverage than the other. Ultimately, it’s about fairness. You don’t have to beat the other person into the ground even if you’re ‘winning.’ Fairness covers a big, fat continuum. Your job is to claim your fair share of the pie.”

As the 2019/2020 president of MPI Oregon Chapter and events director for YPO, Cathy Mason, CMP, has been on both the supplier side and in the meeting planning community during her 30-year career. She advises, “Be transparent and upfront because you want an agreement that’s useful for both parties. Don’t try to pull the carpet out from the supplier you’re trying to work with.” Mason cautions about the need for planners to be realistic in their expectations and reasonable regarding which hotel properties to approach initially. “Don’t request an RFP from a luxury hotel property if you know you’re operating on a tight budget.”

Know the Value You Bring to the Negotiating Table
“A good negotiator negotiates a bigger piece of the pie. A great negotiator grows the pie,” Grossman explains, meaning that the greater the client’s perceived value to the host property, the greater the leverage that the meeting planner has in negotiating the terms of the contract. “Let’s say you work for me and you want a raise,“ Grossman says. “When you ask for a raise, create some value and then we’ll divide the pie based on that value. So, if you want more money, bring more value to the table.” In client terms, he says, “If I sell you A, B and C, think about what added value you can bring to increase the size of the sale. How much does the potential client want your proprietary information or your influencers? What are they willing to pay for it?” It’s not enough to know the value you bring, however. “You have to clearly communicate your full worth, and value and expectations,” Mason says. “You need to be very clear about what your specific needs and concessions are. You have to choose your battles.”

For independent meeting planner, Russ Kembel, owner of Russ Kembel & Associates, the value of relationships cannot be underestimated. “You can’t buy relationships,” Kembel says. By way of example, Kembel shared a story of what happened when he made an  on-site visit and requested one of the property’s special rooms with a stage for his client. When the director of sales said that was out of the question, that they never provided that room for his particular kind of event, Kembel simply called his friend, the general manager. Soon afterward, he received a call from the director of sales offering the use of the room as he had requested.

Ask Open-Ended Questions
Communicating early and often builds rapport and respect. From Chen’s perspective, “Negotiations have nothing to do with money. They have to do with acquiring as much information as possible for both of you to make an educated decision.”

Grossman says, “Don’t assume you know what the other side needs . . . ask. I’m a big advocate of being an investigational negotiator.” What should event planners be listening for exactly? “Details, their personal agenda, what they want, need and require.” He adds, “You know yours and you’ll tell them in due course because you may discover there’s something easy for you to give away to satisfy their desperate need.” How you ask the questions is imperative. “Actively engage in your questioning so they don’t think they’re being interrogated,” Grossman advises. “You need to be asking open-ended questions and then drill down as necessary to get to the information you want.”

Chen adds, “You have to be curious; you have to ask better questions than the other customers because, when you ask questions, you discover resources.”

Businessman shaking hands to seal a deal with his partner

Read Between the Lines

Intuitive listening is the ability to read between the lines, to pick up on silent signals that tell a larger story than only the spoken words. As the author of “The Ultimate Guide to Sales Training”, Dan Seidman is a globally recognized authority on selling. He became intrigued with Dr. Paul Ekman’s research in emotional intelligence and influence and began applying Ekman’s findings to the sale process. He has since developed his own program, Read Emotions, to help professionals recognize emotions through facial micro-expressions to build healthier, more positive relationships.

Seidman explains that there are basically seven universal emotions that can be seen on someone’s face in the flicker of half a second: surprise, fear, anger, disgust, contempt, sadness and happiness, whether the individual is aware of it or not. When people learn to recognize the triggers of these emotions, theirs as well as the other party, they can address the emotion and respond effectively. For example, the expression of anger indicates a goal that is being blocked. Perhaps the hotel property manager felt the event organizer asked a question that interfered with the manager’s personal desires or vice versa. An appropriate question to address the emotion might sound like this: “Is there anything here that would keep you from having as successful an outcome as you hoped to have?”

Seidman continues, “Suppose you perceive an expression of disgust on the other person’s face, perhaps in response to pricing that the person felt was too high.” To address the emotion behind the expression, ask, “Is there anything we’re talking about that is just a bad idea that you want to discuss?” If a person expresses contempt, which the other might view as superiority in response to a stupid question, you could ask, “Do you have a better idea that we can discuss?” Practice, but “No pouncing,” Seidman cautions. You can’t say, “You look angry” because calling out the emotion you observe could cause confusion or defensiveness if the other person is unaware of their expression. Seidman recommends practicing your ability to read emotions by switching to video calls like Zoom or Skype in your client interactions. It’s also helpful to bring a partner to your conversation whose role is to pay attention to the other person’s emotional reaction as you speak, rather than focus on you, the speaker.

Ask for What You Want
Everything is negotiable. Both Chen and Kembel agree. “I never say never,” Kembel adds. While he recommends that event organizers should “try to negotiate everything upfront,” he also says, “Don’t be afraid to ask for what you want.” You might not always get it, but if you don’t ask, you won’t for sure. When Kembel stepped into a new role negotiating contracts for his company’s events, he was presented with two contracts that had already been signed by the person who preceded him and the host property. Kembel, however, thought the terms put his company at a costly disadvantage. He humbly approached each property claiming he was at their mercy, but asked if they could renegotiate the contracts. Each property agreed, and Kembel ended up saving his company thousands of dollars.

Angel Hanson, CMP, CMM, CEO of Angel Events, concurs. She says,  “Don’t be afraid to ask for anything, push it as far as you can, such as discounts on F & B, A/V and any other service within the hotel. Ask for complimentary group arrival welcome amenity, complimentary bottled water in rooms, etc.” Hanson also recommends including a ‘walk policy’ in the contract. “Walk policy covers your attendees who may arrive late at night and the hotel is oversold,” she says. “If you don’t have a policy in place they can send your attendees away. By enforcing in a policy, your attendees are protected. It’s not something that is in a standard contract, you have to ask for it.”

Read the Contract
“Every clause that I have added to my proposal has a story behind it,” Chen says. “For example, we have waivers you have to sign. In Puerto Rico, when they received the waiver, the client’s lawyer freaked out because they hadn’t seen that before. Now, we say in the contract that you must review and approve our waiver within two weeks.” Chen continues, “The rules are always created by people who wanted to spoil the party. In Washington State, Gov. Jay Inslee had to create a rule to close the beaches because people weren’t listening to the need for social distancing and were still going to the beaches during the coronavirus outbreak.” In yet another example, a telephone conversation with a client three weeks before the event revealed a different scheduled date than the one they had committed to in the contract.

Chen mentions one big problem that surfaced in the early days of COVID-19. The situation involved a large hotel property that began enforcing penalties on organizations that cancelled their meetings when the coronavirus was still at Level 3 or Level 4, not yet at the pandemic level. It soon became apparent why event organizers need to understand what terms and protections have to be in the contract and what both parties can do together to resolve the situation in both parties’ interests. For example, a hotel property might accept moving your meeting to a later date for no fee and no penalty.

Getting down to the tiniest detail is important. “Specific clarity on what you need is imperative,” Mason says. “All the contract language should be specific to your needs so both parties understand liabilities on both sides.” Chen adds, “Eighty percent of my clients don’t read the contract. Your job is to read it and ask questions” to clarify mutual understanding and to avoid later misunderstandings.

Build Positive Relationships
Entering negotiations with comfort, and confidence, gets easier with practice and experience, especially when the event organizer has taken time to build positive relationships with key players even before negotiations begin. After the 2008 recession, Kembel received a lunch invitation, followed by an on-site tour with a hotel property manager who asked him, “How can I get some business in here?” Kembel responded that there was no business to be had immediately in the wake of the economic downturn, but he strongly advised that the hotel staff use the downtime to call different potential clients. “Invite them to lunch, and get to know them on a personal level. That way, when the economy bounces back,” Kembel explained, “the hotel will be first in mind to host the company’s future business meetings and conferences.”

Practicing these tips will help event organizers negotiate contracts like a pro. But, just in case, Chen advises meeting planners to develop their “event” sense “to detect potential problems before they become bigger.” In Chen’s case, “In 10-minutes we prevented a giant disaster when the client had the wrong date three weeks before our event.” When asked what happens when all else fails, Chen says, “Remember, there’s almost nothing that a bottle of wine or chocolate can’t fix.” | I&FMM |

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