The Drift from Upstream

The Negotiation That Matters.

by Doug Weaver on April 4, 2012 at 12:12PM

This week I was forwarded a promotional e-mail from a sales rep at Undertone who offers his client the “Standout Brand Guarantee” — a promise that if a pre-discussed brand metric is not met on a campaign then Undertone will hand back up to $50,000.  Last year we heard a similar pledge from Meredith Corporation:  Its “Engagement Dividend” would use Nielsen Homescan data to show that ad campaigns run across its magazine properties would actually lift product sales.  And then there’s Universal McCann, the agency that’s leading the way in negotiating pay-for-performance compensation deals with its clients:  UM actually wants to get paid based on the effect of its work in driving agreed upon measurement for clients – rather than fees, commissions or both.  Whether any of these three actions ends up being the harbinger for a new model, I’m not sure:  there is bound to be pushback and hairsplitting around all of them.  But they are all tied to a critical sales lesson.

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Historically terms like pay-for-performance and guarantee have been non-starters for digital sales organizations, it’s usually been because some brain-dead click-based metric was being imposed on them by a disingenuous buyer.   It wasn’t about having skin in the game… it was all about getting skinned.   But while sales leaders and reps have bitched about lowest-common denominator metrics and payment, few have offered any alternatives.  In each scenario the seller (Undertone, Meredith, UM – it is ‘selling’ its services to marketers) is taking charge of the conversation about ROI very early in the process.   By agreeing to own an outcome, they are putting themselves in position to decide what that outcome should be and how it will be measured.  I think you’ll see more companies taking steps like this in the immediate future, if only because the alternatives – getting paid in bulk for page views/impressions and arguing over click rates – are so unpalatable.

But to localize the idea even more, I encourage every digital sales person to begin proactively negotiating the nature and measurement of campaign outcomes at the very earliest stages of the sales discussion.  If you wait for the RFP (never a good idea, by the way) to tell you what’s being measured and how, you’re already screwed.   For the past 17 years we’ve left the definition of ROI up to the direct-response oriented ad buyer, and look where it’s gotten us.   Truth is, most clients don’t have the background or the vision to really say how digital marketing can help them.  Helping them define and rank the potential outcomes is something we owe them.

Take a stand.  Get creative.   Seek to drive the ROI conversation early and you’ll naturally occupy a stronger and more valuable place in your customer’s esteem.  And you’ll find you’ve built a more sustainable base of business for yourself at the same time.