7 Steps To Effective Negotiations

So much of leadership, requires the ability to negotiate, effectively, and wisely, yet, so few individuals, who, either ascend to, are elected, and/ or selected, to these positions, appear prepared to do so, in the most professional manner. Only when a leader realizes, how important, it is, to proceed, consistently, with the ability to pursue the finest, professionally - developed, negotiations, will he make the greatest impact, for the better, for the organization, he represents, and the stakeholders, he serves. With that in mind, this article will attempt to briefly identify, consider, review and discuss, 7 steps towards effective negotiations, including how important, the preparation of a relevant, Request for Proposal, or RFP, is, to making a difference, for the better.

1. Know the purpose: Don't jump into any negotiation, unless/ until, you first fully understand and appreciate the purpose, you wish to achieve, and consider your priorities, and focus! One must be able, to thoroughly explain the needs, to the other side, if he hopes to achieve his objectives, but, that means, first understanding them, himself! Once this is understood, it should become the preliminary focus, of the RFP, which you submit, as the first - step, in a professional negotiating process!

2. Clarify position/ needs: Effectively negotiating, never should include, distorting, and/ or lying about what you organization offers, to the other negotiator, because, unless you earn the trust, you'll never achieve, in the long - run, the proper objectives! The clearer, you explain, what you need, and the better you identify the difference between needs, and wishes, the better your results! Seek a win - win scenario, if you hope to achieve what you seek!

3. Useful budgeting: Rather than creating a budget, after - the - fact, hoping to squeeze, a square - peg, into  round - hole, one should create a realistic, useful budget, which requires, under - estimating revenues, and over - stating expenditures. Include every foreseeable expense, from marketing, and attracting attendees, to venue expenses, including Food and Beverage, etc, to transportation, etc, costs, and negotiate, based on a realistic understanding, of what you can afford, and clearly, explain that, to the other negotiator. This should be the preliminary basis of your RFP.

4. Open and honest; empathetic: Study what the other side needs, and seeks, and seek to create a meeting - of - the - minds, where both sides, work together, to share savings, and proceed, effectively! The combination of genuine empathy, as well as integrity, are essential components, in this process!

5. Priorities vs Wish - list: Identify, understand, and differentiate between the priorities, and your wish - list. While there are some items, which might be sacrificed, in a specific negotiation, these must not be any of the priorities!

6. Effective negotiating: Think - outside - the - box! Discuss approaches, which will benefit both sides, so everyone considers this a win! That is the key to effective negotiating!

7. Close the deal: Move the process, along, towards a successful conclusion. This means, showing how this make sense, to both sides, and after, meaningfully, negotiating, for over 4 decades, it means closing, the deal.I like to use, something like this expression, In light of how this benefits both of us, and makes sense, for us to proceed, doesn't it make sense, to come to a meeting - of - the - minds, as soon as possible, and proceed forward? Doesn't it?

Whether you are negotiating for an event, office space, or anything else, a real leader must do so, as professionally, as possible! Will you have the patience, understanding, and persistence, to do so?

MY LATEST ACTIVITIES

Haven't Blogged here for a while, so I wanted to let you know what I've been up to. I have now had over 36,000 views of my over 855 Ezine Articles. It's pretty exciting! I've also done some Blogging on local issues on the Port Washington Patch.

Perhaps the most exciting two pieces of news both occurred within the past month:

1) Started a new corporation. The company is: PLAN2LEAD, LLC, and has a trademark pending. Take a look at the website at: www.plan2lead.net. The concept of PLAN2LEAD is to give the best consultations in the fields of leadership, training, management, negotiations, and event planning, as well as assist organizations in the important task of strategic planning. I will also be continuing my popular seminars on attitude adjustment, mental attitude, positive thinking, Getting a Yes, etc.

2) My novel, THE FAMILY BUSINESS was published last week on Kindle ebooks. You can download it on your Kindle, your computer, or just about any other tablet. Just use the free Kindle App. In search, just type in: Richard Brody The Family Business.

Keep following. Some exciting things coming up in the near future.

Effective Hotel Negotiating Means Doing Things Early

Many inexperienced individuals, when dealing with hotels and their banquet/ food and beverage department, falsely believe that there is no urgency to agreeing to terms. In the last three decades, I've witnessed how costly this can be. I have observed these individuals request information, and fail to assure that their request was followed through on in a timely manner. I have witnessed these individuals adopt the attitude that they had a terrific relationship with the Event Manager assigned to them, only to end up either being disappointed by that individual, or even more often, that individual "moving on" from their position. Many positions in hotel's food and beverage and event management departments are often transitional, and the reason that so many of these individuals are so young and energetic when you meet them, is that they are "auditioning" and getting experience for a better opportunity. While this is often the nature of the industry, and you have no control over that aspect, experienced negotiators realize the importance of negotiating thoroughly, getting the best deal possible on a "win-win" basis, and never assuming anything. Everything must be in writing, and you need to save all correspondence, both written as well as digital/ electronic. It is therefore essential that you review all confirmations and commitments carefully and thoroughly, and make sure that the terms, etc., are all "crystal clear" to anyone looking at the correspondence.

Failure to do the above steps puts an organization holding in event at the "mercy" of the hotel - - never a smart position to be placed in. I have often "cringed" while listening to inexperienced, naive individuals say that they didn't need that, or that they feared it might offend, as their explanation of why they didn't follow the proper and effective protocol. Unfortunately, because of the fact that so many of an organization's leaders are inadequately trained, they "innocently" make extremely costly errors in judgment. These individuals should come to realize that it is often difficult enough to get everything you expect from a hotel, even if you take every precaution, and that if you don't, the results are often far less than ideal. These individuals should realize that hotels are businesses, and while they will honor the terms of their contracts (in almost all cases), failure to "lock things up" properly, getting the "I's" dotted and the "T's" crossed, can give the hotel an undesirable advantage.

It is also important to lock up details of a future event, especially in times when the hotel industry is experiencing less than "ideal" circumstances. Negotiators have to realize that the Food and Beverage division of a hotel traditionally experiences the second greatest profitability for the property (the bar is first, of course), and thus, an experienced negotiator can discuss various methods that might be used to reduce the hotels costs without negatively impacting event quality, and thus give the hotel some "wiggle room" to offer better pricing. It is important to realize that most things regarding food and beverage are often "flexible" and "negotiable," and if approached with a win- win, non-adversarial negotiating style, an experienced negotiator can secure "more bang for the buck."

I urge organizations and their leaders to avoid what appears to often be their natural tendencies to procrastinate and delay. Doing so can be a financially costly behavior!

Making A Hotel Group Booking?

In the last three decades, I have observed countless organizations that cost themselves, financially as well as in time and energy, by arranging groups with hotels in an amateurish, rather than professional manner. Organizations that have set up a professionally designed approach have better fulfilled the needs of the group, the organization, and the attendees to the meeting, event or conference. Organizations should set up a procedure for contacting hotels with their group that they use whenever they shall be using twenty or more rooms per night. This is even more true when the meeting will also include Food and Beverage requirements. The following are some of the steps that should always be included:

(1) It is essential for the group organizer or coordinator to fully understand the group's needs. There must be a realistic estimate of guest rooms required, as well as any meeting rooms, food and beverage, etc.

(2) The group organizer must prepare a detailed budget, and must fully understand all costs involved. These costs include any needed complimentary rooms, guest room rates including all taxes, service charges and fees, meeting room rental (if applicable). and food and beverage expense (including taxes and mandatory service charges).

(3) A professionally prepared, detailed RFP (Request for Proposal) must be utilized, and must be sent simultaneously to multiple properties that might meet your needs. In the RFP, all needed hotel concessions, group rates offered, food and beverage concerns, and special needs and requests must be requested. The RFP should be accompanied by a cover letter with a brief overview of the organization and the history of this event, if any. In this cover letter, each hotel should be informed that the RFP is being submitted to multiple hotel properties, for competitive bid? The letter should also clearly list a cutoff date for return of the RFP for review. Today, much of the Request for Proposal procedure has been dramatically simplified, as many properties offer online requests.

(4) Much has to do with who is footing the bill for this meeting. Is the full cost being underwritten by the organization? Is the full cost being underwritten by attendees? Are the costs being shared in some manner?

(5) From a budgetary standpoint, is the intent to make money on the event?

(6) If the guest rooms are being paid for by attendees, what is the point where price becomes a major factor, in terms of attracting attendance?

(7) How does the organization pay for the master billing? Is there a need to establish credit? If there is, the organization should be prepared to submit a minimum of three references to establish the needed credit, and these references must be hotel properties that the organization has previously established credit with.

(8) What are the full costs that the organization will incur, per attendee, as well as in total? Is this cost justified in terms of the value of the event?

(9) A procedure must be in place prior to receiving the proposals back. This procedure must be how the proposals will be reviewed, by whom, what checklists to use.

(10) The organization must create a set of internal priorities, so that the competitive proposals can be compared, reviewed and evaluated. Are there any particular issues that might be "deal breakers?"

These ten items are not nearly all the factors that come into consideration in securing a group booking that will be optimum. However, they are a good beginning, and organizations that do not follow a procedure similar to the above, generally either overpay, don't get what's needed, sign a bad contract, etc. In today's competitive market, organizations should carefully review clauses regarding attrition, guarantees, givebacks, etc. Organizations need to have a thorough understanding of factors that impact their group bookings process, including optimizing hotel negotiations, food and beverage negotiations, needed hotel concessions, and letting several hotels compete for your business. If an organization utilizes the steps listed above, in addition to having an understanding of these other relevant issues just mentioned, the organization will get far more "bang for their buck."

Why Using RFP's Are So Important To Successful Negotiations

Having negotiated hundreds of contracts over the last three decades, I find it extremely disconcerting when I observe an organization negotiate anything without using a Request for Proposal (RFP) prototype. While RFP's are helpful in all negotiations, any negotiations for conferences and/or conventions with hotels that do not utilize RFP's invariably eventually having troubling outcomes.

Request for Proposals are important for many reasons. However, it is important that one first understand what an RFP actually is. An RFP is a specific type of inquiry that specifies in detail what the submitting organization's needs are, and specifically asks the responder how they might address this concern. For the sake of understanding during this article, we will base this negotiation on a hotel negotiation. A properly formed RFP is a thoroughly researched and thought out document, where the organization determines its needs in as much detail as possible. When this is used, there is far less confusion "down the road." Some of the reasons RFP's are so important include:

(1) Organizations should use the RFP as a way of creating a competition between various alternative properties and/ or locales. It is important that the cover letter for the RFP let each responder know when an answer is needed by, and that the request is being submitted to multiple facilities.

(2) What types of items might end up being issues? For example, does the hotel chaOrgarge for parking? Would the hotel make some sort of accomodation regarding this?

(3) Is there a charge for internet use? What concession might be made?

(4) In terms of audio-visual needs, which often become extremely important, what might the property be willing to do in terms of accommodations and concessions? What might be included for free? What kind of minimum guaranteed discount might be offered?

(5)Organizations who will be using guest rooms at a hotel should request complimentary meeting space.

(6) What kind of concessions might be offered in terms of Food and Beverage pricing? This is both one of the biggest profit centers for the hotel, as one of the largest expenses for the organization and its conference.

(7) What is the hotel's policy regarding special meals or dietary requirements? What is the cost for this, if any?

(8) What decorations, etc., might the hotel offer on a complimentary basis to the organization?

(9) What upgrades, frees, givebacks might the hotel offer regarding guest rooms? What is the best room rates offered, and for which categories of rooms?

(10) What is the best the hotel will do regarding flexibility regarding attrition rate?

These ten items are certainly nowhere near the full needs of an RFP. I have simply used these items to demonstrate the types of things that should be included in an RFP. The answers to an RFP should then because part of the addendum to the hotel contract.

Use of Request for Proposal procedures are best handled by expert negotiators. Your organization should select an excellent negotiator, and permit that individual to guide the entire process. The negotiator should have major input from the beginning, so as not to hamper his ability to best negotiate in the organization's behalf.

Meeting, Conference and Convention Planners Should "Lock In" Now!

The meeting, conference and convention business is an historically cyclical one. In certain economic conditions, the hotels have the upper hand, while at other times, customers are in a more advantageous position.

As we all know, the American economy has been weak for the last couple of years. Whether we call it a recession, or a near recession, many Americans have suffered financially, as have many businesses. This period has been a troubling one for many hotels, with occupancy rates for their rooms, and attendance rates for meetings, conferences and conventions, at lower levels, and the Food and Beverage departments revenues having dropped. Since Food and Beverage represents the second largest profit center for a hotel (only Bar is higher), most well run hotels have adapted, and granted more concessions and been more willing to be flexible than at most other times.

Having worked in this area for three decades, I understand the delicate balance between pushing too much and pushing too little. If a customer is in a position to be in a better negotiating position, he should do so when he can.

Most projections are indicating that the hotel industry is projecting improvement in the foreseeable future. Recent articles and industry conferences are suggesting that group rates for rooms will be edging up, and that undoubtedly will be followed by Food and Beverage increases as well.

Therefore, those planning meetings, conferences and conventions anytime in the next four years should lock in as much as possible now. Customers should fully negotiate as much detail for their Food and Beverage packages as they can, and ask nicely for concessions. Those organizations that do not act soon will lose out on a terrific opportunity, and will be costing their organizations and their attendees money.

Let Professional Negotiators Do Your Negotiating

Having been directly responsible for hundreds of negotiations in several fields over the last three decades, I have come to realize that negotiations invariably go best when handled by professionals. Many individuals portray themselves as negotiations savvy, but very few really have the skills, experience and expertise required, and even fewer consistently obtain best possible results.

If your organization has access to someone with these rare skills, I strongly advise turning your negotiations over to that individual, and leaving him to do his thing. Leadership of the organizations should clearly explain what they are trying to obtain via the negotiations, as well as their priorities. Negotiators must also be given all necessary information and background regarding financially relevant issues.

When organizations follow these rules, they obtain optimum results. However, all too often, there are individuals within the leadership of some organizations who believe that they know best, and get involved, often inadvertently sabotaging the negotiation's effectiveness. Negotiations rarely work when one side speaks through various parties, because it generally sends confusing and negative signals to the opposite side. All sides to a negotiation should enter a negotiation with the intent of getting the best possible deal for his side, while understanding the needs of the opposite side. If a negotiator either asks too much, or too little, the negotiation is not optimum!

When negotiations are win- win, both sides walk away satisfied, feeling victorious. They will then tend to work together in a far more relaxed, comfortable, amiable manner, than if there was an adversarial feeling to the negotiation.

Negotiation is a combination of many factors. It begins with a negotiator doing his homework, and fully understanding the needs, priorities, and limitations of both sides. Negotiators also need people skills, to effectively communicate with the other side, and make them feel comfortable. Negotiators must always confirm and reconfirm all details, so that there is no confusion, and there is a written record of all details. Effective negotiators neither over-ask, or under-ask, and always strive to make the other side feel like their idea is really the other sides. If one party to a negotiation cannot "win," or feel satisfied with the agreement, it will invariably break down, either at the negotiating stage, or when it comes to the implementation.

An organization's leadership training should include a section on the basics of negotiations, but should emphasize that negotiating is a highly specialized endeavor. An effective, professional negotiator can finalize a good negotiation in a far shorter period, with far better results, than most other individuals. Leaders do not have to be specialized negotiators, but must understand what the objectives and realities are. Negotiators get it done!

Win- Win Negotiating Is The Best Way!

Many untrained individuals fail to realize that negotiations is a "people and relations" technique, and not a "force the other person" concept. People who enter into a negotiation simply wanting to get the most he can, without considering the needs of the other side, almost never gets an optimum result. Trained negotiators realize that it takes "give and take," and learning the needs of the other side.

An effective negotiator always does his homework about both the overall industry that the negotiation is related to, as well as the specific needs of the party that he is having his discussion with. There is an extremely delicate balance in negotiations, as well. Ask too little and one may be giving up important concessions, which may cost his side lots of money. On the other hand, ask too much, and there are a few possible scenarios. One possibility is that your "opponent" may become frustrated, or feel that you are not negotiating in good faith, or that you cannot possibly be pleased or satisfied, or that if he accepts your terms, it is not profitable and/ or worthwhile to his side. In that scenario, negotiations may break down, or be discontinued completely. Another possibility is that the other side, because of economic pressures or miscalculation, gives in to your "unworkable demands." While the latter may appear great to the negotiating novice, this second scenario is often disastrous because when "push comes to shove," the other side realizes it must "cut corners," and you end up with an inferior result.

In three decades of negotiating, I have found that the most effective technique is to be as honest as possible with your opponent from the beginning of the negotiation. Do not "spring" something on them! An effective negotiator always knows as much as possible about what the other side is capable of doing, what the margins may be, in which areas they may be more flexible, etc. An effective negotiator also realizes that, while nearly everything is negotiable, certain items are far more negotiable than others.

Effective negotiators also understand that the opposition also needs to "win," or the negotiation will not work, in the long run. An understanding of areas that may save the other side money, which might be able to be passed along, is an essential ingredient.

Organizations that want to get the best results in their efforts enter a negotiation by setting their priorities. Which of the items are the most important? What parts might be used as trade offs, if necessary? An organization must have its negotiator enter the process understanding what the budget for the needed service is, and permit a professional negotiator to have a certain amount of flexibility and leeway within preset parameters.

Win-win negotiations are the way to go! When both sides walk away satisfied, feeling they received a "good deal" while getting what they needed, and both sides feel they have benefited, the process has the best results. Negotiating should always be done by fewer, not more individuals. When non-professionals get involved in a negotiation, they often mess up the works.

The Art&Science of Hotel Negotiations

All too often, organizations and corporations end up paying far more than they need to because they do not follow the basic rules of hotel negotiations:
(1) Always use a comprehensive Request for Proposal (RFP). This RFP should include ALL anticipated needs of the group, including approximate number of guest rooms, meeting room utilization, Food & Beverage requirements and budget, Audio Visual needs, complimentary needs, etc.
(2) Send the RFP to numerous hotels in area that might be able to meet your needs. Let the hotels know that you have done this. (Competition is good for you)
(3) Ask for either discounts to F&B list price if event is in same calendar year, or lowest of a discounted price in this versus subsequent years.
(4) Let the hotels know that you are on a relatively tight budget, and can only pay "x" for your F&B requirements. NEGOTIATE whenever possible!
(5) Ask if F&B department would be willing to work with you to have menus that both fit your needs, as well as your financial requirements.
(6) Ask for some accomodation re Audio Visual.
(7) Ask for waiving of Meeting Room rental charges if you either have a certain number of guest rooms or F&B revenue.
(8) NEVER lie to the hotel. In today's world, they know what you've done in the past, and how your group was to work with.
(9) Book as far in advance as possible
(10) Be flexible on dates, if possible
(11) Remember to structure all deals/ agreements as a "win-win" situation for both you and the hotel
(12) Let the hotel know of anything complimentary you might require
(13) Let hotel know your priorities
(14) Get everything in writing, and make the RFP an addendum to your hotel contract.
(15) Get give-back dates, where you can return a certain percentage of rooms without penalty (aka attrition)
(16) Don't be greedy, but be firm in what you need, and don't give back important needs
(17) Have an "expert" either within your organization or outside your group oversee all arrangements from the onset.
(18) REMEMBER that once you sign the contract, there is NO reason for hotel to offer anything additional.
(19) Depending on your group size and revenue, certain concessions available might include: % giveback to master bill; welcome drinks; welcome party; complimentary internet; complimentary meal(s); reduced or complimentary health club/spa; complimentary guest rooms, etc.
(20) THINK AHEAD- Consider any and all possibilities and the ramifications!

This is just the beginning of good negotiations. Doing this properly, and proper and thorough follow-up, in advance, will make life much easier once the event occurs.

FOLLOW ME ON TWITTER: @rgbrody (www.twitter.com/rgbrody)
CONSULTING WEBSITE: http://tinyurl.com/rgbcons

NEGOTIATING WITH HOTELS

When one wants to arrange a meeting, conference or convention at a specific location, it is important to follow certain basic techniques:
(1) Utilize a professionally prepared RFP and submit to several properties, and let the properties know that they are competing.
(2) Make sure that you approach this negotiation from a "win-win" point of view. Know both your needs, and what the hotel's requirements are. Negotiate your entire package together-- i.e. Room rate, Food&Beverage,Meetings&Meeting Rooms;AV;Comps;Throw-ins, etc.
(3)Know the restrictions of your budget, and let the hotels know that there are financial limits.
(4)If you need something other than what they are showing, ask the property if they can accomodate you.
(5)Never lie to a hotel. Hotels know the history of your group, so if you aren't frank, you'll lose!
(6)Understand timing. When is your meeting? Are you at all flexible?
(7)Ask the hotel what they would recommend that would help both the property and you.

These are just a few of the very basic ABC's of Hotel Negotiations. If you want or need more information, or if you feel a Professional & Experienced Conference & Convention Planner might be helpful (most of the time a professional can save you time, money. and your sanity!), then go to my website at: www.rgbconsults.weebly.com, or e-mail me at rgbrody@aol.com.