The Ultimate Contract Negotiation Guide
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This document provides a comprehensive guide to contract negotiation. It begins with defining negotiation and discussing common myths. It emphasizes preparing by understanding your skills, priorities, and alternatives. Key aspects of the negotiation process are presented such as each party presenting their position and attempting agreement. Timing of negotiations is an important consideration, looking for conflicts or impending decisions. Role plays demonstrate effective negotiation strategies.
The Ultimate Contract Negotiation Guide
- 1. The Ultimate Contract Negotiation Guide
- 2. • Written By: Edwin J. Goitia • A Promo Rockstars Publication • Visit us at http://www.promorockstar.com/group
- 3. • Note: This guide has been put together for independent contractors and promotional marketers alike. Although we speak in a general sense, make sure to do your research and ask yourself if negotiation is even a feasible occurrence in your particular situation. In most cases, negotiation occurs when vying for a management position OR when trying to sell business products/services as a merchant/vendor/consultant. Good luck!
- 4. What is negotiation? • Negotiation is the act of two parties discussing the pros and cons of a particular problem at hand in an attempt to arrive at an agreement.
- 5. What do you need to know about negotiation? • Negotiations can be tricky, uncomfortable and time-consuming for those who may not be as experienced with it.
- 6. The Anatomy of a Negotiation • Presentation of a problem at hand. • Where both parties stand. • The issues that will make/break that deal. • Meeting at a “middle ground”. • Covering the pros/cons. • Listing out the qualifications for driving the decision-making process. • Deciding on a final outcome (along with reasoning)
- 7. Party #1 • Present research/claims to support their argument. • Reassessment of where both parties stand. • Open the discussion to hear Party #2’s take on the issue at hand.
- 8. Party #2 • Present research/claims to support their argument. • Reassessment of where both parties stand. • Open the discussion to hear Party #1’s rebuttal.
- 9. Both Parties • Attempt at agreement • Repeat • Finalize agreement or Postpone till another date/time to reassess
- 10. Common Myths • Before we go into scenarios specifically in relation to independent contractors, let’s cover some myths.
- 11. Myth #1 • Negotiation is only for the pros. • WRONG. Negotiation is how we learn to use our skills and qualifications to their fullest extent. As we are all natural sales people (we sell ourselves and our services daily!), we must learn to lay out our cards for a contractual agreement and play our hand.
- 12. Myth #2 • Negotiation is an easy way to lose a contract. • If done properly, one should never worry about losing a potential contract with a client. As long as a middle ground is met, both parties should be happy to an extent. If you try to sway everything to your favor, and it is not a win-win for both parties, you can potentially lose the opportunity.
- 13. Myth #3 • Negotiations are hard. • Just like having a normal conversation, a contractual negotiation should never feel tense or difficult for any parties. Be laid back in your approach, yet stern in making your points clear. The conversation should never feel hostile, and again as long as it is a win-win and you drive the conversation to meet at the middle, all should be well.
- 14. Myth #4 • Clients don’t like to negotiate. • We may sometimes see or hear that what you see is the final word or say, but just remember, YOU are the one providing the service. If you can find extra benefits to offer to the client for your time and services, you should easily be able to build up the value of what you are providing in order to bolster incentives, pay, or any perks per your contractual agreement. There is ALWAYS more room in the budget.
- 15. Myth #5 • I’m not good enough to negotiate. • Absolutely wrong. We all have certain talents and skills that make us stand out in the marketplace. Do your research, take time to figure out what you can over deliver in, and always use it as your secret weapon in negotiating with a client. If you can surprise them and make their lives easier somehow, do just that.
- 16. Skills & Qualifications • As independent contractors, it is easy to forget what skills and qualifications you may have. Here are some you may want to remember (broken down by different types of roles). • You will also note some of these can be areas of study in college or any school of advanced education.
- 17. Actor/Actress/Model • Writer/Blogger • Podcast/Radio Personality • Photographer/Photo Editor • DJ • Communications/PR • Sociology/Psychology • Fine Arts • Media
- 18. Production Assistant/Manager • Teleprompter Reader • Stage Production • Lighting/Rigging • A/V Setup/Technician • Broadcasting • Directing/Editing • Film Studies • Film Technology • Management
- 19. Brand Ambassador/Promotional Model • Business • Psychology/Sociology • Persuasiveness • Organization • Knowledge of MS Office & Windows OS • Social Media Maven • Photographer/Videographer • Automotive/Tech/Beer/Wine Conneisseur
- 20. Market Manager/Regional Manager • Knowledge of CRM Software (Customer Relation) • Venue Relations and Negotiation • Site Checks and Activation Layouts • Google Maps/Earth • Securing Venue Permits/Liability Permits • Food safety/Event Safety Forms/Certifications • Administrative/Staff Management
- 21. Tour Manager • DOT Certification • Knowledge of trailer hitching and driving large-sized box trucks and trailers. • Route mapping • Activation site-checks and placement • Load-in/load-out/production • Travel Hacking
- 22. Timing • Not everything should be negotiated right away. • One should always gauge in the beginning whether it is worth negotiating a potential contract in the first place. • Let’s talk about the timing of a negotiation.
- 23. Conflict • When a conflict is present, it makes a negotiation seem more necessary than when there is not. • Conflict typically leads to less of something for both parties. For example, less money is to be made if the deal is to move forward with no negotiation.
- 24. Types of Conflict • Deadline is fast approaching • Change in negotiator (individual) • Contract set to expire soon • Cannot prevail through a power struggle • Power struggle is unresolved/undetermined
- 25. How To Determine Timing? • Once you have recognized a conflict, and you know it is one that calls for a solution, it is time to present options to the other party. • Ask yourself the following questions:
- 26. 1) Are all the parties interested in negotiating? 2) If not, why is one or more of the parties reluctant? 3) Can anything be done to make negotiation more attractive to them? 4) Do the parties all know their alternatives to a negotiated settlement? 5) Do they feel those alternatives are good? 6) Do the parties have a legitimate leader or representative who could effectively negotiate for them? 7) Is a forum available for negotiations? 8) Is a credible mediator available to assist in the negotiations? 9) Do the parties agree on the credibility of this mediator?
- 27. Timing Results • Once you have determined the conflict, and have reviewed these questions, you must make your move. • Keep good track of questions being asked, challenges presented, and the dates that they are implemented. • This will give you a good sense of the trend that your negotiation process is heading in. • If things are not looking good, look to have a resolution or agreement soon based off your most recently agreed-at-point.
- 28. Other Tips To Know In Negotiation • Back it up with claims/research, know your facts, show your cards. • Rank your priorities prior to going into a negotiation. • Be transparent in your communication.
- 29. • Know your walkaway price prior to going in, as it will allow you to make better decisions “in the moment” and not have reservations afterwards. • Set the stage by making the first offer. Higher prices make the buyer focus on the advantages, the positives. • Counter offers typically make both parties satisfied.
- 30. • Identify what is interfering with a deal. • Help solve the problem the other party has brought to the table. • Go in with zero assumptions.
- 31. • Admit that you don’t know what you don’t know. • Do your research, ask well-crafted, open-ended questions at the right time, in the right tone. • Leave yourself room to negotiate.
- 32. • Leave emotion out of it. • Don’t negotiate in the first place, unless you need to. Sell to the value. • Don’t negotiate with yourself. People tend to lose confidence in themselves when they go into a negotiation.
- 33. • Never accept the first offer. • Never make the first offer, if you can avoid it. • Listen more and talk less.
- 34. • Never give free gifts. • Ask yourself 3 questions: – What is the concession going to cost me? – What can I do to make it equal for me in return – Avoid the “quick deal”
- 35. The Agency Side of Negotiation • Agencies and account managers – The role of account managers – Limitations – Where negotiation plays a role
- 36. Negotiation Process from the Client Side • Account Manager must fill X number of roles at a budgeted rate of Y. • For higher level management roles (team leads, market managers, regional/national managers), there is almost always extra room in the budget. • For regular contracted positions (non-specialized), typically the only thing that is negotiable is hourly pay/flat rate, mileage, and parking/travel.
- 37. What clients can typically cover • Mileage (rate varies by state) – According to the IRS, standard rates are as follows: • 56 cents per mile for business miles driven • 23.5 cents per mile driven for medical or moving purposes • 14 cents per mile driven in service of charitable organizations
- 38. • For Management/Travelers: – Hotels – Food – Parking – Misc Travel Expenses Related to Work
- 39. What they do not cover • Room service • Clothing Expenses (unless required to purchase clothing) • Car Maintenance • Amenities • Entertainment
- 40. What is off limits • Asking to work partial contract for same pay. • Asking for company credit card without being offered one • Asking that a meal be provided during your shift.
- 41. Role Playing Examples • Salary Negotiation-Click here to watch • The Art of Negotiation-Click here to watch • How to Overcome Negotiation Fear • General Contractor-to-Subcontractor Role Play
- 42. Works Cited • http://www.forbes.com/sites/work-in-progress/2013/12/05/six-surprising-negotiation- tactics-that-get-you-the-best-deal/ • • http://www.businessweek.com/articles/2014-08-04/five-negotiating-skills-that-should- be-taught-in-business-schools • http://www.nolo.com/legal-encyclopedia/contract-negotiation-11-strategies- 33340.html • • https://www.americanexpress.com/us/small-business/openforum/articles/10- dirty-negotiation-tactics-and-how-to-beat-them/ • • http://changingminds.org/disciplines/negotiation/tactics/tactics.htm • • https://www.youtube.com/watch?v=oy0MD2nsZVs • http://www.mymajors.com/career/actors/skills/
- 43. Works Cited (Cont…) • http://www.mymajors.com/college-majors/ cinematography-and-film-video-production/ • http://www.colorado.edu/conflict/peace/trea tment/idripe.htm • http://www.irs.gov/2014-Standard-Mileage- Rates-for-Business,-Medical-and-Moving- Announced
- 44. Thank you! • If you liked this free resource, please feel free to check out our website for more info. • http://www.promorockstar.com/group Also, sign up to the latest contest and get FREE access to the BRAND-NEW PROMO ROCKSTAR UNIVERSITY! http://www.promorockstaruniversity.com/