The Fallacy of Win-Win Negotiations
In the past ten years or so, any article, seminar or blog post on negotiations seems to focus on “kinder, gentler, negotiations”. It’s all “win-win” negotiations now, and nobody gets the better of anybody. Planner and supplier discuss their needs, and work out a kumbaya-style agreement, after which they stroll arm and arm into the sunset. It’s the equivalent of every kid on every team getting the same trophy in little league, regardless of whether they came in first place or last. It sounds nice in theory, but it doesn’t reflect the realities of our world.
Or we hear “it’s about building relationships”, but in reality suppliers care a lot more about relationships when it’s a buyers’ market. When demand is through the roof and the tables are turned, however, a venue sales manager will rarely give up a more lucrative piece of business in order to preserve a “relationship”. Most of the time they couldn’t do so even if they wanted to; they’re under a mandate to maximize revenue.
As I sit here preparing for tomorrow’s webinar (Tuesday, Feb 14th, 1 pm EST) on “Negotiating With Venues“, I can’t help being struck by how nobody wants to talk about it, but here’s the ugly truth: there are winners and losers in the negotiation process. The winners are those that enter the negotiations with the most information about market pricing, and the losers are the ones who go in with little more than the naive notion that because the other side does not want to take advantage of them, they’ll get a fair deal.
Planners, by and large, are neither skilled at, nor trained in, sales or negotiations. Sourcing venues and vendors is only part of their jobs. Their strengths are logistics management, creativity, and strategy, and they’re evaluated based on how well their events achieve the organization’s goals.
Most venue sales managers, by contrast, are trained in lead generation, client mapping, pricing mechanics and salesmanship. They are intimately involved in their numbers, and diligently track and slice and dice the trends of every booking, even if informally. They are evaluated based on their sales performance, not by how well the events go in their facilities. For the most part, they want to book the planner’s event at the highest possible revenue level.
The two sides, therefore, have vastly different agendas and bring totally different skills to the table. To be sure, there are plenty of seasoned planners who know the value of their program and exactly what they should be paying. Further, many large corporations have aggregated their event spend and negotiated very favorable terms with venue chains. And there are plenty of venue managers who are asleep at the wheel and ignorant of the supply and demand dynamics affecting their calendars. For the most part, however, it’s not a fair fight. If the two sides were to have a contest on planning acumen, the planner would have the upper hand. But when it comes to negotiation, the planner is competing with the supplier on the supplier’s territory.
The only way the planner can level the playing field is with hard data on what others are paying in that area for similar events. She can start by getting a handle on how much competing venues will charge for the same program. Knowledge is power, and this helps the planner negotiate from a position of strength. Too many planners, unfortunately, don’t bother to do their homework, and under the false pretense of a “win-win” environment, are actually paying more than they should.