Discover the best practices for event planning contract negotiations you should follow and the most common mistakes you should avoid.
Contract negotiations are, without a doubt, among the most dreaded tasks for event planners. Yet, negotiation is also one of the most valued skills an event planner can have.
Indeed, it helps organizers to keep events within budget and get better value for money when dealing with partners.
Negotiation is vital for an event’s success, enabling organizers to improve their return on investment.
Nonetheless, negotiation can prove a tricky matter since it impacts relationships with event partners early in the event planning process.
And, given the legalities associated with contracts, it can seem daunting to negotiate certain aspects.
Keep your budget in mind
Before starting negotiations, you should always draw up an event budget, starting with projected numbers for each category and item. That will help you begin talks with event partners that you can afford.
While many event planners prefer not to share budget numbers with suppliers, being transparent will bring benefits, as showing trust will lead to a better business relationship. Studies have shown that, generally, the more information is shared, the better the solution reached.
Be clear in your goals and expectations.
Whatever the case, you should always communicate the critical points of your event with your suppliers. This includes your planned date, the event mission and objectives, the event program, and the target attendance numbers.
Indeed, when you’re talking business, clarity is a crucial driver of repeated, successful deals.
In a similar vein, make sure to convey clear expectations regarding quantity, quality, and how you will measure performance.
Define your goals early and communicate them clearly, so you prevent any confusion with suppliers and all of the stakeholders.
Detail all services provided
Contracts for event planning should detail all the services provided by your event partners or suppliers.
Commonly, the starting point of negotiations is an SLA (service level agreement). An SLA outlines the services provided by the supplier, defining the clauses and metrics by which the service is measured and the penalties incurred if the services are not rendered.
With an SLA, every topic you agreed on at the negotiation table is reflected and defined in an official document.
However, an SLA should not only state what is included in the services provided. It also clarifies what’s not included, leaving no room for doubt.
In other words, make sure you cover each task – either to specify if the vendor is responsible for it or not.
A thorough SLA has to include:
- Agreement Overview
- Involved Stakeholders
- Included Services
- Excluded Services
- Payment schedule
- Plan of action for periodic reviews and improvements of the SLA
Get multiple quotes
Even if you have landed on an industry-leading supplier with an excellent record and client reviews, always get quotes from multiple vendors.
Comparing vendors and getting different prices and proposals will support your negotiations, as you will gain leverage from having several options on the table.
For example, you can get bids from three comparable venues or audio-visual partners, each offering a different price and a level of service. In that case, your “preferred” partner may be able to match pricing or provide a complimentary service they may not have offered otherwise.
Consider multi-event agreements
Then, another strategy that can help you in event planning contract negotiations is considering a multi-event agreement. It is a win-win situation for both parties, as it ensures repeat business for the suppliers and helps planners get better rates.
For instance, you could negotiate a multi-event contract with an audio-visual production partner or a hybrid event venue that you plan to use repeatedly.
Nonetheless, bear in mind that multi-event or multi-year contracts are advisable for tried and trusted partners. Consider these for companies that have demonstrated their worth in your event, so you don’t find yourself “trapped” in a binding contract.
When you enter a negotiation, it is understandable that you may have non-negotiables you are not willing to budge on. Identifying these non-negotiables and communicating them with your prospective partner is crucial, so no misalignment or misunderstanding occurs.
However, showing some flexibility will bring you rewards, as you will get more favorable terms in return for something the vendor wants.
So, think about the aspects of your event you may be willing to alter without damaging the event value. Communicate these with the vendor up front so that you can get concessions in terms of pricing or services provided.
For instance, you may offer to change the event date to off-peak times when the vendor or venue is not likely to be busy.
Most common mistakes in event planning contract negotiations
Being afraid to ask
If you don’t ask, you don’t get. No matter how small the detail or the concession is, don’t be afraid to ask for it.
Particularly for significant contracts such as an event venue or a hotel, the revenue you are bringing is reason enough to warrant concessions in certain items.
For instance, you can negotiate the price of WiFi with your event venue or F&B minimums with your catering company.
Similarly, don’t be afraid of asking any doubts regarding your contract or services provided. Don’t hide uncertainties. If you’re not sure about anything, speak up.
Falling for last-minute or rushed negotiations
Event planning contract negotiations are a process that takes time.
If you wish to bargain, you cannot inform a supplier at the last minute, just weeks before your event is due to take place.
Additionally, if you have an appropriate event planning timeframe, prospective partners won´t pressure you into a deal. Indeed, some vendors impose short deadlines or bring up other interested parties in their services to push sales quickly.
Therefore, plan well in advance, contacting vendors early in the process, so the negotiation process gets started well before the event day.
Not planning for cancellation
As highlighted by COVID-19, not planning for event cancellation is one of the worst mistakes an event organizer can make in contract negotiations.
That’s also another critical point. Event Planners need to be great risk managers, which means being hypothesis-driven at all times. If anything goes wrong, will you have that service provider there with you to face the situation?
In that sense, the scenario of cancellation should always be covered in event planning contract negotiations, protecting your business from indemnities.
Typically, most contracts include a termination clause called “force majeure.” The clause protects you from liability when circumstances beyond your control arise, such as a pandemic, a natural disaster, or terrorist attacks.
Added to that, you should also include an indemnity clause, protecting you from responsibility regarding damages to a third party resulting from your supplier’s negligence.
Always opting for cheap suppliers
When comparing vendors and negotiating with each one, we run the risk of always going for the cheapest option.
However, always do a thorough background check and make sure you’re willing to work with this supplier. The last thing you want is being held responsible for their mistakes – and as the event organizer, you probably will.
Not reading the fine print
It may sound obvious, but it is nonetheless imperative: read every line in the contract you sign. Above all, you do not want to be surprised by additional fees that hurt your budget.
So, thoroughly review the entire contract, so you’re able to state without doubt the total amount you’ll have to pay to the vendor.
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