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The Role of Negotiations

January 6, 2011 Negotiating & Sales 2 Comments

Written by: Charlie Borland

by Drake Fleege

It’s a great day – the photo buyer has made contact to license your image.  To facilitate this transaction it is necessary to ask a few questions.  The generic questions are of importance.  These include: the image selected, intended utilization, (cover, inside, image size), publication, distribution, and frequency of use.  These questions are easily handled with most photo licensing calculators.  If this is all that is needed, the image can be licensed and sale made, assuming the calculator returned a figure within the licensee’s budget.  The transaction becomes essentially a commodity purchase, regardless of the price of the license fee or the quality of the image.But what if the calculator returns a much higher figure than the photobuyer’s budget or higher than the licensee believes the image value is worth?  In some cases, the photobuyer may move on to the second optional image.  The photographer and the photobuyer both lose.  The photobuyer lost the opportunity to utilize the most desired image, the photographer lost the immediate business and potential long term relationship.

I’ve chosen a slightly different approach.  Remember the intangible in negotiations – emotions – that play a key role in the overall success of the process?  Rather than limiting the photobuyer to a commodity transaction,  I want to provide a value-added transaction to the photobuyer and do so through negotiations.  This is an opportunity for me to provide the selected image, offer additional licensing options that may not have been previously considered, and learn from the photobuyer where I may provide value to them in the future.   The photobuyer gains the opportunity to learn what I can provide and how I may help them going forward, both with this current project and perhaps future requests.  Most importantly, direct negotiations allow the photobuyer to have a positive buying experience.  The overall goal is simple – the next time the photobuyer performs an on-line search and my images are returned, they move one or more into consideration because of this experience.

Think of the number of items you may purchase on a daily or weekly basis that are commodities.  Milk, bread, stamps – all needed items.  Simply go to the counter, pay the clerk (or kiosk for stamps), and move on throughout your day to the next event with no emotional tie to the product or transaction you just made.  That is very efficient for items that hold little value for you.  A commodity purchase is basically an unemotional purchase.  It fills a need, but so do other products that can be easily substituted at a future date.

But what about the value items in your life?  Those items that we believe provide great value are purchased far more deliberately.  People who read food labels find value in the ingredients, making decisions between different products based on the value each provides.  The same is true for the photobuyer who desires to license one of my images.  That person has “read the ingredients” and has determined that one image provides maximum value for their project.  It’s now my job to facilitate the transaction in a positive, efficient manner, fostering a long-term business relationship.

As mentioned in the previous post, I do not use an on-line pricing calculator to price my images.  (The photo calculator I use, though not on-line, provides extensive flexibility, being most effective for my purpose.)  While it is important to know how the image will be used, size, location, distribution, etc,  I additionally desire to know about the organization, about the person, how they found the image, what the article, book, or documentary will be about, how this selected image is vital to the project’s overall success, and  how they see their project being marketed.  In short, I want to talk with the buyer.  If the photobuyer shares their budget, I need to decide if it is acceptable to me.  If it isn’t, is there something else that the photobuyer can offer that will help make up this difference?  What about additional licensing opportunities (ie, web site or marketing brochures)?  Are there future photo requirements that can be licensed at the same time?  Does the photobuyer offer a ‘Contributing Photographer’s” listing web page that they’ll agree to list my name much longer than typical?  In some situations, the licensee’s company may publish books or other materials that may be valuable as a resource (ie. travel guides, etc), and therefore are they willing to include such as payment?

In the instance where the photobuyer may not be able to share the budget immediately, I use the photo calculator, offering a pricing range for consideration.  At the initial outset, it is much easier to obtain agreement for a pricing range than it is to an exact purchase figure.  At the same time, I may also offer concessions on other requested items, such as payment terms, or seek additional information concerning future licensing of this image, (ex. web site, brochures, re-license and future license opportunities, etc.)   Through a short exchange of discussion (either email or phone) the negotiations is finalized. With the agreement confirmed via email, the high resolution TIFF is electronically delivered.  Knowing that a successful negotiations and business relationship is built on trust, I do not wait for payment before sending the TIFF image.  Rather I accept their payment terms (typically paid after publication).  I have always been paid in a timely manner.  Each party has learned from the other, with the ultimate goal of a long-term business relationship being formed.

Throughout the negotiations, the photobuyer feels positive about licensing my image for their project and finalizing the value-added agreement.  Upon viewing their final project with the included image, an emotion of pleasant memories abound.  And that’s what it’s all about – having fun.

You can view Drakes website here.

If you have any thought about licensing and negotiation, please leave a comment.

Book on Negotiating

weisgrau negotiate The Role of Negotiations

Photographers Guide to Negotiating

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