On this episode of the Career Success Podcast we invited Minerva Acevedo to speak with us about the art of negotiation. Minerva has worked in consumer packaged goods in both marketing and sales roles, in the health and wellness industry with Johnson & Johnson and in the food industry with McCormick & Company. Through both experiences, she have been exposed to negotiations with large corporations such as Costco, Wal-Mart and some of the top Canadian retailers and media companies.
In this episode we discuss:
Negotiation vs. Selling – what are the key differences
Why many people feel uncomfortable with negotiation and how to overcome this
How to walk away from a negotiation feeling successful
Lauren: Hi, I am Lauren Stiebing and welcome to this episode of the Career Success Podcast. Today, we will address the topic of negotiation. Negotiation is a part of everyone’s day to day, whether in their personal or professional life. I’ve spoken with many individuals who feel very uncomfortable when negotiating. And for this reason, I’ve invited Minerva Acevedo to discuss with us how she has been successful in negotiations. Welcome Minerva.Minerva: Thank you so much for having me. Lauren: Thank you for joining us today. Why don't you share with us a bit of background on yourself and your experience with negotiation?Minerva: Certainly, I have worked in consumer-packaged goods in both marketing and sales roles, in global companies, in the health and wellness industry with Johnson & Johnson and in food with McCormick & Company. Through both experiences, I have been exposed to negotiations with large corporations such as Costco, Wal-Mart and some of the top Canadian retailers and media companies. I have received one-on-one training from top firms industry and also from business school. My experience ranges from contract negotiation, releasing a brand on shelf. As well, I have experienced challenges and business impacts from making assumptions about you know what the other party expected and not really understanding their motivations and objectives. Internally, I also negotiate every other day with supply chain marketing and finance, mostly on an ongoing basis and lastly at a personal level, negotiation has been key especially for example, at the end of my marriage, which was really not a conscious uncoupling experience like Gwyneth Paltrow. So, I tried to use some of my learning’s to ensure an outcome I would be satisfied with.Lauren: Okay. So you're using it both in your professional and personal life then?Minerva:Absolutely.Lauren: And what do you think are some of the biggest misconceptions about negotiation?Minerva: I think that many people assume negotiation and selling are the same thing and try to approach them in the same way while they are not. Selling is promoting the attributes of a product, service or an idea while negotiating should about you know, maximizing value and really involves a lot of planning, research, questioning, listening for what’s being said but also to what's not being said in order to have better control of the outcome. Also, some people think that negotiations are only for unions or heads of state or sales and procurement departments, major corporations conducting mergers and acquisitions but we all are involved you know, conscious or unconscious negotiations almost every day from buying a car, getting your kids to sleep at bed time or who's going to take the garbage out. To also negotiating a salary increase or even as a severance package really depending on the situation there might be value in taking the time to negotiate, but it's also important to know that not everything is worth negating.Lauren: Why do you think many people feel uncomfortable in negotiations?Minerva: I think it really is human nature and the perception that negotiations are about having conflict or maybe they fear that our proposal might be rejected by the other party which really feels very personal and it makes us feel vulnerable. It may seem like an intimidating process because we also have our egos and they get in the way and we let our emotions get involved. We tend to associate negotiations with being fair or about compromise when it really depends on the specific situation and how well we can control the process in order to achieve the outcome we desire. It's not really necessarily about winning.Lauren: Yeah. And what can be done to overcome these challenges?Minerva: Well, I think that we need to start by understanding our own position and the outcomes that we are striving for. Then at the same time, we need to identify potential trade-offs that provide value to the other party. We then need to get out of our own heads and into the other party’s head. This means doing research, asking questions to understand their strategy, their positioning and really more importantly listening to them to identify areas where we might be able to influence. Really creativity is very important. I think that maybe of the table at some point, may become a bridge to move through difficult negotiations thing; you know, carry this process forward. As an example, a contract doesn't necessarily have to be about financial value only, maybe improved delivery times or a reduction in packaging would help the other party in their effort to be more sustainable and it would be perhaps a welcomed proposition that can help deliver satisfaction to the other party as they send… as they get a sense of accomplishment.Lauren: mm-hmm. So in order to come out of a negotiation feeling successful, what would you say are the top three takeaways?Minerva: Well, I would say try to come out of every meeting with something even if it's only securing another meeting and do not be afraid of putting your proposal on the table first so that that's the one that gets talked about.Lauren: OkayMinerva: Second, once you're being comfortable… being uncomfortable, you get more clarity to choose the strategy and be flexible but never lose sight of your expected outcome and the kind of relationship that you want to have in the future after you're done negotiating. And finally, I would say embrace negotiation as a process to learn more about the other party, being curious and being genuine, being engaged; this is going to help create value not just for your own interest. Again, once the negotiation is over, continue to be aware of any changes in the other party strategy so that you're not caught off guard when their objectives change; it's an ongoing process.Lauren: Minerva, thank you so much for joining us today on our Career Success Podcast.Minerva: Thank you so much to you, Lauren.
For most people, having to negotiate probably ranks right up there with undergoing a root canal procedure or even public speaking. And yet, we all face many instances in both our professional and personal lives where we have to negotiate. M&A deals, supplier contracts, agreeing merchandising displays at retail stores are all business activities that involve extensive negotiation. But so too does asking for a raise or promotion. Persuading one’s child to go to bed on time or trying to get the salesman at the used car dealership to agree to a lower price are also examples of “negotiation”.
Despite the all-pervasive nature of negotiations, the process is something few of us enjoy. This is because some of us are not assertive enough and are unable to articulate our expectations and position firmly. In some cases, the two parties are not clear about what each of them values in a given situation and thus, what each is willing to give up to get what they value. In certain cultural settings, age and hierarchy also deter effective negotiations.
As Minerva Acevedo says in the LS International Career Success podcast, “negotiations may seem like an intimidating process because our egos get in the way and we let our emotions get involved. We tend to associate negotiations with being fair or about compromise when it really depends on the specific situation and how well we can control the process in order to achieve the outcome we desire. It's not really necessarily about winning”.
At its heart, successful negotiating is about giving to get; therefore, what matters is what each side gives up and what it gets in return. Negotiation is more art than science, as it involves other human beings, their egos and emotions in addition to more tangible gives and takes. The good news is that it is possible to acquire the skills needed to be an effective negotiator. Listed below are practical tips designed to improve one’s ability to negotiate and to also help move the other party along in the direction of a possible agreement. While some of the tips focus on the preparation, others are intended to guide one’s behaviour and actions during negotiations.
Do not view a negotiation as a conflict- it is in fact a process to narrow down differences and converge on common ground. All negotiations need not be inherently “zero-sum” in nature (meaning that one side loses all while the other wins everything). View negotiations instead as a way to ensure that both sides get what they respectively value more in the given situation.
Learn to separate person from the offer or counter-offer. We often view the offer made by the other side as inseparable from the person making the offer. This makes it easy to bring our biases, prejudices and personal dislikes into the negotiation process. In turn, this clouds our ability to assess the merits and demerits of the offer/counter-offer and respond meaningfully.
The key to negotiating successfully is to plan well. Give enough thought to what your side values and is ready to give up. But also try and anticipate what the other side values so that you can identify possible trade-offs that could become concessions that the parties agree to.
A seasoned negotiator is necessarily a consummate listener who picks up verbal and non-verbal cues to get a sense of what the other side values and what they might be willing to potentially give up. This information is critical to create new pathways and move forward, when what one has planned and practised is leading to deadlock. This is like a playmaker in a football game creating openings and pushing forward.
Understand that the other side may have different expectations than you in terms of the targeted outcomes. For instance, one side may be looking at maximizing prices (the supplier), while the other (customer) may be concerned about timely supplies, material quality and overall reliability- in addition to reasonable prices. Ms. Acevedo is bang on target when she says in the podcast “…negotiating is about maximizing value and involves a lot of planning, research, questioning, listening for what’s being said but also to what's not being said in order to have better control of the outcome”.
Often, we are afraid of putting our proposal on the table first, and we wait for the other side to make their move. Do not be afraid to be the first to articulate your expectations and proposals clearly. You get the first-mover advantage because you force the other side to respond to what you have offered. At the very least, you will get more time to discuss it thoroughly. But make sure you have thought through it beforehand.
During the negotiations, tempers may rise. Seasoned negotiators do not lose their cool; instead, they use the other side’s emotions to their own advantage. It is tennis season- so think of it as “unforced errors”.
There are instances where an apparent impasse is reached during negotiations just because the parties are unable to differentiate between their “interests” and “positions”. This results in people sticking to positions and in the process, losing sight of their interests.
Frame your proposals in ways that highlight what you believe the other side values. Your research will help you identify this in advance of the actual negotiations. This signals that you are thinking about the other side’s interests and helps making the other party more receptive. If possible, simulate negotiation sessions with your team members (some of them play the other party)- that can harness the creative diversity of the team and may give you new insights.
Sometimes, agreeing to met again after a few days to continue discussions and negotiations is itself a significant win- for both sides. It allows you to consult with your colleagues and bosses and re-evaluate your trade-offs and outcome expectations based on the information you have gleaned during the earlier meeting.
Be realistic about possible outcomes. There may be situations where what one side is asking for is simply not doable by the other due to reasons of law, policy, ethics/morality or even financial considerations. If you encounter non-negotiable trade-offs, be prepared to walk away. But remember that both sides are there to reach agreement- so chances are that the journey will continue after a break. Use every interaction to create a more robust picture of the other side’s preferred negotiation style, what they value, what trade-offs they are open to etc.
The most important piece of advice I can offer is this: overcome your fear of negotiations; the more you operate from fear, the greater the risk that you will give up more than you would have liked to simply because your fear will cloud your judgement and trigger reactions such as anger and obstinacy- the arch enemies of successful negotiations.
I hope you find the above tips useful as you negotiate in your professional and personal lives. Happy negotiating!
The global cosmetics market in 2017 was valued at over US$532 billion. This large market, which includes products for the likes of hair care, skin care, oral care, color cosmetics, fragrances, soaps and shower gels etc. is expected to grow at an annual rate of more than 7% in the next five years.
Historically, this market has been dominated by large players with well-known brands such as L’Oreal, Coty, Revlon, Elizabeth Arden... but like in most other consumer markets, the winds of change are blowing in the beauty products market too. The following trends are especially noteworthy in terms of their impact on the future of this business and how players must respond, as they impact both the demand and supply sides of this industry:
Baby Boomers and Generation X consumers are being supplanted by millennials and Generation Z
Growing move away from synthetic chemical-based products to those made from natural ingredients
Rapid growth outside western markets, especially in countries like China
Ready capacity for outsourced manufacturing is available in North America, Europe and Asia
Outsourced R&D of cosmetics and beauty products is now far easier than before
Convergence of channels to enhance experience
Digital technologies are making it easier for sellers to connect with and sell to consumers and prospective consumers
Social media is playing a key role in influencing first-time product users.
The most disruptive outcome arising from the combination of the above trends is the rise of the so-called “indie” players in the beauty products industry. These are typically new companies or brands, “independent” of large existing players.
What makes “indies” successful?
Given their newness, indies are in a good position to be able to take advantage of trends at every stage of the value chain.
Target market: Customers from Gen Z are digital natives. They rely on input and opinions of peers rather than brand recall or advertising. In the LS International Career Success Podcast, Gianni Pieraccioni, experienced Board-level executive with decades of experience in the consumer products space makes prescient observations about Gen Z, which accounts for a major chunk of first-time users. He says “These are people who either reject or do not know the brands of their mothers… they are the selfie generation… and they really are very much individualistic consumers”. He further adds, “They don’t look for brands… they see products rather than brands and jump from one to another in a perennial search…”.
Indies are able to come out with new products and because the loyalty to brands is rapidly decreasing in a key segment of the market, they can target that segment very effectively. And because this segment has both the money and the willingness to spend, it represents an ideal niche for up-and-coming indies.
Reduced time-to-market: By outsourcing R&D as well as manufacturing, indies are able to compress the time needed to launch new products or target new geographies. In addition to not having to lock up capital in fixed assets like manufacturing facilities or invest in in-house R&D, indies have the flexibility to capitalize on unique opportunities- for example, categories with shorter life cycles. These drive revenue and cashflows, while also creating brand awareness.
And because indies have outsourced manufacturing arrangements, they can scale up or scale down quantities more quickly. By tying up with manufacturers who have excess capacity around the globe, indies can also focus on reducing logistics costs, thus being able to benefit from the ability to reduce prices or gain from higher bottom-lines.
Marketing: Online sales eliminate the need for indies to invest heavily in their own stores. To take advantage of merchandising opportunities in brick and mortar stores, they can tie up with companies like Ulta, the US-based beauty product chain that offers superior customer experience by converging channels. In the above-mentioned LS International podcast, Mr. Pieraccioni explains how Ulta is making a difference. “You enter a store and you have mass-market products, prestige products and professional products… and the reason why they can offer all three categories and overcome the idiosyncrasies of the channels and the exclusivity of the channels is because they also offer services in store. They offer skin care services, makeup services and a full salon for hair color, hair care. So, by doing this, they are basically creating an experience for the consumer…the consumer is allowed to have access to every kind of product from every kind of channel in one place.”
Using social media channels to create demand is now very much a reality. For example, the US brand Glossier (which already has a cult following) was launched on Instagram; its website came much later. Glossier’s products were developed based on interviews conducted by founder Emily Weiss, a former beauty editor with Intothegloss.com. As Glossier’s web site informs visitors, Ms. Weiss “wanted to make beauty as much of an element of personal style as fashion” and that “Personal choice is the most important decision a brand can never make”. This fits perfectly with the highly individualistic style that a growing number of younger generation consumers are- irrespective of whether their gender and location.
Marketing as a business function has been one of the earliest to acknowledge the power of digital media and social media to influence target segments. Over time, technologies have made it easier to profile individual preferences and tastes with such finesse that customers are sent digital marketing communications based on evidence of their interest. In this knowledge-powered economy where there is greater propensity to consume video than pages of text-based copy, informed vloggers (video bloggers) are emerging as a powerful set of influencers, especially in the beauty products industry. Beauty bloggers like Zoella, Tanya Burr and others have millions of followers across channels like YouTube, Instagram and Snapchat. In a recent blog, beauty blogger Sophie Bianchi writes that in her opinion, “beauty vloggers are influential due to their likability, similarity to viewers, physical attractiveness, expertise and trustworthiness”.
The emergence of beauty bloggers as influencers is a huge change from times when celebrities were used as brand ambassadors. Another reason why the venerated habit of celebrities endorsing beauty products started losing its sheen was because technology allowed images to be doctored to make models look perfect. So people like you and me, who were supposed to be influenced by advertisements featuring “flawless” models, started becoming sceptical. In combination with other reasons listed earlier, loyalty to brands started to erode.
Digital technology is making it even easier for consumers to purchase online. Mr. Pieraccioni points to how in China, consumers can already purchase directly from social media platforms, without separately having to visit company websites or ecommerce portals. Such capabilities give indies tremendous opportunity to leapfrog more-established competitors with much larger advertising budgets.
If the above sounds like huge change for the industry, it’s because it is! Indies need talent that understands the brick-and-mortar aspects of this business, while traditional players need talent that can shake up ossified, conventional ways of thinking and infuse agility, innovation and technology-enabled transformation so that they too can remain relevant in the emerging landscape. And of course, established players willing to acquire indies need experienced talent for deal-making and integrating the acquired company with the acquiror.
PS: Men use beauty products too and the range of products they are willing to try is only growing. So right there’s another box you have to think outside of! https://www.reuters.com/brandfeatures/venture-capital/article?id=30351https://www.glossier.com/abouthttps://www.huffingtonpost.co.uk/sophie-bianchi/beauty-bloggers-zoella_b_11566248.html?guccounter=1https://www.theguardian.com/fashion/2018/mar/08/glam-or-sham-are-youtubes-beauty-vloggers-selling-out
The FIFA World Cup has started on and the sponsorship circus is on. When brands try to get traction from their partnership with the elite football teams and the World Premium Football competition we can question the future of sponsorship in the new digital era.
A long time ago, when Gen Z’s parents just graduated, i.e. approximately 25 years ago, sponsorship was all about putting brand names on panel boards around the football pitch and on team jerseys. The objective was to raise brand awareness in a gamble that the TV audience will help recognise and memorize the name and/or logo.
Sport Marketing Sales agencies have continued to flourish by selling to medium-sized-wannabe-big companies the opportunity to have their name around the pitch of a national or European matches or other sporting events, comparing real advertising time with hazardous visibility raising more internal C-suite pride than consumer intention to buy. When it comes for big or major events, on site visibility has moved from prime argument for partnering to must-have but not-enough-to-have, a somewhat reinsurance for the potential sponsors.
The measurement of the so-called TV exposure is still a golden standard as a KPI and the bread and butter of some research companies in the sports industry, without demonstrating the impact of the sponsorship as delivering big numbers in terms of equivalent advertising’s time and valuation, which doesn’t provide any insight about the performance of the brand among the main target audience of the corporate sponsors.
With premium right holders driving the most of their revenue from broadcasters with a correlated effect to push the matches’ broadcasts from free to air TV to pay TV with sometimes very narrow audience, the power of the brands as event sponsors is shrinking and the potential influence of the TV brand exposure is a less and less sustainable argument. Although TV is still king in terms of media consumption for sporting events, sport is going digital and social. The youngest audience and young adults have been shifting from TV to digital devices – the Olympic Games 2016 in Rio have been the turning point and the FIFA World Cup 2014 suffered from a decline of TV audience of the youths for the first time ever due to a transfer of viewing to digital devices (Laptop, mobiles, tablets). The digital landscape has currently no recognised measurement standard similar to what exists for TV, which brings more uncertainty about the understanding of the impact for sponsors.
Mc Kinsey already pointed out in 2014: “Sponsorships have become an integral component of marketing strategy. Yet many companies still do not effectively quantify the impact of these expenditures, even for events requiring significant spending such as the World Cup. A systematic commitment to a menu of analytic approaches allows executives to identify sponsorships that create value as well as those that don’t live up to their names.”
Disrupting the sponsorship approach is now mandatory to hit brands’ objectives as it’s more
and more is all about consumer engagement, impact and return on investment.
Brands should focus on 5 key rules to get more impact and traction and none of them is about brand exposure during the games.
Exclusive territory of expression vs. exclusivity of product category: so far Coca Cola gets the exclusivity of communication for the product category soft drinks and water for the main contracts. Now to raise the interest of the consumers, brands should define a territory allowing them to demonstrate what they bring to them and their community. The territory can be shared with several corporate brands as long as the consumers get the message: sustainability can apply to energy carrier, water supplier, waste management company… It’s all about a convincing and acute story telling towards the company main target audience.
Exclusive contents vs. “same right for the same category of sponsors” policy. Since the late 80’s, sponsoring packages were the same among the sponsors of a set level. Now each brand needs to offer a unique experience to their customers and consumers to differentiate from their competitors and deliver a strong advantage against those which are not official sponsors and use the theme. This implies as well that the right holders (for example an International Sports Federation) carve out some media rights to allocate them to their sponsors such as behind the scenes stories, athletes’ preparation … We have all seen during the last winter Olympics athletes sharing directly on their social media depriving the sponsors from potential activation.
Preferred access to data and analytics. Very few organisations are able to nail down all their data in a same place (for example ticketing buyers, merchandising consumers, audience). So far the ticketing data of the last Olympics or FIFA World Cup don’t belong to their respective international organisation, preventing to share with their international sponsors a clear picture of the fans. Sponsors should access data and connect them with the own ones to elaborate sophisticated and efficient activation’s plan.
Co-creation of unique assets. One of the privileges of an official sponsor is to use and print the logo of the sponsored event or organisation on products. Millions of Coca Cola bottles have been carrying the logo of the FIFA World Cup, for example, all over the world. This doesn’t deliver any advantage neither to customers nor the company itself as such. Sponsorship will move to strategic alliances allowing the co-creation of new products and new services with a revenue sharing scheme for a mutual benefit of the right holders (more potential revenues if the strategy is correctly defined and implemented), the corporate company (more profit if the offer is very attractive and unique vs the competition or money saving if the sponsorship doesn’t prove to be successful), the consumers (better engagement with the co-branded product or service).
Definition of sponsorship purpose. A sponsorship deal is usually contracted for a set period of time and the corporate company is focusing on getting a return of investment during this set period of time. The subject of legacy is more and more of importance for the companies’ shareholders, staff and consumers. What should the sponsor achieve to make its world sustainably better? This element is now crucial for companies willing to partner with mega events such as the Olympics or the FIFA World Cup