Stephany Sperberg on building trust, adaptability, and strategic alignment in negotiations

These days, I don't think any contract or any agreement that is put on paper is not amendable. It's really just a starting point. My name is Mike Lander, and you're listening to marketing negotiations, the good, the bad and the ugly, in partnership with The Drum. Where we bring you negotiation insights from CMOs, agency leaders and acclaimed authors. [Music] Steph, welcome to The Drum and Marketing Negotiations Podcast. Thanks ever so much for joining us. Thank you so much for having me, because I did just chat negotiations. Exactly, all things negotiation. And we've been emailing backwards and forwards about the topic as well, because it's something that we're not only, I think, share as an interest, but obviously day-to-day, like me, you're involved in negotiations with clients. So, do you want me to blend a bit about kind of who you are, the role you've got, your background, and then anything just slightly different about what you've done in your life or career? Sure, my name is Steph. I'm the Managing Director of the West Coast and West Coast Operations for an agency here in the US called Hook, Small Agency of 2020 Award winner, and Best Place to Work of 2022. And I manage the agency. I'm about 55 people under my watch, and about 50 people on the East Coast watch, so totaling about 110, 115 across the board. Okay. And something different or interesting about me, like we were saying, my mother, soon to me, mother of four. So, if I'm breathing hard into the month, you get some nine and a half, one's pregnant. And have three kids already. So, I'm just. With the recording stops, I do hope there's someone at home with you. I'll give like a signal if there's the burst on a podcast. 10 second warning would be great before you give birth. Fantastic, yeah. No, I appreciate the time and getting to do this with you before I head out on parental leave. Now I'm really looking forward to it. So, let's get into the first kind of question. We had a couple of questions that we'd said we broadly discussed. So, kind of the first ones around, obviously you were a very experienced commercial negotiator. You've adopted a few core principles about how you approach negotiation. You want to just talk about what they are and how, on why they are, the principles that they are? Sure. And I think like some of your other guests have mentioned you. It changes a lot of it changes, you know, based on the negotiation, what the actual terms of the deals are, who you're negotiating with. But in general, I approach most of the negotiations that I'm tasked with with transparency, with candor, with openness and directness. And that my leading philosophy is as an agency, I'm always trying to figure out what the motivation, what the true motivation is of the individual that I'm negotiating with, as well as their organization. And I'm super. All that means, Steph. So, just again, for people that are listening, you know, we talk about people making demands in negotiations. But the critical thing is what are their motivations? How do you describe a motivation in reality, in a negotiation? What are you looking for? Yeah, I think there's a couple of different things. There's the what's on paper, what you've told me you want, right? But you need this set of deliverables, you need this business outcome, you have this marketing challenge. There's that. So that is definitely a motivator. But then there's also my new business director, does this incredible thing, whenever a new opportunity comes across our inbound pipeline. And she researches who the people are and gives me a quick description of who I'm talking to, what their role is, how they pass. And that is very helpful for me because it also gives me a sense of not only what they're putting on paper, but who they are within their organization, what could potentially be their extrinsic motivations? Are they looking for a promotion? Are they looking to really shine amongst others? Are they really just looking to get this done and get it out of their hair? And then that's what that's on the individual side. And then the organization side is, what is this company all about? What are they really trying to do? Are they trying to sell more product? Are they trying to get more eyes? Do they need investors? And all of that kind of swirls in my mind when I'm crafting how I'm going to approach the negotiation itself. And you talked stuff, interesting a bit in the kind of the pre-discussion, about extrinsic and intrinsic motivations. And I've not heard that talked about for a long time. Do you always explain to listeners what that means? Sure, yeah. And that comes a lot of that's coming from. My husband is an elementary school teacher. Teachers are very in tune with children's intrinsic motivations. What's motivating them as do they love to play sports? And that's why they're playing it. Do they hate to do math? And that's why they're just trying to power through. So intrinsic is what is driving somebody internally? And what their personal motivations are for doing or not doing something. And then extrinsic would be, do they like the glory of winning on the kickball field? Do they love the praise that they get when they receive A+'s or they get something, they get a lollipop when they're done? So a lot of that can be applied to adults in negotiations across the board. And daily kind of communications, too, it doesn't even have to be negotiations. So what is the person across the table from me figuratively because everything is remote and online? But this is going to be a great thing for me. Hates absolutely hates with a capital H. Any kind of negotiation. Then I'm going to do everything in my power to make it quick and painless for them. The person across the table from me has an intrinsic motivation to like, win and get it done. And I'm going to play ball. We're going to play ball. Have a good time doing it. So that's really what I mean by intrinsic. And then extrinsic is of course, you know, do they get the kudos that they need internally or do they, do they get that glory when they sign this deal? Yeah, exactly. So this is, if I'm paraphrasing, the extrinsic can be seen as being the way that others see them. Intrinsic is about the way that you see yourself inside. Absolutely. 100% is exactly what it is. Yeah. And it's really important in negotiations. It's really, really important. I think you mentioned two critical topics. About that extrinsic intrinsic, but also the motivations of the individual versus the motivations of the corporation. Have you had circumstances? So I haven't written this down. We haven't discussed it. But I thought we'd ask it anyway. One of you have circumstances where the motivations of the individual aren't aligned with the motivations maybe of their corporation. Yes. I have. And what happens? Don't name the company or the individual. But just name the kind of scenario and what happened? Yeah. You know, there's one. You had a guest on a previous episode and I related to her so well. She was talking about one of her crypto clients that gone, it went by the wayside, the deal went by the wayside. And I was like, oh man, I wonder if it was the same client. I don't say the name of course. No, no, no. The individual was very much a competitive spirit, which I can appreciate. But we needed to win the deal, air quotes, win the deal. When his entire team around him was very much in desperate need of the actual resources and talents of the agency, but he was so focused on the cost-cutting, the effectiveness, writing in all of the success metrics and what would happen if any of them were to fail. That we couldn't get there. It was from our perspective, it was an impossible task. It was to fill upon. And ultimately, we got to a deal. This is my one and only example of a deal that I regret signing on behalf of my agency. But we got to a deal, but the writing was on the wall from the jump, that his particular motivations, and he was the owner of the release too, was not in line with what the organization needed or wanted. And his team said as much, and that puts us in a really hard spot, because you're working with one and beholding to one individual, but really trying to service an entire org. And it's like the definition of a pickle. It's the definition of a pickle. There's an advert in the UK at the moment, which our son picked up, called pets in a pickle. And that would be agency and client in a pickle. Agency and client in a pickle. We were the pet in a pickle. That's the. Yeah, no, I know the feeling well. A lesson learned the hard way for sure. Exactly. That's about, I was talking to someone last week from a brand, who's a brand CMO, and they were talking about, you know, if the relationship starts off badly in the negotiation, on one side isn't aligned internally around their own objectives and the company's objectives, then you end up just in a bad relationship and it's never going to work out. No. And spotting it early and being able to walk away is really important. Oh yeah. We've leased me on to another question we haven't had because I like thinking, I think on the fly often. So having a partner, so this best alternative to an negotiated agreement. So people listening, you always have to have an alternative so that you can walk away. Right. How do you maintain strength of your ability to walk away psychologically so you can go, you know what, you know, to replay it, that deal is going to be a bad deal. And although it's a valuable client and a really interesting project to work on or retainer, we're going to walk away from this one because we've got alternatives. How do you maintain that strength of alternatives? Yeah, that's a great question. I think that's a learned skill set. I think it's a hard skill and I think it's learned over time. I think you have to walk through or dredge through the mud of one bad deal to know what it feels like to want to never have to do it again. So I think that that comes with experience. And I think that for me, personally, the two things I rely on heavily to maintain my kind of psychological sanity, if it starts to feel that way, is my gut. That will tell you first and a core group of colleagues that you are just your sounding board that you go to, you say, this is what's happening, you lay it all on the table, the good, the bad, the ugly, you lay your pros, your cons, where you've maybe had a snafu or you just lay it all on the table and then you kind of pick it apart together and see if it is salvageable or if it's if you need to go with your baton and ultimately if you need to walk away. I think that's how do you, I mean, this is probably quite personal right now, given the position that the beautiful position you're in of having another child, but you won't be there. So your team won't have your, you know, many, many years of commercial support. So how do you transfer those experiences, those skills, that ability to be able to know when to walk away? How do you empower, re-skill your team to do that? Yeah, it's hard because I have a death grip on it admittedly. I love, it's hard to free those, right? I think that comes with time as well and that comes with observation. So my team is very involved in all of the all of the negotiations that we're working on together. I may be eating, but I might be consulting with three, four, five producer and business directors from my team. So they're seeing it all in action and the hope is that the skill sets transfer, that they feel confident in their ability to make those decisions on the organization's behalf and also trusting their own gut and also using that core team of, you know, colleagues across the organization as that sounding board. So really just kind of team them up over time to step into that role, which they hopefully have seen and observed and know how it operates. And then the safety net of the people that I can put them in the advice. Which I mean, you've just described a very classic skills transfer model, which is the theory goes and I've done the same thing in the past as well is that you start by someone observes view, observes you. So they want you doing something, then you do it together, then you watch them and coach them. And that three stage process is a very effective way of transferring skills to other people. And it sounds like that's exactly what you've done. Great. I love that that's a theory that I'm going to do. Who knew? Yeah. I also think that as part of that too, it's important for me for my team to seek failure as well. So that I think is more beneficial in my absence. So they can see the failure come if there is something coming. They can go, oh, I remember when stuff really like, you know, I have to have that crypto. Exactly. Yeah. So I think that yeah, that is that is a good working model. The stories are a great way of I mean, since humankind began. Yeah. We learn through people telling us stories and learning from stories and learning from I've learned the most from my failures are rather than my successes. So I think that's a really important lesson. You mentioned something in the notes before about knowing when it's important to trade maybe some of the negotiation variables in exchange for the longer term relationship and how important that can be getting that balance right. Do you want to talk a bit about that? Sure. Yeah. I think I think a lot of in my early experience with negotiating deals on behalf of my teams and my clients, I think the objective early on is to get it all right up front. Get every deal on the paper, get every T cross, every I dotted. Make sure that everything is encompassed. Every contractual clause is absolutely absolutely. Absolutely. All the schedules are all neat and tidy. Everything. To the day, to the dollar. And as I have grown in my negotiating kind of skills or philosophies, I think a lot of that is it's great. If you can get as much of that onto paper than great, but so much about it is establishing that relationship and establishing the longevity of that relationship. So some will come to me and say I have a three month project. It's a quick sprint. Got to get something done and out the door. Great. Cool. Easy peasy. Some clients come and they have big abstract. We need a percentage of a dedicated team over the course of who knows Helen. And those are the instances where I think giving a little on the details, you know, still making sure that contracts are structurally sound. Yeah. Yeah. For governance. Yeah. Making sure. But some of the let's get it on paper so we can get the ball moving so we can figure it out. That is where I will and my BA leads will probably you know jump on me once again. That is where we can get a little more abstract. We know rough what we need. We know roughly what you need. Let's get it on paper so we can get the get the wheels in motion. And then these days, I don't think any contract is or any contract or any scope or any agreement that is put on paper is not amendable. So it's really just a starting point. Like the negotiation itself, there's so much work up front before I come into actually kind of set the negotiations. So much work has been done on the communications and the new relationship building that I must respect that work enough to not be the bottleneck when when they get one to brass tax. I also must respect and acknowledge and beholden to the team that actually has to fulfill on the work. So I need to play a little bit more of a looser role than just like signing dot you know signing on the lot and making firm stances because so much has already been done before and will be done after. So I think that there is room to if a client is really unsure that they you know need this percent of a dedicated resource or thing want to go the full 12 or 18 months on the that is something I'm more than willing to negotiate and figure out later formal line because it's like like some of your prep pass guests have said it just sets up the relationship for more of a trust-based and collaborative relationship moving forward. Exactly right. And I've been I'm there's no stuff I've been I've been a procurement buyer. So I've been a buyer for private activity back companies and you know I think if I look at some of you know hopefully most of my deals were relationship hands and substance of the deal but I think when you're driven towards a savings target you know it's it's too easy to sacrifice a relationship because I mean I've got one example in my mind where you know the clients putting enormous pressure on us to deliver a savings target and to change the commercial dynamics at the expense of the relationships. They're really hard negotiations to drive through so I think getting that balance right is really important yeah. Yeah no I completely agree and like I said I think that there's it's not an undervaluing of services I would never do that to my team or or you know even the perception of that from from my clients and my buyers but it's not an undervaluing it's a it's a teeing up and a standing up of the relationship so that we can discuss it when it seals a bit firmer. Yeah but yeah it's definitely. So just before we close off this question we'll move on to the the economic situation we find ourselves in right now in kind of March 23. What signals do you look for where this kind of like this theoretical zone of possible agreement, the Zopa that people talk about. about and that writes about. And it's great theory, but in practice, how do you know if you're within the zone of agreement across all the different variables? Is it again, is it really a kind of a gut instinct or is it a more rational, written down? I can tell when we've hit the boundaries. What's your experience of that? I think the Zopa is a magical place. Or the banner. That's right. Yes, where everything's lovely. Yes. Sometimes it is a fantasy place because you don't know where maybe clients, maybe your prospective clients don't even know where they're at. A lot of our, a lot of our business is from word of mouth. So they're old clients that have taken us to their new roles or they're completely in that new client, instead of coming to us from existing clients. So they're coming to us and they're like, we don't know what we need. We don't know what we want, but we heard you guys were really great. And so that's, that's like a nice place to be. But they don't know what they don't know their budget. They don't know their scopes. So a lot of it, a lot of what I try to do is get a sense of where their, where there's a put T up their own zone for them. Exactly. Where we can play. And I think a lot, I think most of it is it boils down to unsurprisingly prep. It's just preparation. So I know what my base minimum is for what I think is necessary to get the whatever work they may need done. And then I, and then I can grow from there. I can have options. I can build upon that base with people with services with, you know, all sorts of added value kind of tacked on. And that, I think that really has helped with setting trust early with new clients to, because I can give them a range. And then they can say, Oh, okay. This is the range I'm actually in. And that's the best case scenario is when a client tells you what they're, what they're, where they're operating. And then I can say this is where I'm operating. And then we just have an open conversation where it gets hairy is when somebody knows there. But, you know, we, again, some of your previous guests have said it when somebody knows their budget and they don't want to tell you or they know you need, but they, they want you to figure it out. It is dance and it is a game. And it feels a little icky. And it's, I'll play, I'll play ball because like, like I said, my intrinsic motivation is I love it. I love the game. And you're good at it. I do. I love the debate. And I love the backing forth, but some people, you know, rightfully so or just tell me what you need. And I'll tell you how much it will cost. But, you know, when somebody tries to really hold their cards super close to the best, it is a, it's not really flag for me. Yeah. Because there is a limit. I mean, I'd agree with you again as an expire. I'd often range a supplier. I mean, I use the anchoring techniques and the counter anchoring techniques. But I'm expected to. That's my job. But, yeah. I'd be laying down markers because I'd rather find out early on. If we're a mile apart, then that's not by the way, seeing each other's time. Those are my favorite relationships. Those are my favorite conversations. A lot of those are in my, in my startups and my very small businesses that are coming. I say, this is what it would typically cost. They say, wow, can't even fathom that at this moment in time. But then they come back two years later. Exactly. Hold it a few times on things. They've done a capital raise, you know, they've done some rounds and all of a sudden, we're back in, we're back in biz because. Back in the game. Yeah. And they're, it's very much, I love those conversations because they're open, they're transparent, they're honest, and you, you know, you don't have to swirl. Exactly. So let's move on to the kind of the, the other question that we talked about. So obviously, we're recording it in this in March 23. We're all globally in the eye of a global economic storm and lots of other horrific events happening in the world. How's this impacting your negotiations now? And how are you managing those tough discussions with clients? Yeah. Just a light question. I mean, an easy, you know, off the cuff, arms, that stuff would be good. Yeah. Awesome. It is admittedly, it is difficult. This is the first year. I've been with my agents, my current agency hook for almost nine years. And this is the first real year where I have taken a step back and reevaluated some of my tactics on getting, getting through and considering them success. It's, it's a weird place to be at transparently. I don't think that that, I don't think anybody would disagree. It's also, it's hard. Personally, it's hard to balance the short term with the long term vision. So that is something that I'm struggling with. You know, we spoke a bit about a contract that I would have in any other scenario, probably walked away from. It is one that I'm keeping open and active that, you know, still, still very much making sure that it feels right for the organization. But one that I would have walked away from previously, I'm still considering on the table and, and trying to approach with more empathy that I maybe would have before. Yeah. Because the upcoming reality has changed. It has changed. It has changed fundamentally, I think. A lot of our clients are tech, FinTech, Big Tech. So layoffs and. I'm afraid anyone listening. We would call this 21st of March, literally at the, yeah, last week, Silicon Valley Bank went down. Yeah. Thanks to the C-Ticket over. And Credit Suisse went down and was bought by UBS, I think. Yep. And a lot, a lot of the mid-sized banks in the US too are being, I'm doing air quotes, bailed out by the large two so to, you know, to stop that kind of tail from happening. It's a wild, it's a wild time. I think that the, luckily, the big, the big tech companies that we work with, we have weathered the storm alongside of them. The smaller ones, we had some clients that were impacted by the SVB news. So trying to figure out very quickly if they were going to, if we need to shift gears, if we needed to, you know, make alternate prayer exactly. And it's just, it's a different, it's a different approach, I think. There's obviously a need for revenue in the agency. Yeah, well of course. Revenue. But there is also a need to be incredibly deliberate about how we're going about finding that new business, making sure that there's, you know, financial security or viability in the clients that we're taking on. Now that's something that I hadn't actually thought about before, which wild to admit. But, you know, are they, are they financially viable? Do they have a service or a product that we can see long-term, you know, long vision? It's meaningful. Yeah. On convenience for, if the investment upfront will be, will be worth it over the time. Is our investment going to carry them through for the next 18 months? Right. Well, they have cash burn like. Yeah, what, yeah, what is, what is all of that, what is all of that look like? So those are considerations that I hadn't really taken into account as actively as before. Something else that I have been thinking about is diversification of the types of businesses that we're getting in because not all sector, not all, you know, product and service verticals are being affected. So trying to think about other, you know, we're predominantly in tech or, you know, products and services related to tech that are rooted in tech. What are some other areas that our skill sets would be transferable to? Should we go out? So really kind of like, they're spying our client roster a bit too. I know that there's been talks of that. I mean, something around that contracting in this environment, having been through, I think I worked out this is my fifth recession that I've lived through. And there are patterns clearly. But the last big one obviously, seven eight, if I look at what happened then, what's happening now? Anyone listening and this isn't the you stuff made, this is really for the audience because you've probably been here and done this, I suspect. But one thing I would advise is where you're being encouraged by your existing clients to change commercial terms midway through a contract, change your pricing model. I think, as you said, within limits, that's a no-gociation you can open up. The thing I'd recommend is, contractually, committed to being a short term change. We will change our commercial model up until September 2023. After that point, the model reverts back to where it was as per the contract. Because what I saw happen in 2007, eight was a lot of renegotiation and contracts happening on commercial terms. This raised to the bottom, but there was no out at the end of it. So you ended up in these horrific situations as suppliers, apartments with your clients, where you'd had a 15% rebase on all your commercials, but there was no root out to get back to where you were. Then your client is making super normal profits at your expense. And that's wrong. Right. That is very much how I would agree with that. It's very much how I operate, too. And we spoke a bit about it. But regardless of the economic environment, there's something that just doesn't sit right with me about discounting for discounting sake. Exactly right. And we're not going to be able to do that. We're not going to be able to do that. I was talking to my CMO clients or my marketing clients is just let us in. Let us in on your needs. Let us in on not only what's working because we know what's working because you tell us but let us in on what's not working. Let us try to help. Let us try to support. And in the negotiations, we can write those objectives into the deals. And that's how we should be doing it to begin with. And the tips and tricks are just open and honest communication. Like, I think that's really what it is. So simple and so boring. But it's all about the partnership and the paperwork and the details of the actual deal itself. They become irrelevant over time because we're working on something real, intangible, and impactful together. So, like, what we're doing at the round table when we're making sure that everything is on paper and the contract is ground, it all kind of it becomes second priority. And that's really where I think the fun is. Is after the deal is signed, after the contract is done, where we go from there. And I really like to shift focus to the actual work pretty quickly. Yeah. Brilliant. And something else I've picked up, just making a few notes. I think that thing you talked about around intrinsic and extrinsic motivations for both the person and for the business, for their cooperation they're working for. I think those are really, really key. And that extrinsic intrinsic, I think, yeah, that's a really interesting point that I've not really thought about in enough depth before. Awesome. Well, you can think the fifth grade teacher has been. And her husband for the insight. So Steph, before we start off, first of all, obviously, congratulations on hopefully your new born very, very soon. It didn't happen in the pub car show. So it's not, unfortunately, we did not make history in this part. We didn't make history, no, but. Sure to be soon. Steph, just where can people find out more about you? LinkedIn, I'm very behind the scenes. Despite my extroverted voice, I am very, very shy. But LinkedIn only. And my agency, you can find at buyhook.com, b-y-h-o-o-k.com. And on social media, we're across social media everywhere. Buyhook or hook, not the movie is our Instagram. Hook, not the movie, very good. Steph, it's been a real pleasure. Thank you so much for joining us. Thank you so much. Thanks for listening to the Drum Podcast series on the Ghost Shading Insights. With your host Mike Wanda, please subscribe so that you'll catch the next episodes from our global marketing industry experts.