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How to Negotiate Terms with a Daily Deals Site (Groupon, Living Social etc…)

D is for deal.

Daily deals sites are red hot right now. Appearing on one of these sites can be a big exposure boost, but it’s also important that the deal offered works for you and your business. That sounds like a no-brainer, but the web is filled with horror stories of mom-and-pop shops or early start ups getting burned by the big daily deals sites like Groupon and Living Social.

This is a judgement-free post by the way. The daily deal thing works for some businesses and doesn’t for others–despite possible misconceptions by business owners or proselytizing by Groupon’s sales department.

Getting Down to Business

First, you need to realize that this will be a cost center, not a profit center. You will lose money doing a daily deal, and in many cases the boost in exposure will be well worth the expense–it’s your call. What we want to do is minimize the expense once you’ve made that call.

Here’s a few tips to help you out. Some of these apply to general negotiation, but this specific post is obviously specifically tailored to wheeling and dealing with Groupon and the like.

  1. Know you’re outgunned: Be aware that you’re negotiating with someone who attempts these negotiations 10 times a day. Ostensibly, they’re good enough to get paid to do it professionally. They will press hard on terms; they’re supposed to. This isn’t a good/bad thing–it’s their job so they do it all the time. It’s not your job so you should prepare a bit. Figure out what you want, what you can afford and don’t budge. Accepting the reality of this situation can also offer some valuable perspective as you’re listing to their pitch.
  2. Pick your battles and be realistic about demands: There are some conditions, like terms of use and duration of acceptance, under which they negotiate with a lot of flexibility. Then there are others, like dollars of revenue, under which they are more constrained.
  3. Recognize the value of exclusivity: Be very clear on the existence or absence of any non-compete agreements. Don’t accept one from anyone except Groupon either. They’re the biggest fish in the pond by far, and in my opinion, the only one worth entering a non-compete to do business with. Groupon, last time I checked, requires a 90-day “no other daily deals” agreement. That might be fair in their specific instance, due to their market reach. In the other cases, it’s not and you should make sure to reject a non-compete agreement unless you get some real concessions made elsewhere.
  4. Play low power to buy time and objectivity: Finally, whoever negotiates should pretend not to be in charge, whether they are or not. This sort of allows you to play good cop bad cop all by yourself. “That sounds good to me, but can you put it in writing for my boss?” is your best defense against making a poor decision in the heat of the moment. It is totally acceptable and can diffuse a high-pressure sales pitch. Forcing a quick decision is one of the oldest and best negotiating tactics because humans are emotional creatures and perform poorly under pressure. Use this tactic to buy yourself some time to think things over. As long as you play man-in-the-middle, whether you are or not, you have the ability to stop and start negotiating sessions. You can take the time you need to run numbers, do some research or just take a step back and think it over.

In any negotiation you will have parties with different goals. This doesn’t mean you have to be antagonistic, but you must be a good shepherd to your own interests and those of your business. Never forget that their job is to make the biggest possible pile of cash selling your product, then take 50%. Your job is to make the pile the right size for your business, and then take 75%. Good luck!

I’d like to extend a big thanks to Tom Kessler for starting the discussion that led to this blog post. You can follow Tom on Twitter @magicclams.

Half of Small Businesses Don’t Have a Website

H is for Half

It’s true. And as a small business owner of a web development agency, I was shocked when I read that statistic. Do a simple Google search on the subject and you’ll find multiple articles and quotes like:

Of the 55 percent of small business owners who don’t have a web site, 57 percent say their businesses will never have one …

On a daily basis, I talk to businesses of all kinds – from small to large and everywhere in between. The common thread is a desire for success and business growth, especially in this lethargic economy.

So the question persists, why are so many small businesses hesitant or apathetic about establishing an online presence for their business? After all, small businesses are fighting every day for market share, recognition, and the chance to prove their product or service is just as good or better than their larger, more established competitors.

I fear these small businesses are failing to understand that a website is often times the first interaction a potential client or customer will have with their business. Fail to show up on a Google search and your business instantly takes a few steps down on the credibility ladder. A business that ignores the power of this first impression is leaving opportunity and dollars on the table for their competitors to easily snatch-up.

Now some of you may be saying, “I get it, but I just can’t afford it” or “I don’t know where to start and certainly don’t have the time or knowledge to do it myself.” Both of those statements are understandable, but the cold hard facts are as follows:

  • The internet is obviously not going away
  • As gen-Xers (like me) and younger generations born with the internet at their fingertips move into decision making positions, the internet will only increase as a factor in the buying process.

Even the simplest of websites can help even the smallest of businesses look as professional and polished as their big competitors.

“No” Means “Thank You”

N is for negative.

From the day I started my design business, over a decade ago, it was incumbent upon me to bring in new clients and create opportunities. I still hit the pavement each and every day – researching new leads, making phone calls, sending emails and schmoozing new clients.

One might think the worst thing that can happen after a pitch is being told the word “no”. They’re wrong.

In reality, “no” can be one of the better responses you get from a prospective client (aside from the obvious “yes”). “No” is honest, conclusive and it frees your schedule to pursue other opportunities.

The most frustrating part of sales can be the prospective client who can’t seem to muster the word “no,” but in one way or another keeps you coming back to the table via emails, phone calls or actual meetings. You suspect the “no”, but it’s not actually there because it was never said. You feel it and eventually you have to move on, but after a prolonged process.

While it would be flattering to think these prospects are taking the time to “soak-in” all of the amazing services my team of skilled designers and developers has to offer… More likely than not I suspect these prospects are simply trying to be kind and/or are afraid to say “no.”

This is where the fallacy lies: by avoiding the word “no” these individuals aren’t being kind or saving face, they’re just avoiding termination of the communication and thus prolonging the inevitable – that we will not work together. And while they may see this as the kind or the easy way out, this choice is detrimental to both parties.

In the face of this alternative, the act of saying “no” is beneficial not only to me, but to them as well. It saves us both a bit of the most valuable and least-renewable commodity we have access to: time.

If You're Selling The Future it Should Look Like The Future

Osram Sylvania (Warning: 2000-era web design) and Philips will be introducing some Buck Rodgers-esque bulbs over the next year. They’re going to start trying to sell us on color-correct super-high efficiency LED bulbs that last longer and use less electricity. Sounds good but there’s a catch. At least, according to New York Times’ Tech writer Eric A Taub. He thinks they’ll be a tough sell because they look weird.

But they’re going to fly off of shelves…

Q: Why is there a 6 month waiting list for the Toyota Prius while Honda discontinued it’s Hybrid Accord in 2007?

A: It’s because when people are buying the tech of the future they want it to look like it’s from the dang future. The Prius looks like a cross between a Mac Pro and a boxfish. The Hybrid Accords look like all the other Accords we’ve been looking at for years.

I’d buy myself this little piece of the future right now, if I could. When it does come out, I’ll be first in line. And I’ll bet a lot of other people who grew up reading S.F. comics, looking at concept cars and playing with imaginary light-sabers will too.

[pic from Lighting Science Group Corp.]

Highlights Midwest – Kansas City Web Conference

I’m at the Highlights Midwest Web Conference in Kansas City. It’s been a killer event so far. I’ve seen three great presentations this morning. Of particular interest was a presentation on leveraging social media for brand management by Lavarow from Des Moines. Hillary and Nate really have their stuff together. Good show so far.

The tweeting is going down at highlightmw. I’m doing some live twittering of the event at wmeredith. I’ll have another update tomorrow.

Rolls-Royce Green-Marketing Modern Propeller Aircraft

Legendary engine maker Rolls-Royce has a new baby and they’re pushing it to market in a green wheelbarrow. They want modern planes to fly with propeller engines just like they used to. Or at least, kind of like they used to. Rolls has a new turboprop engine with a double rotor and new blade shape.

The company claims the design could cut an airline’s fuel bills and greenhouse gas emissions by 30%. “We’re talking about saving $3m or 10,000 tonnes of CO2 per year per aircraft if you introduce an open-rotor on to a 100-200-seater aircraft,” said Mark Taylor, an engineer at Rolls-Royce who is leading a project to design the next generation of aircraft engines.

The main reason modern commercial aircraft use jets is because of a lower sound profile. With markets demanding economy and efficiency over comfort you may take your next flight being pulled through the air by a turboprop.

Rolls-Royce brings propeller engines back in vogue – The Guardian