Jedi Mind Tricks: How to Get $250,000 of Advertising for $10,000

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These are not the prices I’m looking for. (Photo: hellochris)

Let us never negotiate out of fear. But let us never fear to negotiate.
-John F. Kennedy

In December 2008, well-known marketing consultant John Jantsch asked me what my small business predictions were for 2009. This was my answer:

2009 will be the year for small businesses to get advertising at 70-90% off. Recessions mean budget cuts for larger corporations, which means advertising cancellations, just as in the “dot-com depression” of 2001 and 2002. There will be fire sales on remnant advertising, whether print, TV, radio, or online. In 2002, I bought $250,000+ of radio advertising for $10,000 because a big pharma advertiser pulled out a week before the ads were to go live. If you play your cards right, you can cut your CPA (cost-per-acquisition) in half.

The following sample dialogue demonstrates exactly how someone can buy $250,000+ of media for $10,000, and how you can reap the rewards of an advertising collapse.

If you’d rather acquire profitable customers for pennies instead of dollars, this article is for you…

Jedi Minds Tricks: How to Get $250,000 of Advertising for $10,000

Life is not fair. For those who understand the few rules that matter in negotiation, this is good news—it’s possible to get much more than others expect to offer you.

Negotiating is, for most, an uncomfortable attempt at impromptu haggling. For the experienced “dealmaker”, a more useful term, it is a planned sequence of predictable objections and responses that can be orchestrated to produce the desired outcome. It’s like planning three or four moves ahead in chess, forcing an opponent to put themselves in check-mate.

Some of the most effective strategies and set-ups are illustrated in the following sample dialogue for a print advertisement. The dealmaker (D) in question has planned the entire sequence and all questions in advance.

Note: Even if you don’t practice all of these common gambits, some of which can end up being games of mutual make-believe, it is important to recognize them or you cannot counter them.

To preserve the flow of the dialogue and its usefulness as a template, the principles are put in parentheses ( ) when used and then explained at the end of the article. I have used three of them alone (1, 5, and 7) to get more than $250,000 of radio advertising on 150+ stations for $10,000, $20,000 full-page print advertisements for less than $4,000, and 50% off of car purchases, among others.

Negotiating is predictable and learnable. Simple phrases and questions can be used over and over again to reap huge dividends.

Practice small, practice often, and view it as a game—it’s a game worth winning.

First introductory call:

D: “Hi, may I speak with someone about advertising in your magazine?” (Transfer to Cheryl) “Hi, Cheryl, my name is _______ and I’m Director of Marketing at ________ Company. We’re considering advertising with you but are also looking at [competing magazine A] and [competing magazine B]. When does the next issue close and go to print? Can you please e-mail me your rate card and current discounts?”

June 20th at 3:30pm (1):

D: “Hi, Cheryl, we’re deciding today which magazine we’re going with. You’re competing against [competing magazines] and we can only choose one. We’re looking to do a full 12-month roll-out but are doing a one- or two-month test first. What is the best price you can offer on a full-page four-color ad?” (2)

Cheryl: “Hmmm… well, I suppose we could do $2,500.”

D: “$2,500?!! Yikes…” (3)
(or “$2,500?!! Wow. Based on the other mags, I was expecting a lot less…”)

30 seconds of excruciating silence later:

Cheryl: “Uh…It’s possible we could go as low as $2,300, but I’d have to speak with my boss.”

D: “What else could you add to that? Could we write a product review, add in a 1/6th-page ad, a classified? Perhaps we could get a one-time mailing to your subscriber mailing list? It’s important that we make this first time a homerun.” (4)

Cheryl: “I’d have to check.”

D: “OK, well I need to get on the phone with my board [partner, supervisor, etc.] in 15 minutes. I’ll tell you now that $2,300 isn’t very competitive. Can you call me in ten after speaking with your boss?” (5)

10 minutes later:

Cheryl: “We can do $1,850 but just this once. I can also give you a product review of 300 words and a classified.”

D: “Is that really the best you can do?” (2)

Cheryl: “I think so.”

D: “I have authorization right now to pay $1,200 (6), but I’d need to go through my [superior of some type] otherwise. Can you ask your boss now if we can do that?”

Two minutes later:

Cheryl: “She said that we can do $1,500.”

D: “I have to speak with my [superior]. I’ll call you back in five minutes.”

Five minutes later:

D: “Hi, Cheryl. Here’s the situation. I have them on the other line and they want to decide on one magazine now. I want to go with you guys but you’re higher than the other two competitors. We’re not that far apart here. If we can just split the difference and do $1,350, I can fax you the insertion order now and have a check FedEx’d overnight to arrive at your desk tomorrow morning. I have 20 minutes before FedEx closes. Can we split the difference to $1,350 and I’ll get the check off? Let’s just do it and call it a day.”

Cheryl: (after a pause and speaking with someone in the office) “OK, $1,350 it is. Where should I send the insertion order?”

That is how a hypothetical dealmaker gets a $5,000 package for $1,350. How $5,000? In addition to the main full-page ad, he or she secured a 1/2-page product review worth at least $1,500 and a classified ad worth $500, bringing the total package value to $5,000, purchased at 73% off.

Here are the principles in order used:

Principle 1: Negotiate just prior to the other side’s deadlines. If purchasing advertising, find out when the space or air time must be filled and negotiate last minute. No one will sell you hard goods such tractors for $5 to get rid of them, but this happens all the time with ad space, as it is worth $0 if not filled. It expires like food products on a shelf. The same approach can be used for cars if you find out when new models come in or when sales quotas are calculated. In this dialogue, assuming the deadline for ad submission is June 30th and the rate card for a full-page ad is $3,000, the follow-up call is around June 20th at around 3:30pm your time (just prior to FedEx drop-off deadlines).

Principle 2: Make them negotiate against themselves. Give them multiple chances to lower their own price before making an offering yourself. People will often offer less than you were planning to ask for.

Principle 3: Use a “flinch” whenever someone mentions their first discounted offer. Recoil in shock and then be silent. DO NOT speak, even if the other side says nothing for minutes (I often check e-mail during this battle of wills). The tension is uncomfortable, and the salesperson usually fills this void with a concession.

Principle 4: Increase value while lowering price. Ask for bonuses as you negotiate on the original dollar amount. Most people across the negotiating table let these slip while too focused on negotiating a single price. Our goal is to get the most advertising per dollar, so add to the package as you cut price. This also gives you items to later concede or remove for further discounts.

Principle 5: Never be the ultimate decision maker. Having partners or superiors, often imagined, with veto power allows you to negotiate hard and make impossible demands without being viewed as a bastard and damaging the ongoing relationship with the other side. This is the same reason business people perfectly capable of negotiating their own deals use lawyers as go-betweens: to blame points of disagreement on “legal” and create a non-hostile bargaining environment where egos don’t collide.

Principle 6: Use intelligent “bracketing.”
If the list price is $2,000 and I want to pay $1,500, for example, I’ll offer $1,000, creating a $500 buffer on either side of the target price. The other side will offer $1,750, I’ll compromise at $1,250, and then we’ll settle at $1,500. “Let’s just split the difference” creates the illusion that they are getting a concession from us when, in fact, it was all pre-planned.

Principle 7: Practice using the “firm offer.” This is when, rather than asking the non-committal “Can you do $___?” you make an if-then commitment such as “If you can do $____, we will pay you now.” The latter is an offer of payment rather than idle haggling. To circumvent this entire phone conversation, it is possible to use a pre-emptive firm offer and send an e-mail stating that you are prepared to immediately pre-purchase one ad—whether full-page, half-page, or 1/3rd-page; whichever they prefer—at 30% or 40% of rate card. To make this “firm offer” even harder to resist, FedEx them three signed checks for 30% of each of those ad sizes and tell them to cash one, whichever preferred, or rip them all up.

Negotiate once per item (whether a one-page ad or a 12-month radio campaign) and do it hard.

Once a price is agreed upon, do not renegotiate the price again. Be tough as hell but be fair. A deal is a deal.

Here are a few other tips for purchasing media:

1. If dealing with national magazines, consider using a print or “remnant ad” buying agency such as Manhattan Media or Novus Media that specializes in negotiating discounted pricing of up to 90% off rate card. Feel free to negotiate still lower using them as a go-between.

2. Ask for a 15% “mail-order discount” or “first-time advertiser discount”.

3. Ask for a discount for paying upfront vs. net-30 or ask for the standard 2% discount for paying net-10 instead of net-30. This can often be negotiated with their accounting after settling on the ad price with a sales rep.

4. Once you have strong cash-flow and know ads in a certain magazine are consistently profitable, offer to pre-pay 3-12 issues at a time for an additional 30-40% off. Don’t ask—make a firm offer to show that it’s not window shopping.

Posted on: February 19, 2009.

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128 comments on “Jedi Mind Tricks: How to Get $250,000 of Advertising for $10,000

  1. This is priceless! I am so self-conscious when I try to negotiate (like I’m being cheeky or cheap). It is useful to have it spelled out as a process or a formula in this way. It makes it much more concrete, which I am sure will alleviate some of my reticence.

    Thanks!

    Adam

    Like

  2. This is my first comment ever to you Tim.

    Your book and blog posts have caused a positive change in mindset for me. Because of your teachings, I now work smarter instead of harder.

    I am an entrepreneur and still work ridiculous hours even after reading your literature; however, my quality of life has significantly improved. I now spend the same amount of hours working each day, but focus on the important aspects of my company so that we have the highest chance of succeeding possible.

    I am going to use these tips on negotiation above this week to optimize our advertising campaign.

    I hope to cross paths some day

    – Jun Loayza

    Like

  3. On a different scale, this sort of negotiating happens on a daily basis in most Asian markets and stores. I remember my mum purchasing fish, vegetables and other daily necessities in a street side market using exactly these techniques.

    There are cultural aspects to consider – for example, most Chinese shopkeepers have a belief that the first person who walks into their store when they open _has_ to make a purchase in order for the rest of the day to be prosperous. I once got a $200 pair of shoes for about $80 in Singapore because I was the first one who walked in when he opened his doors.

    Like

  4. Wow Tim, thanks. I guess it happens so naturally if you know what you’re doing.
    Many of these tactics I haven’t considered before, like waiting for a deadline for example, sounds like a very good one and easy to implement.

    Thanks for sharing. Great Post!

    p.s. I guess great minds do think alike, I just released a free report on how to get $3,500 worth of Advanced Marketing Education for $5. Smaller numbers but very similar idea :)

    Like

  5. Thank you for everything Tim.

    We’ve been using your book as a bible for our business since we first borrowed it at the library (After reading it essentially overnight we had our own copy on its way from Amazon). The economy downturn has had major effects on our pocket book, but your book has saved us from otherwise going belly-up.

    I’ve been using your negotiation techniques as outlined in your book and PDF for the last year (for those wondering, essentially the same info as above). Saved us thousands of dollars. In one case negotiated a full page ad listed as $24,000 for $6,300. And this is just one example!

    I’ve been recommending your book to anyone who will listen (and not dismiss it as some sort of scam). So far, everyone who has read it has noted major improvements in one area or other of their business which in turn meant major improvements in their life.

    Cheers from Canada,

    Eric

    Like

  6. What happens when you are on the wrong end of that deal?

    This is great practice for those needing exposure in major media outlets. Smaller companies cannot fork over the capital needed to get full blown coverage. Getting to them before deadline is key and may be something you need to do a month or 2 in advance to begin to leverage yourself.

    Great stuff Tim.

    Like

  7. Fantastic article.

    I am not a very good negotiator so these little hints will hopefully help make me a more savy negotiator.

    My wife and I own a small business and are working hard at making it not just a “mom and pop” but something much bigger.

    Thank you very much for your advice and I will look forward to future articles.

    Dave

    Liked by 1 person

  8. I have to agree with @Jun’s previous comment.

    Tim, your work has had a dramatic effect on the way I think about my work/life balance and I can’t thank you enough.

    Everyone around me has noticed a change in the way I handle everyday situations, and my new found ability to say “No” has given me so much time to do more important things instead of just being “busy”.

    Thanks again!

    Like

  9. These are the very steps lined out in The Secrets of Power Negotiating. I got that book a while back. As a matter of fact I was reading it at the same time as 4 hour work week. hahah.

    Great tactics. Thanks for another useful article Tim.

    Like

  10. I just came back from a trip to all around turkey a few months ago and I’ll tell you a 3 week trip there will turn you into a hard negotiator. i’ve always loved debating, negotiating so this stuff is fun for me. im actually going to china for a month in a few weeks and looking forward to doing some great negotiating there as well.

    don’t suppose you’re going to be in china during march are you tim? by the way i still have that funny pic of you and rohit bhargava at the web 2.0 expo, the one where you were holding his book…ya i’m the guy who took the photo…remember?

    hope all is well with your travels/endeavors/history channel stuff.

    hope we can meet again soon.

    jacob

    Like

  11. Great advice, it definitely reflects a lot of experience. What I’m wondering about is the ethics of principle 5, not being the ultimate decision maker, particularly when it’s a one person show. What’s the bright line in the ethics of negotiation?

    Liked by 1 person

  12. Perfect timing!! I am firm believer in things coming into a persons life at the right moments and this is a perfect example. This is exactly what I needed today!

    I am going to be in contact with a vendor soon about purchasing some of their product. I am going to try my hardest to get them to comp the product for me, but at the very least get it at substantially discounted price. This article gives me some great tips on how to be firm and still fair to get what I want.

    Thanks Tim!

    Now I am off to commit this to memory.

    Like

  13. Great walkthrough Tim. I find the example really puts me in the shoes of the dealmaker. I find I get a bit nervous negotiating large deals, so I try to practice at farmer’s markets. It has really helped me with my negotiating. Keep up the good work!

    Cheers,

    Jeremiah

    Like

  14. Great post Tim!

    Another thing that my employers have done is negotiated a deal for in-kind sponsorship, where we receive advertising for our business in exchange for promoting the services of the PR company. Advertising costs are zero, but the benefit is great for the time and effort invested. This is also known as a value transaction, whereby people arrange a deal where both parties receive value but not necessarily in the form of money.

    Like

  15. This might work for larger magazines that belong to big publishing companies that can sustain temporary losses on advertising.

    Unfortunately if your product is in a niche market, and you prefer to advertise in smaller, independent magazines that tightly (effectively) target that niche, attempting to push them down to 75 percent below rate will, in pretty quick order, put those magazines under. So you’ve just lost an advertising venue that directly targets your key market, and may have to transfer to another one that takes a broader stroke approach (not as effective).

    This is a short term strategy that seems likely, in some cases, to result in a lose-lose situation.

    ###

    From Tim: Mel, first, thank you for the comment, but please don’t attack other people on the blog. Not cool, so I deleted it. Second, media sellers will go as low as they can afford while making an acceptable profit. No one is forcing them to sell it at a 75% discount, and — as someone who has also sold media — I can tell you that the hard negotiating happens on both sides. Not only that, but that the media sellers themselves admit that no one who knows what they’re doing pays “rate card”.

    Best,

    Tim

    Like

    • @Mel and All,

      Mel, first, thank you for the comment, but please don’t attack other people on the blog. Not cool, so I deleted it. Second, media sellers will go as low as they can afford while making an acceptable profit. No one is forcing them to sell it at a 75% discount, and — as someone who has also sold media — I can tell you that the hard negotiating happens on both sides. Not only that, but that the media sellers themselves admit that no one who knows what they’re doing pays “rate card”.

      All of the magazines I negotiated hardest with from 2000-2004 are still in existence.

      Best,

      Tim

      Like

    • I have to say that there is no price that is too low the day before the magazine goes to print, it’s the same with flight tickets, if a seat isn’t sold, it’s better to sell it for £1 above cost than to not sell it (as long as you don’t risk damaging your brand).
      for media sellers, if they’ve not got an ad to put there, they get nothing for that space, so 75% off is still a lot more than getting nothing to fill the space!
      What *do* they fill the space with if they don’t sell it anyway?

      Like

  16. Great post Tim. I can definitely use this post specifically in my advertising efforts for The GMAT Coach. Our next session is this weekend in Atlanta, followed by Seattle on the 27th and then back to Atlanta March 6th.

    If you ever want to see if you can ace the GMAT in > 3 days using 80/20 principles, shoot me an email (Amy has it)

    Also, LOVED the gift you sent. The Planet Earth DVD’s were a great choice. They are such a joy to watch. Thanks so much.

    Cheers,

    Lee Burrell

    Like

  17. Tim, you bastard. I’m in sales and am well aware of these tactics from the seasoned buyers. They have names like “30% Jim” and “50% Frank.” Now you’ve let the cat out of the bag for everyone!

    I will say that one tactic everyone should learn and practice is silence. The uninitiated (which is 99% of the population) can not tolerate silence. They will start yapping every time. Try it the next time you are on the phone with a friend… or anyone. Just see how long you can sit quiet as the other person gets nervous and does all the talking.

    By the way, turnabout is fair play. How about a list countering these tactics!?!

    -Jeff

    Like

  18. Hi Tim,

    This is my first post as well! I will definitely be trying to use this tactic in the near future. Hopefully the magazines won’t pick up that we’re all using the same tactics on them! Can you share with us how you got your car at 50%?

    Thanks!

    Love,

    Diana

    Like