Whether it’s negotiating rates, yearly fees or project costs, agencies need to be prepared to negotiate.
Here are four reasons agencies should equip their account handling team with the right level of negotiation skills:
1. Procurement is highly trained. Account Managers are not
Major corporate companies have a procurement team to negotiate on behalf of the company. Procurement is tasked with purchasing all the company’s goods and services and ensure those goods and services are purchased at the best price and provide the most value.
Therefore if the agency is lucky enough to have a big corporate client, the agency’s account handler will find themselves at some point or other in a negotiation situation on behalf of the agency.
However, unlike their procurement counterpart, they usually don’t receive extensive training in negotiation strategies and techniques.
How much could that situation potentially affect the agency’s bottom line?
2. Account managers are people pleasers
While agency account managers are good at attending to the client’s day to day project needs and building a strong relationship, great customer service skills and playing hardball on costs are two separate skill sets.
Don’t expect an account manager to have both. Providing guidance and training in negotiation techniques will help them recognise when procurement might be using a technique to get what they want from the deal.
3. Account handlers are well placed to negotiate
Clients are increasingly looking for more value for less cost from their agencies and therefore these points of ‘value’ could potentially become collateral in a negotiation.
Similarly, when projects go off the rails due to client error, these incidences and situations become collateral for negotiating.
The account manager is usually the one who is closest to what’s happening with the account and is therefore very well placed to know what these negotiation points could be.
4. Agencies rarely carry out account profitability assessments and take corrective action
Unprofitable accounts need to be reviewed frequently. The information gathered from a thorough assessment of the account’s profitability can pay big dividends when stepping into a new negotiation situation with the client.
Account handlers need to be involved in the assessment due to their understanding of the client’s business and the history of the account.
The corrective actions can serve as key training points for the account handling team.
Can you think of any other reasons the account handling team need to receive negotiation skills training?
Are you prepared to negotiate?