Hello! For my first share to the group I wanted to address one of the major challenges we face in the music licensing world – the fact that the same song may be worth $500 today, and $50,000 tomorrow. While it can be tricky to appraise the correct value of your music (especially for those who don’t have representation to help), I have learned effective practices along the journey of starting my company and compiled a list of five tried and true tips to help you close a deal with confidence.
1 – Pick up the phone
With e-mail as today’s preferred form of communication, it’s important to remember the value a verbal dialog. A phone call gives you an opportunity to gain valuable insight into the full scope of a deal, and express your excitement for the project. This is where you can let your personality shine, and elevate the conversation to a position where you are working together, not against each other. Tone and energy are key to a negotiation and on the phone you can observe (and set) your client’s tone much more effectively than e-mail. In my experience, a happy and light-hearted approach is the path of least resistance to a successful deal. I make sure to start a phone call with a positive and friendly energy, which I find to be very contagious for my buyers.
2 – Don’t say the first number
SCORE A SCORE’s “name your price” business model has helped us succeed in an industry with inconsistent budgets. Let your buyer tell you the first number. This move will give you the best look into their comfort zone. If you have to say the number first, then you must ask all of the right questions to evaluate the deal. For us, we need to know how the song will be used, where it will live, the length of the term, and other specifics that will help determine a price point. The more aggressive the terms (all media, worldwide, perpetuity, exclusive, etc.), the more expensive the deal should be.
3 – Be flexible
If you aren’t satisfied with the proposed fee, it can never hurt to ask for more. Much of the time, the first number on the table is a conservative bid, and you never want to walk away wondering if you left money on the table. The best way to approach this situation is from a place of honesty. Of course, first and foremost, you must make sure that the deal is fair for all parties at its base line, and there’s no harm in simply asking if your buyer has flexibility to go higher. More often than not, there is. I want my buyers to know that I am flexible and that my top priority is to close the deal. I believe that to be a good and trustworthy negotiator you have to be a great listener.
4 – Chameleon Negotiating
Every buyer and deal requires a different approach and style. It’s important to be as perceptive as possible and to tap into your counterpart’s psychology. Always consider questions like: what does my buyer want out of this deal? What do they think I want? Are they motivated to keep me satisfied? How hooked are they on the product? And, can we work together to find the best deal?
Embrace your inner chameleon, but always stay true to yourself. Compromise is key, so you must be prepared to set your own boundaries and limits. Keep in mind the numbers and terms that you are comfortable with, and especially the ones that you are not. These will protect you from an unfair deal.
5 – Keep it transparent and keep it fun
I fully believe in running a transparent business in every capacity. If you have nothing to hide, be open with your intentions (for us it’s getting our composers the best terms possible for their hard work). Always exhibit trust, empathy and honesty (even for brand new buyers), and they will reciprocate.
A fun and easy deal is as memorable as a painful and stressful one. Never gouge your buyer for the benefit of yourself, even if you have the opportunity to do so. A deal where you make a lot of money and your buyer never wants to work with you again is a huge loss in the long run.
Business is a marathon, not a sprint, built on a foundation of trust – your reputation is everything. Buyers that trust you will end up paying you more down the line, and everyone appreciates honest business practices. A successful deal is one where both parties feel great. Find the middle ground where the value feels fair from all angles and you’ll continue to grow your business.