Everything in Marketing Requires Negotiation – What Can You Do About It?

Marketing professors at the Kellogg School of Management at Northwestern University say they are working hard to pound the principles of analytical-based marketing into their apprentices, hoping to delay the slide into making decisions based on feelings. Their hope is that the practice of disciplined search for truth would survive beyond the first five years.

Why the five-year horizon? Setup marketing matchmakers gives a clear indication on its web page “The Marketing Career Path.” MBAs enter the marketing ranks as assistant brand managers or marketing managers in smaller companies. For five years they are under the hierarchy of CMOs, VPs and directors. In the first two rungs out of school, life is all about the numbers and keeping everything on the rails. By the time people become managers and directors, the focus turns to more strategic issues and competition not only with rival businesses, but also rival internal business units.

The wheel of fortune in terms of sources of power in management, particularly marketing management, has only five pie segments:

1. Legitimate – Based on position/rank in the company
2. Coercive – Based on force of will backed by punishments, sanctions and threats
3. Reward – Based on incentives, positive reinforcements for desired behaviors
4. Referent – Based on trust, mutual loyalty creating faith in the leader
5. Expert – Based on expertise/credibility gained through training, experience and skill in sharing

Marketing managers who stick to their analytical roots are more likely to be able to make good use of the other four sources of power compared to those who, in a sense, lose touch with reality. The pressure to make decisions, once a manager is freed from the daily grind of tracking the numbers, makes it easy to imagine that one of the other four sources of power has primacy. Whichever source they pick is probably correlated with their inherent personality. (See the book StrengthsFinder for a useful and accessible personality identification tool.)

However, business life is a process of constant negotiation. Those who successfully negotiate win-win agreements and make good on their bargains generally rise through the ranks and sustain themselves in leadership positions more than those who are hit and miss. Dependable good performance is better than spectacular success mixed with spectacular failure – or worse, a string of failures.

Can anything be done to constrain the number of things that have to be negotiated? Oh, some things could be declared non-negotiable. But that tactic often ends up with the constrained issue being fixed, and other things neglected.

It is better to stay close enough to the numbers so that you know the relative value of every negotiable item. Delegation is the manager’s only defense against the life-sucking draw of perpetual negotiation. Put the negotiation, with the information and perceived valuation, in the hands of those closest to the action. Put serious energy into having the data needed to make informed valuations on the negotiations only you can handle. If you don’t have time for all the data work, that’s what consultants and gig-workers are for. Spending a few bucks to KNOW something is better than making a bad gut decision and losing everything.

Contributing Author
Clinton Kennedy
Senior Database Marketing Analyst