A zero sum transaction is one where there is a winner and a loser, just like in sports.
But fee negotiations aren’t a sport. There should be no winner or loser.
If you play the zero sum game with your Client, you’ll end up with the short end of the stick. He can quickly come up with many reasons why next year’s fee should be lower. He can talk about your performance, about his business being in a difficult moment or he can always take refuge in the fact that budgets are “set”.
And if nothing else works, he can always pull out the big hammer and drop subtle hints about moving the account. He is after all, the Client.
There is very little the Agency can do to rebut these arguments. That’s why you need to change the rules of the negotiation and move away from zero sum.
Don’t argue about money but rather focus on process. Talk about changing some of these things:
- The briefing process. Get them to agree that NO work will be done without a Brief that has been signed by the Client decision maker
- The Presentation. Persuade them that the decision maker should be present at the first presentation of the work, both at concept stage and at execution.
- The feedback process. Have them agree to giving the agency only one set of comments that have been approved by the decision maker
- The number of revisions. Set a limit to the number of changes that are covered under the fee.
- Limit the number of meetings: Estimate how many face to face meetings will be covered under the fee.
- The project timetable: Agree on acceptable timelines for major projects.
Importantly, you must hold firm on whatever agreements you come to. Otherwise you are back to square one.
Most Clients will agree that the process is currently very inefficient and will find it very hard to rebut your suggestions. These are battles that the Agency can win.
Making the zero sum fee negotiation go away will help the Agency be much more profitable.