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RolandFrasier.com two part tale of two negotiations – one done right and one done wrong.
I just finished negotiating two deals in the past few days and wanted to share some insights from those two real world experiences to help you see the difference between people who are wildly successful and those who struggle to find massive successs. I will not mention names because I don’t want to hurt anyone’s feelings.
Deal Number One
My partners and I were looking for someone who could assist us in presenting at a large event we were putting on with over 400 people attending. This would mean exposure for whoever we decided to work with not only to the attendees at the event, but also to about ten thousand other buyers of the product sold through a product launch.
We learned about this person when they responded to an email we sent out looking for people who wanted to work with us on growing their business. It sounded like a good fit so we flew them out to meet with us to see if we could strike up a deal. The meeting was very telling as was the follow up interaction.
First Impressions
The first time you meet and try to do a deal with someone tells a lot about how it will be to work with them in the future. Here is what happened.
We laid out the scope of the deal, basically a standard speaking presentation with about 12 hours or so of content to be provided by the person over three days at an upcoming event. We would record the event and distribute the recordings to everyone who purchased the product.
We asked the person what they would want to do the event so we could see how it would be to work together and if it went well, then we could explore the possibility of making them the face of the product, which could allow them the opportunity to make a lot more money, gain incredible exposure and be the clear leading expert in that category.
We told them to think about it for an hour and then we would meet again to discuss things. About an hour later we met and the person had typed up a deal sheet. When we read it, we al oat all fell out of our chairs. Despite the fact that the person was only making perhaps somewhere between $10k and $20k per month, they proposed a whopping $40k speaking fee, no ability for us to distribute the recordings to our buyers, ownership of the copyrights by them and a few other, similarly unworkable terms.
Don’t Try To Gouge Your Potential Future Partner
Remember now that this is our first time working together, and this is to get to see if we fit and if we can possibly work together in the future. The biggest tell in the proposal was that there was no consideration for what might be a win for us. The person never asked what they could do to help support us. It was all about them. They did not think to explore ways to help us with what we wanted or needed. This is fairly typical in negotiations, but in my experience is a mistake because the more the other side sees that you want to work towards a win for both of you, the more flexible they will be in helping you get what is most important to you in the deal.
Despite this, we worked towards preliminary deal points and with a few major terms agreed on, decided to move to a draft contract. I drafted the contract and included the reduced speaking fee of $10k we agreed upon and included a provision for us to provide the event recordings to up to 10,000 buyers of our product with a 5% royalty on net sales for any copies sold in excess of that.
In fairness to the other person, we had estimated that there would be about 8,000 copies distributed to existing buyers so this was 2,000 copies higher than what we talked about in our meeting, but we needed some room to allow for errors in our initial estimate and we needed to be able to get copies to all of our existing buyers, so I built in a 2,000 copy wiggle room. I should have explained why I did this when I sent the contract over, but I was in a hurry and did not take the time to do that.
The 5% royalty is within the standard range of royalties for this type of deal and was actually generous because the speaker would only represent about 30% of the total content for the event. So, that would equate to about a 17% royalty for all participants in the program. (17% total participant royalty x 30% of content provided by this speaker approximately 5% for that speaker). Again, rather than just including a royalty and assuming we would haggle over it, I should have explained the above to the other person and perhaps they would have understood better.
Always remember to look for your own mistakes when something does not work out and try to see it from the other person’s point of view.
How NOT To Respond To A Contract Draft
I sent the contract off after one more discussion on the phone with our potential presenter, and then heard nothing back for a day. When I did receive a reply, it confirmed what I thought at the beginning of the negotiation…
This is a person who may be standing in the way of their own success because they 1) do not know how to negotiate effectively, 2) they prefer quick income hits to investing in potential mutually beneficial long term relationships, and 3) they do not appreciate the fact that educational content is largely fungible and can easily be assimilated and organized and presented by anyone with a talent for speaking, and that the ability to distribute content and reach and move markets truer here the bulk of the value lies.
In what way did the reply give away that this person did not know how to negotiate effectively? Rather than explaining each specific challenge they had with the proposed contract, they immediately assumed the deal could not be done and wished us well. They still did not try to understand or address our needs or find mutual ground or attempt to pursue a mutual win win deal.
Lost Opportunity Through Poor Negotiating Skills
They could have had a deal, earned $10k for 12 hours work, become the face of a product that allowed them to do and teach what they loved and quintupled their income in the process. They could have reached and helped tens of thousands of customers in their niche, headed a business that earned several million dollars in its first month of existence and become a well known branded name, dominating their niche.
Instead, a lack of business and negotiating skills along with a scarcity mentality cost them a fantastic opportunity. Perhaps they will go on to be a great success, and I certainly hope that will be the case. But, time and time again I have seen others who made similar mistakes continue to miss truly amazing opportunities until the opportunities stopped coming.
Lessons Learned
The lessons here for you are 1) always think about what the other person in a negotiation wants and needs, 2) NEVER assume a deal is dead or won’t work no matter how far apart you are because anything is possible in a deal and if you cut off a possibility you lose, and 3) be willing to enter into a first transaction with someone with openness, trust and without trying to get everything you possibly can from them on that first deal. Date before you marry, and be generous and flexible just to have the opportunity to work together and see what possibilities become available in the future.
This deal probably could never have worked, not because either of the parties were wrong, but because there was a fundamental difference in how each of us valued what we brought to the table. We have experience and a track record in building these types of platforms and we look for opportunities to work with people who see the uniqueness of our platforms and skills. We like to work with people who realize that plugging content into an existing channel is an amazing opportunity.
The person we were negotiating with had a small existing business in the niche we had chosen and felt that the content they had developed was worth much more than we could appreciate. Because we had already independently developed similar content it hey were right. What we wanted was an engaging skilled presenter who wanted to dominate a channel, who it was unlikely from the start that we would ever place a value on the person’s content that would make them happy.
Still, had either of us not made the mistakes mentioned above, maybe there could have been a deal.
Part Two Will Illustrate Roland Frasier’s Perspective On How A Deal Should Be Done
Roland Frasier Reviews – Four Seasons vs. Banyan Tree in The Seychelles
We just returned from two weeks in the Seychelles, all on Mahe, and we spent half of it with Four Seasons and half of it with Banyan Tree. Both properties are beautiful in different ways, and it is definitely worth your while to experience both if you have the time.
The Research
Before we left for our trip, we read all the reviews of both properties and they seemed to be fairly evenly split. Having stayed in equal category rooms in both, I can easily say that I would choose the Four Seasons as the best of the two, and as one of the best tropical vacation hotel experiences I have had. Read on for more about Four Seasons and more about the pros and cons of each of the two resorts.
Arrival and Reception
From the moment you arrive, you realize that you are in the Four Seasons amazing experience bubble. From a refreshing welcome drink and cool scented towel to immediate service focused just on you as you relax at a lobby table while your documents are processed, the service level drips with awesomeness.
Villas
We were in a plunge pool villa, number 107, which had marvelous views of the beach and water below, a private day bed area for two with that same view, a spacious and well air conditioned room with on demand movies and plenty of entertainment for in room chilling, an amazingly spacious bathtub right against the floor to ceiling glass that separated it from the plunge pool and the pool itself with just the right amount of width on the stairs to lie on relaxing as you enjoyed the coolness of the water and the heat of the sun on you.
Beach
After checking in and checking out our villa, we went down to the beach and were immediately greeted by the staff who ushered us to an umbrella shaded area right on the sand and then plied us with a complimentary welcome drink, fresh towels to lie on and dry off with and another cool scented towel. Shortly after that, we were offered menus with a delicious assortment of on beach dining and cocktail options which we readily embraced.
Spa
Later in the trip, we visited the spa and had their signature service for me and my wife. The service was impeccable and as long as you are okay with the multiple stairs descent (and ascent after the treatment), you will not be disappointed in the quality of the massage experience there. They also have the most delicious cinnamon tea there. So delicious in fact that we kept asking for it from room service throughout our stay, which they happily provided to us by the pitcher full.
Property
The property itself is simply beautiful. It stretches for quite a distance from end to end and buggy service is never more than about 5 to 10 minutes away to whisk you away to wherever you want to visit on the property. If you have been to the Four Seasons on Bali at Jimbaran Bay, the property is very similar, nestled in and at one with the natural rock and native vegetation. This property sprawls from one end of a private bay and beach to the other, and even spills over on either side with residences on either side framing the hotel in the middle of the property.
The rooms would remind you of the Four Seasons in Costa Rica or Chang Mai in Thailand if you have visited either of those properties. They are clean, and they do have the occasional Gecko which shouldn’t bother you too much as they are pretty darned cute.
So now, let’s compare the properties, Four Seasons Seychelles vs. Banyan Tree Seychelles.
Reception and Service
Four Seasons is a 10 out of 10. We were promptly greeted, given welcome drinks and cool towels, our documents and arrival were all processed quickly, we were told about activities and were in our room within about 15 – 20 minutes including the buggy ride. Banyan Tree greeted us equally well, processed our documents, gave us a cool towel, but no welcome drink, and took us by buggy to our room in about the same time.
Rooms/Villas
We had the highest category rooms for one bedroom at each property, so this is a pretty fair comparison. The Four Seasons gets 10 out of 10. Our room was clean and spacious, provided stunning views of the beach and bay below, had a wonderful over-sized bathtub right on the floor to ceiling glass with views to the beach and sea, a separate shower big enough for two, an outdoor shower private enough to use for bathing, all three bathing areas were complete with bath gel, shampoo and conditioner and easy access to towels. We received a welcome amenity of champagne and local fruits. We were in Villa 107.
Banyan Tree was also extremely nice and gets 10 out of 10. The villa and interior areas were all spacious and clean. We were in Villa number 7. The villa was right on the beach with amazing access to the sound and beauty of the water, but also private as they allow the trees to grow and cover the back yards of the villas for privacy with little holes cut through to the sea. This is ideal for easy beach access and also privacy. Our pool was huge and it was wonderful having the pool and the beach right there together.
We walked on the beach every morning and evening and splashed in the pool and the separate private little spa with waterfall. There is a generous lounging area with day bed for private sunning and a covered cabana with dining table for in villa dining. The outdoor shower is great for rinsing off after a walk on the beach, but not really private enough for bathing. Inside the villa, there is another spacious shower but no bath tub and we only had shampoo, no bath gel or conditioner for our entire stay.
Two warnings if you are staying in this type of room. First, the bed will attack your toes with extremely sharp corners. We repeatedly stubbed our toes into the sharp wooden bed corners the first day and solved this problem by wrapping towels around each end of the front of the bed. Second, the in ground lights on either side of the entry way doors to the villa burn very hot. If you walk on them on your way into your villa in bare feet, you will definitely get burned, so watch out.
Food – Banyan Tree 2 out of 10. Four Seasons 9 out of 10.
This is one of the two huge defining differences between these two properties for me. I could stay at either, but would probably not return to Banyan Tree simply because the food is flat out not very good. We dined in the specialty Creole restaurant, the special Chateaubriand on the beach Gazebo, bar and main restaurant as well as in villa and without exception the food ranged from average to just plain bad. The meats were low quality, and one soup was basically broth and gristle. Honestly, they tried but just missed it time after time. Everything is insanely expensive and that would be bearable but not when you could get a better meal at a Denny’s in the US. They are desperately in need of an entire team of chefs and bartenders, Executive, Pastry and Mixologist. We were so happy to arrive at Four Seasons and get quality food again. Cocktails sadly are the same. The bartenders at Four Seasons blow the generally awful concoctions at Banyan Tree clean away.
At Four Seasons, the breakfasts, lunches and dinners at all restaurants and bars were world-class Four Seasons standard. Service was prompt compared to lackluster at Banyan Tree, especially on the beach service. Four Seasons just “gets it” and Banyan Tree does not.
Once we arrived at Four Seasons, we were immediately greeted with fresh, delicious breakfasts, lunches and dinners and they know how to make all the cocktail varieties you might want to try on a tropical vacation. It was so noticeable that both my wife and I immediately sighed a deep sigh of satisfaction returning to the world of quality, tasty food from the overpriced dreck on offer at Banyan Tree.
Service – Four Seasons 9 out of 10, Banyan Tree 6 out of 10.
If you are English speaking, then Four Seasons is much friendlier than Banyan. There is just something a little bit off about Banyan, especially in guest services. It seems as though the three desks worth of people in reception would prefer that you just go away and not bother them, while Four Seasons welcomed and wanted to help you. On beach and in the restaurants the service was lackluster at Banyan, which made the poor quality of their food all the worse. In villa dining was a welcome exception and all of the staff in that area did a great job of providing wonderful service.
We were greeted by the manager of the property, Frank as I recall, who was friendly and welcoming, but his gregariousness was not shared and did not flow down through all the staff. All in all, i would say that half of the staff was well-trained and eager and ready to please at a very high level of service and half of the staff was not. This made for a very inconsistent experience.
Spa – Four Seasons 7 out of 10, Banyan Tree 10 out of 10.
The Banyan Tree spa experience was simply amazing, the best we have ever had. My wife and I went for their signature 3 hour service and the staff, the facility and the complete service and experience was nothing short of breathtaking. From the views to the four women who provided the experience, the foot bath, massage, scrub, shower and bath, it was just awesome. It’s crazy expensive, but completely worth it and if you don’t take advantage of it you are missing one of life’s great pleasures. 10 out of 10 for Banyan Tree here.
The Four Seasons spa was nice as well. The reception staff at Banyan were more friendly and welcoming. The therapists at both were wonderful. The spa itself at Four Seasons is on the highest point of the property and has amazing views but the Banyan Tree spa is open to the sea from where the treatment is provided and the Four Seasons is closed, making the Four Seasons a little bit stuffy and not as nice as having the fresh breezes from the ocean to cool and refresh you. The cinnamon tea at Four Seasons is delicious, and the bath after the spa was nicer and cleaner at Four Seasons. The treatment itself just wasn’t quite as spectacular as the signature experience at Banyan. We were probably a little biased though because that Banyan Tree treatment was so amazingly over the top that Four Seasons just had a very hard hill to climb to come close.
Overall Conclusions
If you can do both properties, do both. The beach at Banyan is dangerous for swimming and much rougher than Four Seasons, but the crashing waves make an excellent background for walking or even sleeping in your villa. We were told that a few people have been killed swimming at that beach and that it is the most dangerous on Mahe, so you may want to consider that if you want lots of swim time or if you have young children or are not a strong swimmer. The beach at Four Seasons is completely calm and wonderful for swimming but we definitely missed those crashing waves.
If you can do both properties, I would stay first at Banyan Tree and finish at Four Seasons. Try all the local restaurants while you are at Banyan and avoid their food and cocktails as much as possible while you enjoy off property dining. Have the signature spa experience, relax on the plantation style deck and enjoy your amazing villa. Then go to Four Seasons (in a cab not hotel transport which is quite simply rape like pricing – $330US for a transfer from the airport or $200US for a transport to Four Seasons compared to our drive we found who charged $41US and $16US for the same service, which is simply shameful given all the other pricing at Banyan), and enjoy the on property dining options, which abound.
Either way, you will have a great vacation. If I could only choose one and when we return again, we will be staying at Four Seasons and only visiting Banyan for the spa.
I haven’t posted here in a bit but it’s because I have been really busy doing the business I teach. Over the past twelve months I have grown a brand new multi-million dollar business, formed amazing new partnerships, bought a company and Conti used to grow my other businesses.
The biggest challenge with keeping up on my posting here is my travel schedule. Last week for example I was in Dalls, TX on Monday and Tuesday, then Las Vegas Wednesday and Thursday for the Licensing Expo. This week I am in Cleveland, Ohio Wednesday and Thursday and then doing a live event in San Diego Fridayand Saturday, flying to Las Vegas Saturday afternoon to speak Sunday morning and then flying back to San Diego to finish out the live event there.
Don’t get me wrong though. I love it, and I am excited to be able to share all of this stuff with you. Here is what is coming up over the next several weeks and months…
June 22 – June 24: Maps Magic Local Marketing, San Diego, CA
June 24: Affiliate Mastermind Group, Las Vegas
July 11 – July 13: locksmith Tradeshow, Las Vegas
July 20 – July 22: Business Broker University, San Diego
July 27 – July 29: Local Marketing Mastery, Austin, TX
August 17 – August 19: Nitro Master Local Marketing, Dallas, TX
August 24 – August 26: Local Lead Machines Live, San Diego, CA
That’s just the live events we are doing. We are still actively buying business eases, providing local marketing services and much, much more.
I hope to see you at one of these upcoming events soon!
Cheers,
Roland Frasier
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