“I don’t want to be just a voice on the phone. I have to get to know these guys face-to-face and develop a sincere relationship. That way, if we run into problems in a deal, it doesn’t get adversarial. We trust each other and have the confidence we can work things out.” – Wayne Huizenga
My son Connor turned seven years old a week ago Sunday. His birthday extravaganza started Friday at his school with a class party. Saturday, the festivities continued with 15 little boys at our local arcade. When he got home Saturday evening, he was surprised with an Xbox 360 from my husband and me. On Sunday, I took Connor down to the beach to experience his first sunrise, which was more of a present (and memory) for me. Later that day, we ended his birthday weekend with a family and friend gathering at our home.
As I tucked Connor in Sunday night, I asked him what his favorite part of his birthday celebration was. Expecting to hear rave reviews about the Xbox, I was astonished when he replied, “Going to the beach with you, Mom.” As I held back my tears, I asked him why. His answer was simple and honest: “Because it was just you and me talking.”
This got me thinking about all the partnerships and deal making I have done over the past 22 years. The best deals were not made sitting in a boardroom around a huge mahogany table with 10 or 12 people. They were done one-on-one over lunch or dinner with simple and honest communication leading to mutually beneficial agreements.
Early in my career, for example, I worked for a well-known publisher in NYC, and we wanted to partner with another well-known publisher in Boston. We had a great idea for a new product that would benefit both sets of customers. We organized a special task force comprised of marketers, editors, and customer service people. The other publisher did the same. We had in-person meetings that required flying eight people 300 miles to the other publisher’s office. This was followed up by endless conference calls with 12 to 16 people on the phone.
The entire time this was going on, my gut was telling me that this was not the way to do it. But everyone else was convinced that we needed the “collective brilliance” of the team. You do need input from smart people when you’re working on the product… but these meetings were just on contract negotiation. This was just to get the deal done!
You probably won’t be surprised to hear that we never agreed upon the terms (someone would always chime in with a last-minute concern), and hundreds of thousands of customers missed out on what would have been a great product. Plus, both my company and the other publisher lost the potential for millions of dollars in revenue.
Since that time, I try to do all my deals on a one-to-one basis.
My deal making success rate is high because I follow three simple guidelines. These apply to everything from making joint venture deals to developing new departments within the company to hiring copywriters. They even apply to vendor and service relationships, such as e-mail deployment, printing and media buying, and hiring freelancers. Here they are:
Rule #1. Know the person behind the business.
To the best of my ability, I try to meet, in person, everyone I do business with. This is the best way to gauge their business ethics and integrity. I will fly cross-country for lunch, or meet them at an industry event and have a drink. I’m not saying you have to like everyone you do business with, but personal contact helps expedite the deal and solidify the end result.
Earlier this year, I wanted to find a partner who could help our customers understand the importance of product launches. I mentioned this to my friend and business colleague Rich Schefren. Well, it just so happened he was flying to Denver in two days to speak at a conference being put on by Jeff Walker, the foremost expert in product launches. I ended up on the plane with Rich, met Jeff, and three weeks later Jeff was speaking at ETR’s sold-out “Five Days in July” Internet marketing conference.
But this is not an anomaly for me.
My friend and colleague David Cross introduced me via e-mail to Tim Ferriss, the author of The 4-Hour Work Week, and I phoned Tim immediately. After discovering that we were both going to be in New York the following week, we made a breakfast date. Two weeks later, Tim’s articles – including one that you may remember about creating a “paperless life” – started appearing in ETR.
These deals happened fast because not only did I get credible references from Rich and David, two people I respect and trust, I also took the time to meet Jeff Walker and Tim Ferriss in person.
Even if you can’t meet everyone in person, make sure you have reliable references. Always do your due diligence. Make it your goal to understand not just the company you want to partner with but the person behind the company.
Rule #2. Only make deals that will benefit your customers.
You may be passing up millions of dollars initially, but if a deal is not in the best interests of your customers, it will cost you more in the long run in dollars, time, and reputation.
Just this past summer, a “friend” in the industry came to us with a product he had developed. He showed us sales reports from his launch. He showed us his brilliantly written marketing copy. Our first impression was: “Our customers need this. They will love it. And it will be a nice contribution to our bottom line.”
Patrick Coffey, Charlie Byrne, and I told him, “Great. Just send us a sample of the product so we can evaluate it. If it is as good as you say it is, we are sure we can promote it to our customers.”
Well, our “friend” was a bit taken aback. He did not understand why we wanted to see the product when he had already shared his sales report.
We tried to explain that this is our policy – that we had to believe in the product.
He said if we would not just take his word for it, he would take it to our competitor. Well, he did. And we heard through the grapevine that it was a tremendous hit. Customers were buying it up, both parties were making tons of money – and I secretly questioned my decision.
But just recently, the word in the industry is that the product did not live up to the marketing hype. Refunds were coming in like gangbusters, and our “friend’s” new partner does not want to work with him anymore.
Had our competitor lived by the same rule that prompted us to say no to this particular deal, he would not have wasted his resources and lost the respect of his customers.
If you follow this rule, you may miss out on a good opportunity every once in a while. But you will also be able to pass up deals that just won’t satisfy your customers.
Rule #3. Only make deals that will benefit your organization.
At first glance, this rule might seem to contradict Rule #2. On the contrary, these two rules need to work in unison.
Let’s say you are asked to hire a vendor because he is the husband of your wife’s best friend. You know him, and you know his product will be good for your customers. But his prices are outrageous and you can get a better price and equal quality from another vendor. What do you do?
To me, this is a no-brainer. You go with the other vendor. That is a better decision for your company – and for your customers. Never forget: You are running (or starting) a business, and good businesspeople have to make tough decisions.
Deal making takes a lot of time. But it’s worth it, because you want to build relationships that last. You can’t make a good deal without a good partnership. You can’t have a good partnership without a personal relationship. And you can’t build a personal relationship through phone calls or e-mails or in a conference room. Know your potential partner well, understand his expectations and needs, and make sure he understands yours. Both companies will benefit.[Ed. Note: MaryEllen Tribby is Publisher and CEO of Early to Rise. ETR has created a brand-new Info Marketing program – an all-inclusive, A-to-Z blueprint for starting your own powerhouse Internet business. Learn how to pick a product and set up a website. Discover copywriting secrets from the masters, techniques to help you create an e-mail list, the best ways to market your product, and more. We’ve limited the number of spots to 250, and, as of today, we’ve only got a few spots left. So sign up now to be part of this exciting new program.]