Let’s face it: when it comes to deals with celebrities or influencers, it’s impossible to emphasize enough how important it is to save money wherever you can. Budgets are tight and profit margins are razor-thin, so you need all the help you can get. A great way to lower your costs is also one that many people don’t consider: negotiation.
Today, we’re going to cover all the things you need to know about effective negotiation. But first, let’s look at how you can build the strongest possible foundation for your deal. By doing that, the negotiation process will go that much more smoothly.
Make Your Budget
The first thing you need to do is make a clear and exact budget — the more detailed, the better. Without knowing exactly how much you have available to spend on the deal, there are two major risks that can come up during the negotiation process.
First, you may believe that you have more money to spend on the deal than you actually do; when that happens, it’s really easy to go over-budget. And second, without an accurate budget, you might think you have less money to spend than you actually do — in other words, you might accidentally price yourself out of an opportunity to make a deal.
Your budget will also play a big role in what caliber of celebrity, influencer or artist you can afford for the deal — as a rule of thumb, the more money you have to spend, the more visible the celebrity or influencer you’ll be able to make a deal with. Without knowing your exact budget, though, you won’t have a clear idea of who’s available in your price range.
Find The Right Fit
Once you’ve made your budget and narrowed down the list of people you can afford, the next thing to do is find the celebrity or influencer who’s the right fit. Not only does this help the business deal from a general perspective, but it can also make the negotiation process go a lot more smoothly.
Finding the right fit can mean, for example, finding a celebrity or influencer who supports the same causes or charities as you. If you and the celebrity or influencer share the same passions or causes, they’ll be more excited about working with you; on top of that, if you reach a sticking point in negotiations with their representatives, they might show a little more flexibility on their side to help a deal come together.
Make A Detailed Offer
Obviously, you have to make an offer before any negotiation can start. But if you want to put yourself in a good position to negotiate successfully, it pays to make your offer (like your budget) as detailed as possible. The purpose is to set clear expectations for you and the celebrity or influencer you’re working with. You’d be surprised how many negotiations fall apart because one side thought the other was going to provide something that wasn’t clearly outlined up-front.
Once you’ve laid the foundation for your deal, there’s only one thing left to do: negotiate. Here are some top tips to keep in mind.
Tips For Effective Negotiation
Make The First Offer
You might think it’s a better idea to let the celebrity or influencer’s representatives give you the offer they think is fair. But they’re not going to be as concerned with what’s fair to you as they are with what’s fair to their client; in other words, they’re probably going to ask for more than you expected. Whoever makes the first offer establishes what’s called an “anchor” number, and the rest of the negotiation process will be centered around that amount.
Let’s say you’re hoping to spend no more than $50,000 on an endorsement deal. If you offer $40,000, then move up to $50,000 (which is what you wanted to spend anyway), you look like the “good guy”; after all, you agreed to pay an extra $10,000. But if you let the celebrity or influencer set the number and their opening offer is $60,000, then you’re going to have to fight to get them closer to your target number of $50,000; not only that, but they won’t think you’re generous for paying them $50,000 — they’ll think you’re under paying them by $10,000.
I want to emphasize that this isn’t always true, there are many situations when you will want them to provide the price. Read more about getting the best deal on celebrity negotations here.
Don’t Lead With Your Best Offer
One of the most common mistakes you can make when it comes to the negotiation process is making your first offer your best offer (or matching your first offer to the quote you received). Even if a celebrity or influencer quotes you a certain amount for a deal, that doesn’t mean they necessarily expect to receive it, nor does it mean you’re obligated to pay it.
When it comes to making the initial offer, take 10-20% off of the total budget you have available. That way, if the celebrity or influencer’s representatives come back with a higher figure, you’ve left yourself some room to offer more without going over-budget.
Communicate Your Priorities
If you’re offering a deal for a celebrity or influencer to do specific tasks that they don’t want to do, there’s a possibility that they aren’t interested in those particular tasks. Instead of ending the discussion, it’s a good idea to communicate what’s most important to you to see if you can find some common ground.
For example, let’s say you own a clothing brand and you want to get your brand’s name out there using social media. The celebrity or influencer you’re targeting may not want to do social media posts, but by communicating your goals, you’ll have a better chance of finding a solution that works for both of you (like having the celebrity or influencer wear your clothes to their next public event). By communicating your priorities, you let them know exactly where you stand and what you want from the partnership, which can make it easier to figure out alternatives if your original plan doesn’t work for them.
There’s an old saying about negotiations: “A good compromise is when both parties are dissatisfied.” In other words, a good negotiation probably means both parties had to fight for what they got; if you didn’t, then you probably got a bad deal. So when you make the first offer, don’t expect it to be accepted right away — more than likely, the celebrity or influencer will respond with a counter-offer. And when you get that counter-offer, don’t be afraid to counter it again if it’s still not the number you had in mind.
Don’t Be Afraid To Walk Away
Last but not least, a key part of negotiating is knowing when to walk away. If you think you and the celebrity or influencer are too far apart on either the money or the responsibilities, it’s okay to walk away from the deal. In fact, you should have a “walk-away” number in mind before the negotiation process even begins; if you can’t get the celebrity or influencer to hit that number, then it’s best to cut your losses and try again with someone else.
Negotiation is vital not only because it can save you significant amounts of money, but because it can also lead to a smoother partnership for you and the celebrity or influencer you’ll be working with. But remember: negotiation starts long before the offer stage. So keep these tips in mind the next time you’re planning a deal — you’ll find the process going a lot more smoothly (and costing a lot less money) than you ever dreamed.