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Writer's pictureDominic Parker

Contra deals are dirty

Updated: Nov 10, 2023


You scratch my back and I'll scratch yours. It's a win-win situation for all involved. It's a reciprocal arrangement. Remember it takes two to tango. Except none of that is really true is it?


Contra deals pop up quite a lot in the world of media. When budgets are small businesses have to trade on their goods and services in exchange for something of equal value.

They can be hugely beneficial. But the world of contra deals is lined with pitfalls and dangers if not negotiated properly at the start and if expectations are not well managed by both parties.

I have arranged a number of these deals and have also inherited many when changing roles and I have seen a number of patterns emerge which has lead to me creating a mental checklist that should be followed in order for all involved to get the best out of the agreement.

CONTRA CHECKLIST

#1 Do you really need it?

Quite often there is a pattern of legacy around these deals. No one has stopped to think or review as to if it's actually working for them or if it's still relevant. The line 'because we've always done it' gets trotted out and no one says any more. Be brutal with these deals, make them work, if you can get revenue from a client get the revenue over the deal, what's in it for you as a business, PR, cash, branding etc. Is it right for you? Assess, analyses and question yourself before committing to each deal.

#2 Is it equal?

Partnerships are supposed to be 50/50. In fact, I think in some circumstances there is an auditing requirement to show how deals are split evenly. Always consider are you getting value from the agreement. This is not about hiking up your rate card and fleecing your partner(s) it's about balance. If it's one-sided don't be frightened to revisit the deal and fix this. Why give stuff away for free, you would just throw cash away, value your product/service and treat it with the respect it's due. If you give stuff away for free it devalues what you're offering.

#3 Can you deliver what has been promised?

The old marketing acronym applies here, KISS. Keep It Simple Stupid. Don't create vast plans that you're going to struggle to fulfil. Offer what you're confident you can deliver. If it's not much that's fine but at least you won't disappoint your partner(s) by over-promising and under-delivering. Understand the resource you have available to you before signing and impact any deal might have on that resource. Perhaps look to make all elements adhere to the SMART objectives formula, is everything Specific, Measurable, Achievable, Realistic and Timebound? Wow, two marketing models covered in one section!

#4 Is there a clear owner for tasks?

Each task within a deal should have a named contact and that contact should be aware of the tasks that they have the responsibility for. This will help with deliver-ability, accountability and communication to ensure projects meet expectations for all involved.

#5 Is there a clear deadline for fulfilment?

As with #4, a clear and realistic timeline needs to be circulated. Allow your team time to know what is needed of them and when. There are plenty of workload tools available like Asana, Basecamp and Wrike which help with planning and assignment to ensure that notifications are provided for when to start the task, when to deliver the task and when the task goes live. Nothing should slip through the net because of poor planning.

#6 If something is missed what are the consequences?

All too often missed elements in a partnership are met with a shrug of the shoulders. if this is the case then it shows the value of the deal to the business, if you don't care about it then why does it exist. There needs to be a clear understanding of what happens if something is missed or something goes wrong. Sometimes errors happen and that's ok, but hold your hands up, and make it right with something of equivalent value or higher as compensation. Don't just hope no one notices.

#7 Deals should last no longer than a year

Priorities change, businesses change, technology changes and therefore what you want out of a deal will change. There is no point tying your company into a three year deal with lots of direct mail production commitments if halfway through that term your focus switches to a different promotional channel but you're already committed elsewhere. Keep the terms realistic to allow review and tinkering for both parties.

#8 Is there a review process?

If you don't review the deal at the end of the term how do you know it worked for you. Look at results, look at effort, look at time, look at execution, do you want to do it again and if so what can be improved or changed, if anything, in line with your business objectives for the new year.

#9 Are all parties involved aware of the expectations on them?

Linked to #4 have you discussed what you expect from all involved or is it all going to be a big shock to people. Involve your colleagues in discussion and make agreements with your partners realistic.

#10 Is the time spent worth it vs. the reward gained?

What's in it for me? How long does it take to do? Have you moved the dial on your company targets as a result of this deal? If it's been a sour experience should it continue or be reviewed? Be honest with yourself.

If you follow this checklist and are happy with your conclusions then it's likely going to be a good deal for you and your business. If not then it's time to start asking some questions.

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