71: Negotiations and Procurement with Mark Raffan the Negotiations Ninja

good afternoon everybody this is John Barrows with make it happen Monday hopefully y'all had a fantastic weekend mine could have been a little bit better my Patriots lost to the Jaguars and Jaguars actually had a great game so congratulations for that but regardless I am here with somebody I'm excited because I was on his podcast and it was absolute fire we had a fantastic conversation and now he's coming on my podcast and I really appreciate it so Mark Ratham with Negotiations Ninja say hi to everybody hello everybody I appreciate you coming on here and for those of you listening this the reason I enjoyed my conversation with Mark so much is because he comes from the dark side he comes from the other side I'm sure he would say the same thing about me Mark comes from the side of procurement all right and I the bane of most sales professionals existence is procurement right we go through the whole sales process value value value and then we end up getting the shit kicked out of us by somebody who knows negotiations better than we do and we're almost at the end so we'll do almost anything to get that deal and and you know a lot of power is being held there so Mark and I are going to have that conversation one from the procurement side one from the sales side hopefully we'll flush some things out here but Mark you want to give everybody some a little bit of background about where like really where you're coming from and why you're doing what you're doing now yeah you bet thanks for having me on John I really appreciate it um so my background is actually mostly procurement but I actually started out my career in sales so ran out of university um got a sales job in online ad sales did that for a couple years did very well um paid off all my student loans and then realized that I wanted to have the hammer instead of be hammered so I uh I moved across to procurement and grew my career in procurement started off as a buyer worked my way up through category management and we'll get into the differences between different types of procurement people and I'll tell you why that's important to know the difference um led a few category teams and then at a certain point decided I was getting bored um got really really really bored and started up a blog which is the negotiations ninja blog and then was having a few beers uh with a few friends and complaining to them that there were no great procurement negotiation podcasts out there and then as these things go we're two or three beers in and they said well you should start one and I said no no I can't do that and then we had a few more beers and then I decided it was a great idea and did zero research whatsoever on it um and jumped in head first into creating a podcast and I think if I had done the research I probably wouldn't have done it because of the amount of work that's involved and um scripts and all that kind of stuff so I'm I'm really glad that I didn't do the research so now yeah now here I am I I run the negotiations ninja podcast and then I launched that into a training business and now I teach procurement and sales teams how to negotiate I love it man and that it's funny you have a very similar story from a podcast standpoint you know I was doing these facebook live sessions to try to engage with my audience like to show more value whatever and the idea was like it was going to be an office hours right where hey ask me anything because I get requests all the time and it's like you know what 12 30 east coast just ask me anything I'll answer whatever questions and it started to do all right but but then I was like oh let me get some people on here to have you know doing whatever and then all of a sudden lucas who helps run my podcast he's like hey we need to do it I'm sorry yeah he runs a lot of my social stuff he comes to me and says yeah we got to do a podcast I'm like dude like there's only so much time in the day that I have I'm on instagram stories I'm on snapchat I'm writing blogs I'm doing this I'm like freaking podcast right and so I was like you know what let's just rip the audio from the make it happen monday live broadcast and turn that into a podcast and see what happens and we did that and it exploded like we're over I think 200 000 downloads we get like 50 000 a month right now and it's like less than a year and a half into this I had no idea your point if I had really researched and thought about all of this stuff I probably wouldn't have done it but now I'm like shit glad we did it um anyways let's let's get to the value here because I do want to start off like oh we had a I think we had a fantastic so I'm going to point everybody to your blog and your podcast there's there's two blogs that I tell everybody about these days that I learned from uh one is uh the gong blog that one is absolutely fantastic in my opinion because it's based on data uh and the other one is yours because from a negotiation standpoint you know negotiation starts from the minute we engage and if we don't realize that all the way through we're going to get our assets handed to us at the end so you guys are the two um so let's start with this though let's help under help everybody understand I don't want to start like 101 level here but I think we need to because I think there's a misperception of what procurement is who what types of procurement are they and then we'll get on how to deal with them so could you help us understand like what are the different first of all what is procurement in your definition what are these people usually held really accountable for not what they tell us they're being held accountable for and then what are the different types of procurement let's start there because I think that'll baseline the rest of this conversation okay yeah so it is it is a common misperception about what it is we actually do so procurement people can really be split into a few different areas let's just start with the overall basic definition so procurement is responsible for buying procuring the goods and services for the given company that they work for right so for example if you were selling services or goods to that company the person who represents the business who wants those goods and services is the procurement department so in its most basic form that's what we're responsible for um but when you think about what it is you're buying you're not just buying a good or a service they're also responsible for getting quote unquote best value so what does best value mean it could mean a lower cost it could mean lowering risk it could making be making sure that the goods arrive on time so on time delivery um it could be lowering the terms and condition risk that is associated with the procuring of the goods and services so there are a variety of different things that they're responsible for to make sure that the company gets what they need when they need it for the right price at the right risk level actually pause there for a second so that means there's risk for them absolutely yeah if they make the wrong decision or if they don't check off some of those boxes they're not the person that wanted it the person who actually buys it their ass is on the line if they make a mistake and get something that is you know say some bps sales is like i want training i want training blah blah blah and go go do it and procurement's like okay and they miss the you know the long-term investment the renew you know those type of things and it actually fails does that come back to procurement as far as like why didn't you catch this yes well yes i mean ultimately every procurement person will tell you that procurement always gets hung out to dry if a decision doesn't get made properly ultimately they're not the ones that are going to be signing off on the deal right so when you think about the power line and the decision level uh in sales they're not the ones who are going to be signing off on you know whether or not the business gets it ultimately there's going to be a business person behind it unless of course they're the department that's buying it for themselves for example right so um they're not the ones who are going to be signing off on it but they have significant influence over the decision because it's their job to make sure that the business gets full purview of what's included in the deal um in terms of scope and all that kind of stuff as well so to a certain extent um yeah if something happens or something goes wrong procurement does end up with a lot of the blame and i think this is that's important to understand from a sales rep standpoint because and i don't want to say leverage that but look we there's a a certain point where we can empathize and work together to make sure that both of us ultimately with negotiations are getting what we need because i think when we come down to the tactics part of this conversation you know if they're going to pull something out of if they're going to reduce the price by x and i pull something away that's going to have an impact on the total value yeah then they're the ones who are you know we can have that logical conversation that says look i'm happy to bring it down to that level but if you take this out of it then it's going to impact the results and therefore you're going to be the one who's going to get right i mean we can play around with that a little bit totally yeah and it's you know when we get into the discussion of how do you negotiate price or should you negotiate price or should price be even part of the conversation and how do you attach it to scope there's there's a lot of things that i think your listeners could learn about in terms of linking and trading in terms of um how to attach value to certain things to make sure that you're not giving up more than you should yeah i mean and that's all right like we can get it like our whole negotiates about gives and gets all the way through yeah let's back up a little bit more and talk about the different types of procurement because i think your point is valid of anybody who's ultimately responsible for buying what you're selling so that could be a business owner of a two person you're a procurement right now you're a one person show you know if i'm trying to sell to you you're i'm procurement you know that type of so what are the different types of procurement that sales reps need to be uh on the lookout for or should understand at least so it depends on the scale of the organization and the maturity level of the organization that you're selling into so at bare minimum you're probably going to be dealing if you're doing any kind of b2b sales you're going to be dealing with a buyer so that could be actually their title i am a buyer for example buyer in industry in procurement industry terms is sort of like the the fundamental frontline um level of procurement where they're doing you know they're buying goods and services three bids and a buy kind of deal um they're cutting po's they're looking at sometimes reporting and then reporting up into the organization they're sort of frontline um when you think about it so what's an easy comparison to the sales world like a like an account exec maybe that would probably be like an entry-level account exec that you would have to deal with um and then move it up a level you get into if the buyer is successful and they're doing a great job sometimes you can move into different streams of procurement so another stream you can look into strategic sourcing where they're actually strategically sourcing for the business on an ongoing basis so they get a job of like i want you to go and source these goods and services um from anywhere in the world just to make sure that we get best value for example then there's another stream or potentially on top of strategic sourcing which is called category management which everyone talks about right now um category management manages your purchases in streams of categories so basically verticals think of it as verticals um in the sales sense of things so if for example i'm you know procuring things for an industrial company my category could be mro or if it's um a software company what's mro just to make sure that nobody's listening oh um so maintenance repair and operations so mro is mro is like um easiest way to think of mro is like safety gloves safety gloves safety glasses um ppe those kinds of things in any kind of industrial sense um some common term is soap rope and dope just really easy tactical purchases that get made over and over again so that could be a category for example pipes valves and fittings or pbf could be a category software enterprise software could be a category um labor trade labor could be a category and so what usually ends up category or do they fall within those categories say that again are renewals a category or do they sell renewals will fall into like for software for example renewals will fall into the software category and usually you'll get a renewal manager who reports into a software category manager all right cool um and then they manage their ongoing renewals for that that category and then there's so there's those categories and then there's the personalities within those categories we were talking to this before we jumped on you know um we were i was having a really interesting conversation about sophisticated buyers versus unsophisticated buyers right where you know you and i if we know we want something as a business owner we do our due diligence we do our google search we watch a couple of videos and by the time we get to the vendor it's like look just show me this and if you show me that you know i'll move forward if you don't if you try to drag me through your whole sales process i'm going to get pissed off and probably bounce right right so there's that type of person then there's the unsophisticated buyer which is yeah i've really never made this type of decision before blah blah blah i'm just kind of looking around and your approach to them obviously differs right so same thing with procurement and i and i when i say sophisticated buyer i mean like an actual like sales vp or something like that not necessarily the buyer that you just outlined there right but um but there is the sophisticated actual buyer procurement person and the unsophisticated one who has a lot of experience who's been in the industry for 20 years knows every trick a sales rep could ever throw at them and then there's the unsophisticated or a front line um is that basically fall into those two camps or are there other layers to that yeah kind of it's it's it's tough to draw a clean line between like a buyer and a category because you may get a super experienced buyer that just hasn't moved from that position and they may be really really good at what they do may have as much skill as for example a category manager but the whole idea behind category management is to develop subject matter experts within each category so that they become that quote unquote sophisticated buyer right so um yeah so the short answer is you're gonna have people who who have no idea what they're buying no idea and they're really looking at the salesperson to guide them through that process and quite often the business that they're representing also has no idea what they're looking for they know how they have a problem and they know they need to fix that problem but they don't know how to fix that problem so for example when they go out to like rfp for something like that and it's a really broad scope and you're like man what is this person actually looking for chances are they they don't know and then you get a really sophisticated buyer that understands the problem understands how to fix the problem and knows three four companies that can fix that problem for them and knows how to develop the scope with the business to do that um so yeah there's a massive difference between the two so the unsophisticated sales rep maybe that you know the kind of younger sales rep that hasn't had 20 years of getting his ass kicked by procurement to learn um are what are some indicators or what are some things that you can you know you know what what view would you put on to identify who this person holy shit those are versus the bravado person that's just like give me the price you know what i mean because a lot of times somebody will come in and pretend like they're sophisticated and say look just tell me how much this thing costs you know if it's in the range then we can go and really all they're looking to do is get a price so they can throw it on a spreadsheet and tell their boss they evaluated three vendors yeah yours versus the person that it's actually the sophisticated so is there any indicators that you or suggestions or techniques that you could suggest to a rep to uncover that and then we can figure out how to adjust both yeah i think it i think it comes down to the quality of questions that a rep asks right so i mean if we if we think of the question funnel and how you ask questions through the funnel you start with your open-ended questions right so when you're starting with your open-ended questions and you're asking a super open-ended question like tell me about the challenges that you guys are facing with regards to x problem that you're having and you know how do you see our solution fitting into that problem the the quality of answer that you get out of that will very quickly tell you whether or not the person that you're dealing with actually knows what they're talking about or whether or not they need to bring in the business to describe what the problem is so you just get on some because i talked about one of the hardest things to do in sales is to go over somebody's head without pissing them off okay like you're here below the power line how do you know this person isn't going to be the one that makes the decision but you have to get up here how do you do that gracefully one of the ways that i always suggest is literally ask them questions that they don't know the answers to and i say that not to be offensive but to genuinely understand because i always say look when you're a ceo well you're the ceo but in a company if you're a ceo when they stood up in the beginning of the year and said these are the three things that we have to do this year to be successful if i cannot tie my solution to one or two of those good luck trying to sell anything of significance right so when i'm way down below the power line i'll usually ask so hey just out of curiosity when your ceo stood up in the beginning of the year what do they say those and what are the what are the metrics that you're going to use to evaluate whether this solution aligns with those and justify that yeah a lot of times these people down here literally have no idea about the kpi conversation about the true impact and those type of things it tends to open up a conversation to go up there is that a is that a pretty decent negotiation technique from your perspective yeah i mean i would and i would approach it from from really an from an altruistic standpoint of like you're the sales reps job is to deliver value right to deliver a solution so the only way to know if you're going to be able to deliver a solution is to know very clearly what the problem is and if someone can't communicate that to you then it's your job to find that information and it's your job to ask the the procurement person to say look i want to make sure that we deliver best value for you i want to make sure we deliver the best solution for you i need someone in here who can walk me through the technical aspects of what it is you're trying to achieve so that i can put something together that makes sense for your organization otherwise we're just throwing darts in the dark right and it's not going to work and you're not going to get what you want and i'm not going to get what i want and we're both going to be upset so let's make sure that we get someone in here and collectively come to a solution and be very clear that you're not trying to cut them out through the process but that you're trying to make it a collaborative holistic process because i think that kpi discussion what i'm learning more and more is that the the actual kpi discussion about what impact what kpis are you looking for this solution to impact is is to me what helps me understand the sophisticated versus the unsophisticated because the sophisticated buyer is going to tell you we need to increase our conversion ratios we need to you know we're targeting these markets and we have to reduce our sales cycle by 20 to be able to get to this point and raise our cost of this whereas the unsophisticated buyer is going to be like well you know we're really just trying to look for a better solution and and i think obviously i i give the information over here and i i kind of lead the conversation over here and that's where i think tell me if i'm wrong from your perspective this puts you in the driver's seat a little bit if you do it tactfully to help them make this decision and the challenger sale approach right like hey you know let me walk you through this because you haven't done this before i do this every day totally lead with insights right i mean essentially that's that's what they want you to do especially for someone who doesn't necessarily know what it is they're buying the thing about procurement people that i think a lot of sales people have to realize is they're they're not just dealing with one or two contracts a year some of them could be dealing with up to 35 to 50 contracts a year right so the the likelihood that they're going to know exactly what it is they're buying every single time is very very low which is why it's so important to lead with those insights and to drive that value collaboration conversation here's i know right so i understood so many questions um so one thing that uh a rep did that i thought was really interesting and it was when i was training p i think it was ptc he documented the whole conversation from like from the minute they engaged and qualified to the next meeting to the next meeting and also documented the price um concessions that he made so for instance at first it's our rate card and this many licenses for this cost then we decided that you wanted this many more licenses so we reduced it to this much and then and now finally this is where we are so he literally had like a three page documents that added up all the conversations along the way so that when it came time to talk to procurement he would actually just give it to procurement and see and say hey look see what we've done and almost like procurement would be able to just take that and just take credit for it all for instance move that upstream to their boss and be like look at all the stuff we've already done like that's how you know what i mean we started here and we got here even though they had nothing to do with it does documenting the pro how much do you recommend documenting the process throughout throughout the whole step and then how do you present that to procurement so they understand what's gotten them then to that point yeah i mean it's it's hugely valuable right so if you if you think about what a procurement person does on the back end they may not necessarily be signing off on the contract but they have significant influence over the direction of the signing of the contract right so so many people talk about then this drives me nuts about sales and we can probably get into like a huge conversation about this so many people talk about closing as if there's only one close and it drives me up the wall because throughout that process you're gonna throughout the negotiation process you're closing from stage to stage to stage and step to step and part of that process is for the procurement person to put together a very robust business case especially if it's a large purchase a very robust business case with all the terms and conditions that have been negotiated all of the price concessions all of the risk reduction identifying where everything is for the organization and then presenting that to leadership to ensure that they purchase it and then helping them to make that decision by saying look here's what we want to buy here's the risk associated this is how much it's going to cost this was the discussion that we had this is where we were this is where we got to so if you're able to influence that as a sales rep and help the procurement person build that story you become their trusted advisor so like we have this trusted advisor conversation all the time where sales is becoming the trusted advisor of the business don't forget that there are other stakeholders involved right so you're not just dealing with the business you could be dealing with operations you could be dealing with that administrative assistant you could be dealing with leadership you could be dealing with procurement all of those people all of those parties are stakeholders and you're doing multiple stakeholder negotiations and sales at all times so if you can become that procurement person's trusted advisor and show them how you help them to deliver value it becomes incredibly incredibly valuable what part of the what part of uh this that whole business use case is the roi calculator and i'm gonna i'm gonna present my disdain for the roi calculator and hope that you you can bring my faith back into it like every time i've used an actual roi calculator was like how much time even if i've made it so transparently objective that i you know that i gave it to that person to me it's always like a yeah yeah yeah but it seems to be a piece of the it's obviously a piece of the puzzle i think it's not the puzzle too many sales reps think it's the puzzle but i just call bullshit i mean once a client asked me recently to put together an roi calculator for my channel i was like really you really want me to do this fine and i literally put it out there and the number was so absurd at the bottom i put 85 percent bullshit factor literally in huge words i put 85 percent bullshit factor and cut 85 percent of it off as an 85 percent bullshit factor you're still getting value out of my solution so how much weight does procurement put on roi calculators by sales reps that's a that's a that's a tough question to answer so let me i'll break it down so a procurement person a sophisticated procurement person doesn't just care about cost they care about what they call total cost of ownership or return on investment right so if you're thinking of total and total cost of ownership is such a misused misunderstood term but if you think about the total cost of actually procuring something it includes the risk and the cost of actually the price it includes the delivery it includes you know everything that's associated with procuring that it could include like if you're displacing an existing vendor it could include the switching costs that are involved with getting rid of that vendor and how much the organization has to absorb so there's a number of different factors that could be included in total cost of ownership so when you're presenting an a return on investment you have to consider and this is very difficult because sales reps would rarely get access to this information you have to consider the total cost of what's being involved in that entire process right so it's having an roi sent to a procurement person helps the procurement person as part of their overall discussion with leadership because then they can take that and go okay well what what in here actually makes sense to us what can i cut out as bs and like there's no way we can place a value on this and then how do i tie that into my total cost discussion so for example um like if you were going to say you were selling software and your software was so efficient that it was going to reduce the fte count from you know 10 people to five people over the course of a year that is savings that could potentially be real but it won't be realized until those ftes are then moved on to different positions or whatever right so they'll take that information with a grain of salt and say okay let's just say there's a 30 bs factor in this and present it to leadership and then the leadership or the business unit should be able to look at that and go okay does this actually make sense based on the information that we've seen is this actually possible so a sophisticated procurement person should be having those conversations with their business to say you know here's the roi that's been presented does it make sense it or is it nonsense and then if it's not nonsense then yeah let's take out the stuff we want and include the stuff that we don't want but they should also be including sales in that conversation to say here's what we realistically think we can achieve yeah we appreciate that you're in sales and we appreciate you're excited about selling this but this is what's actually going to happen yeah because i think the you know i think a lot of sales are just getting a little bit too focused on the roi discussion and not the value conversation yeah so they'll be like oh but you know you said that this would save you two hours a day um of your time so two hours times five days a week that's 10 hours times 50 weeks that's 500 hours well what would you do with that 500 hours you know what i mean and and you make a hundred thousand dollars a year so that's really worth you know 10 whatever that number is and it's like yeah okay kid you know thanks but inevitably you give me two hours back and i'm immediately going to fill with some other shit that's probably not going to you know what i mean like i'm not that minute detail i mean yes it gives me a little data point to say okay that makes sense but i think so many reps i find get so caught up in that but but but but you know what i mean versus you got that that real tco conversation and understanding cost of switching understanding the risk associated with it to their business like i used to sell outsourced it services and when we would make a change i mean look sales training you screw up on sales training you screw up on sales training people don't like it you don't hire me back right but when you're managing networks and infrastructure if we screwed up on a backup i mean we can literally shut your business down if we screwed up so that risk factor even if we were cheaper quote unquote to to their compared you know to their current situation they would look at me like yeah dude but cost of that risk not even like not even worth it yeah close on time here do you have a few extra minutes because oh yeah oh i'm good all right perfect um the one i wanted to really address is when to engage with procurement because too many sales reps go through the whole sales process and they're like oh great they get the decision criteria the butt you know with the butt with the decision maker quote unquote and then the decision maker will say all right cool and then they get flipped over to procurement and now it's like they're starting from scratch and they miss their forecast because they forecasted for the month that the buyers that the decision maker said that they were going to say yes but now we're stuck in legal hell we're stuck in procurement hell and now we're so close to the end that we're we're almost willing to do almost anything which is how procurement takes advantage of us is we're willing to do anything to get the deal done because we've already we're 90 we're at the finish line so this is where we give up the most concessions this is where we give up the most whatever it is so what is the best way and when sure well let's start with when should the sales rep get procurement involved and what are some of the things that they can do tact tactfully uh and tactically to to do that without being like hey i know procurement's gonna be a pain in the ass when we if we decide to do this uh can i talk to them now so it's less of a pain in the i mean that's the conversation i actually want to have but how do you do that tactfully i i think you kind of hit it back on right like you can deal with them later and deal with their wrath later or you can deal with it early and make them involved in the process and have them feel like they're a trusted part of the entire process um procurement's not there to fuck anyone there's there's there's this like weird weird misconception about procurement being you know just there to hurt people and i mean i'm not going to say that that's entirely wrong there are definitely those personalities out there but procurement's job is to manage the risk and value for the organization right so if they haven't been think of it from their perspective if they haven't been involved in the process from the beginning and you involve them at the end and they have no idea what's going on they're going to be like well in order for me to fully understand what's going on and to make sure that i'm helping the business make the right decisions we're starting from square one so you you can have that conversation at the end or you can have that conversation in the beginning and get them to help you go through that process because having them on your side and becoming their trusted advisor through that process is only going to help you even worst case scenario so everyone thinks this is a worst case scenario which always strikes me as odd but even worst case scenario for a salesperson they move all the way through the process and then even if the procurement person is dealt with from the beginning then they get to an rfp situation the procurement person says we're going to rfp we've really realized that we need to go to market for this solution whatever it is that is like in my mind as a procurement person for the salesperson that's like best case scenario because you've essentially had this entire process to write the rfp and so when they release the rfp then you're going to be like well this is what we talked about and you can send in a proposal that matches exactly what they need so in my mind i think it's critically important to involve procurement from the very beginning because then you can come to a solution collaborative that makes sense for both the seller and the buyer and and everyone wins when you involve them too late it it almost becomes a situation that you're you're putting yourself into a harmful situation um and and really at the end of the day you've only got yourself to blame and and this is a this is an issue that procurement people face a lot where their own business partners will cut them out of conversations until the very end and now we've had to like start back from square one which further reinforces the you know stigma that procurement are jerks and all they want to do is take value out of the deal meanwhile if we had had this conversation at the beginning we wouldn't be you know necessarily in this point so what should i look for though because i mean say say i'm selling you right now and we're on the we're on the discovery call and it looks like you're interested in my stuff like you know and and say it's a say it's usually two or three stakeholders in a decision average deal size a hundred thousand dollars give or take um initial call call then kind of the presentation of the solution where does it make sense to say hey mark um you know i understand you know these other people need to be in steps here like where does it make sense to insert that hey can i talk to procurement or can i engage with procurement so i mean if we're thinking from the software perspective which i know that a lot of your listeners are sas sales people and software sales people so let's use that as an example so if we're thinking from the software perspective i would say from point of demo is where you're going to include the procurement person if you're thinking of other categories i think it changes slightly um it could be from point of presentation where someone comes into a presentation and presents a solution but it's not going to be at the point of cold call obviously it's not going to be at the point of um exploratory discussions but it probably would be from the point of demo okay so say i so i've i've qualified cold called i've qualified yeah you're qualified to the extent where now it's not just going to be a press to play demo but it's going to be a demo like it's like i'm showing i am showing you a tailored demo to your solution right you'll be a sales or whatever who's kind of the decision maker what or i'm say say you're trying to sell to me we're at that stage i'm ready for your demo literally what are the words that you would say to me to make to get me to say yeah it's worth bringing procurement in right now there isn't just hey can we get procurement involved is there is there especially where you would phrase it to show the benefit to everybody involved of getting somebody on the procurement side of the house into this demo if i was a sales rep yeah if you were selling to me right now and we we went through the qual call and i was like yeah you know what i definitely want to see a demo and uh i'm probably going to have my uh my director of it in here with me so that they can see it too um so what do you want to schedule that's a number of months later what would you say to me to get procurement and it wouldn't be like dude like that we're up that's way down in the cycle here we're not at that point yet yeah so i think it's critically important that sales always remembers the multiple stakeholder groups they're selling into right so i wouldn't just ask for procurement i would also ask for any kind of pms that may be involved in this kind of a project regardless of what it is so my wording to you would be john fantastic i'm so looking forward to doing this demo with you and because we like to be a collaborative organization we want to work with all the stakeholder groups within the organization that we're selling into we want to make sure that everyone is present at the meeting that has influence over the decision ultimately or has some sort of play in the discussion so usually that's someone from finance usually that's someone from procurement usually that's someone from project management or pmo can we include those people in the discussion during our demo please nice that's it last one um i'll ask champions how much do champions impact procurement in the sense that uh again you're the vp of sales for me i sell sales training to vps of sales my perception is procurement left unchecked we'll do what they are told to do just like lawyers are lawyers are taught to cross every t dot every i and protect the company at all costs unless somebody from a business unit usually you know a senior level executive comes in and says look just make sure that we're covered on the basics i need this done procurement without going unchecked they are kpi based on certain amount of things risk you know all that stuff so they will check every box unless somebody comes in how much of how much of a influence does a champion a real champion have on procurement to get deals done massive okay huge enormous influence and i mean it it's kind of a misleading answer to give you that that way so i'll break it down into two areas so it really depends on the influence that procurement has in that organization um and the strength that procurement has in making deals happen so depending on the leverage that procurement has in that organization it like i've been in organizations where a champion has come through and said listen let's make sure that we get this deal through i just want to make make it move and procurement basically says well that's very nice i'm glad that you've identified someone that you want to work with awesome what problem are you trying to solve and so they'll go back to the beginning of like okay are we actually making the right decision which is exactly the conversation that should be happening um so it depending on the leverage right so but then in other organizations maybe procurement has less leverage and less influence in the discussion and a champion will come up and say uh we need to get a contract done with these guys and then you say all right let's cut a po so it it depends it depends on the influence that procurement has yeah and i think that i mean i slammed into that so i was selling hp and this was back when mark hurd was the ceo of hp and he literally turned hp into a procurement shop period if procurement didn't want it it didn't matter how much the business justification was for it no no business leader could get something stuck through procurement at all and so you know which isn't a good thing you know it's not a good thing for either one to have too much power because what ended up happening was the the business owner or the business you know the line of business guy he ended up subverting them all together and just put the whole thing on his credit card yeah just don't lose his expense you know what i mean it's like because they know that's such a headache that you know what fuck it i'm not even going to deal with procurement john throw this on my credit card i'll expense this somehow else and then we'll i'll get in that argument later but we need this now right so yeah i mean that's a stigma that we continue to live with right i mean being the you know the the arbiters of spend so to speak it it sometimes make us makes us a bottleneck especially if there's too much coming through the organization at one time which is why you'll see a lot of procurement organizations set thresholds so for example i've worked with organizations where if it's less than 500k we don't touch it whatever who cares make a decision cut a po do your own little simple contract not a not a big deal but then there are other organizations where procurement people touch everything um so it's it's incumbent upon procurement to make sure that they're not becoming the bottleneck for the business to do business because that's that's not our job our job is to facilitate business transactions and to make sure that everyone's making the right decision and if we become something that slows down that process especially when you're thinking of like fast moving sass based businesses um then that's that's bad uh so we need to find ways to become more efficient and more effective and definitely technology is helping us get there we're not there yet in a lot of circumstances but we're we're getting there i love it because i i always say to people you know go back to challenger sale you can't be a challenger if you're closing on your timeline and your priorities like if you got to close the end of the month because you got to you got to hit your quarter target then you're just an asshole but if but if i find out genuinely what your priorities are and what your timeline is yeah now i can be challenger all day long because you're the one who told me that we need to do this by this date and and that kind of leads to i promise my last question here um is uh you know i think obviously there's a benefit to procurement when it's when it's an evident no real compelling event that we don't need it by this date but the sales rep you know needs to close it by the end of the half of the quarter or whatever and we know all those dates what's that and we know all those dates oh i know you do right and so there's nothing but a benefit to have that procurement be silent silent silent silent silent silent until the last day of the month or the last day for renewals those type of things because now i have all the leverage okay what i always try to say like if you're going to give a discount for instance don't just give a discount to say oh and agree that they'll sign the contract like make sure there's a give and get there i try to say look happy to share with you you know let me go see if i can fight you on that discount would you be able to close the week before the end of the quarter or something like that so it's not just a get for the contract because everybody knows the end of the month comes you have your stuff that you're dealing with just like we have ours so shit happens and you're not the priority so then but then on monday oh sorry i missed the call sorry on market you know yeah now we're ready to go uh can i get that discount again and everybody knows that the discount doesn't go away over the weekend you know what i mean it's like what did your profitability change over the weekend shut up fine i'll just wait until the end of next month so is there a benefit to to procurement when there's no real compelling events is there something i can say to you that says you mark you look you know i know you said you want to make this decision by the end of the month here and you want to have a go live date by this you know there's nothing really pressing for that you just kind of have a nice clean one there can we make sure that this happens before the end of the month so we're not panicking there last minute and and obviously you know what my goals are here and i know what your goals are there is there anything that's like legitimate that i could say to a procurement offers that that gets them to sign before the last day of the month where they have every leverage they could possibly imagine on me yes so short answer is yes so a couple things um from a procurement perspective you're putting yourself as a salesperson you're putting yourself into you're painting yourself into a corner if you're waiting till end of month to negotiate a deal like the one of the things that i love that you say is um the the bet the most leverage you can have in a negotiation is a full pipeline um and that's essentially the position that you need to be in if if i know that you need this deal i will wait you out all day long and i will take every penny you have to make sure that i can close that deal because why wouldn't i why wouldn't i if if you've already exposed yourself to me you can't blame me for taking advantage of that situation so you've got to make sure that you've got more in the pipe coming so that it's not a rush and it's not a stress and that you are closing on my timelines for example if there's an implementation timeline that we have to there so there's there's two questions that i think so many people get wrong is number one when does the decision need to be made okay number two um when does the implementation need to take place those are two different questions but so many people get them confused a decision may need to be made now but an implementation may need to be made in six months from now so or the opposite i'm gonna throw one more on there which is and what happens if it doesn't exactly exactly so there's a risk to not making a decision so if you can understand those three questions and the answers to those three questions it gives you as the sales person more leverage in the discussion so that you can actually work through that negotiation don't tie this is more difficult it's easier to say than to do but don't tie your concessions to your end of quarter end of month end of fiscal conversations because you're just in for a world of hurt rather link concessions to something of value so for example if if a procurement person wants you know a discount on you know x licenses or whatever it is that you're buying then tie that to like if you're bundled a full thing that there's there's a bunch included in that bundle strip out something from the bundle so that you can reduce that price don't don't tie it to an execution date because if you're tying it to an execution date then i'll just wait for that execution date and get more so it's it's it's it's it's tough because so many software organizations are so pressured by end of quarter end of month end of fiscal conversations and we've recorded all of those fiscal dates down so that when um you know a sales force or an oracle or whoever comes to the conversation and says hey we need this then we'll just say oh okay perfect and we check our fiscal dates and go uh all right cool and then we'll just slow it way down and we'll have the conversation at the end and to your point why wouldn't you you know what i mean i mean we all like to think and this goes to a blog post i recommend people reading which is the style versus substance one that you have you know we all go in hoping that you know we're reasonable people and i'm going to sell you something at a reasonable price and you're going to buy at a reasonable price for the features and that's just not the way it works people some people first of all want to negotiate they need to feel like they got something not just three cards so they're going to ask just because if they didn't they'd feel like they got ripped off um and and so there is a little bit of a game to be played here um now i try to be as as transparent with that game as i possibly can but you know there's still a game to be played yeah a hundred percent and and and don't like there's a certain personality that's attracted to procurement um and that does well in procurement and when you're dealing with that kind of a personality they don't care they don't care about your sales targets they don't care about your fiscal year and they care about getting best value for the organization um and if you're if you bend to that and you break and you don't have your pipeline full oh well i'll tell you right now the the i and i i've almost i think almost i my guess is 75 to 80 of the sales reps it's something like senior sales reps at some point in their career has let it slip to the buyer because they got comfortable with them and they thought they were boys or whatever they let it slip that said i really need this deal by the end of the month yeah almost every sales person says that i'm gonna beg everybody listening to this podcast as a final thought here never ever ever no matter how comfortable you are with a prospect never tell them that you absolutely need this deal or you need it to come in by the end of the week for your reasons because not only do i know i now have all the leverage but mark saying you and i were negotiating tell me if i'm wrong with this say we had great rapport throughout the entire negotiations right and and this is something you were gonna do right and but say you were gonna do it now in october because you just you just you have too much shit going on right now in october you're gonna do it you're gonna pay close to rate card for it and i come to you at the end of the third quarter right now and i'm like hey mark i know i know you said you were gonna close this in october but you know any chance you could bump this into september here because i can really use this deal to help close my quarter out strong what does your perception of me go to well like i i automatically know that i've got you in that situation but even that my my thing is like say we were cool right yeah all of a sudden are you a little disappointed in me yeah i'm disappointed in you as a salesperson because you haven't like you've you've basically shown me and so this is the biggest thing that procurement people like love and hate about sales people is because sales people are usually talkers right and procurement people aren't so all the procurement person has to do is generate conversation and ask you open-ended questions and probe for you to spill the beans on an ongoing basis and if you spill the beans then yeah then ultimately as a procurement person i'm going to be like ah what an idiot you know like what an idiot like now i'm now i have to take advantage of you now i have to take your money that's where like my fun so so what kicked off my my podcast and stuff like that there was i'm not going to name any names but i used to be doing facebook live so my facebook live sessions on my phone and this was before there was any tools where we could share on facebook live so i i kind of set up and i do my little tripod thing all of a sudden some kid paid me and he was like hey john have you ever wanted to bring guests on your podcast right i was like yeah i'd love to but i don't know how to stream it to facebook so there's two people right he's like oh we're all our solution does that i was like no shit right let's show it to me so i literally got on the phone with him immediately i was like show me how it does it and he did it and i was like cool send me an order right send me to send me the contract i'll send you light this up tomorrow he's like yeah no problem i was like fantastic sign it over right it was like 1500 bucks for one license that was only one license but whatever i mean the kid hit the holy grail he social sold me he understood what my needs were he crushed on one you know he he actually said i've been watching your podcast or you're listening to your thing for a while that this yes called done not even sophisticated buyer and then he it all up because he goes like this he goes oh john because we're such biggest big fans of you over here you know i wanted to give you a 10 discount just oh and i literally that's exactly what i said i go no no i'm like why why did you do that i literally just said send me over rate card and you crushed it kid like i was going to be a testimonial for you about how awesome of a sales process you were and now you're all up and my and i was so disappointed i was that's why i want sales reps to understand that discounting isn't the be-all end-all you ruin your reputation if not just like your perception of you by freely operating operating discounts because it tells me if you freely offer a discount that told me you're not priced at the right level yeah right and now i question everything about the value of your solution well and like how procurement people generate discounts is like okay so i know we don't have a lot of time can i leave you with one more thing yeah okay so there's in negotiation you you're not only using the words that come out of your mouth but you're also using your tonal inflection and your body language right so for example if you were going to go into a store and you found a coat that you really love and you thought man if this is under three hundred dollars i'm going to buy this beautiful coat it looks gorgeous i'm going to pick it up and then you see the price tag and you're like seven hundred dollars good god like why would i pay that much money that initial emotional feeling that you had that's the type of feeling that procurement people want to show you i mean they may not even feel it but they want to show that to you to generate that immediate first concession so when someone comes with something and says um and so this is a free tip for your sales teams when someone comes and says hey here's the price or whatever and you hear a procurement person go and then there's silence on the other end of the conversation the other end of the line a procurement person knows nine times out of ten the first words that are come out of going to come out of your mouth is but of course that's negotiable done we've got you at that point that's that's that's the declining conversation starts from that first point so just as a salesperson be very careful about um the not only the words that are being said but the words that aren't being said and and how you're emotionally attached to the response of the procurement person which is why it's so important to have a full pipeline right so that you don't get swayed by that emotional response what do you so here's just a little tip on top of that so silence is golden but um i've started to play around with what i delivered price to then ask a question afterwards so not to blast through it but to be like when you say john so how much does this cost and i say well mark it's going to be about thirty thousand dollars is that in line with what your expectations are for a solution like this or richard harris what he says is how does that make you feel what are your thoughts on like stating that because there's one thing that the negotiation tactic is name price and then shut the hell up and whoever speaks first loses blah blah blah right but i think there's you know that's a technique that a lot of people understand and so then it becomes a stare down contest and then it's awkward really so what i've had a little bit of luck with is to try to get your immediate response from something just to say you know what mark it's going to be probably give or take around thirty thousand dollars for something that we're talking about here is that in line with what your expectations would be for something that you know in in this range or something like that or again richard says how does that make you feel to try to get you so i would if you're going to ask the question afterwards i would ask an open-ended question instead of a closing question right so if you're going to say something like does that line up with your expectations you're giving them the opportunity to say no and so i i would almost follow it up with um other organizations have found that the investment required for the kind of value that we deliver is uh well worth it and how have you felt the challenges you know in terms of this price with other products like try and leave it open-ended because i feel like if you're going to ask them their opinion especially a procurement person who's default response is no um you're giving them the opportunity to say yeah no it's too expensive even if they haven't done the research so i i would almost prefer it that people just just stay silent okay and i know it i know it gets awkward and i know it sounds weird and like there's this stare down and like a little personal story i once had a conversation with an amazing salesperson probably one of the best sales people i've ever met in my entire life and they told me the price for something and then i i was like you know i did the whole you know thing and i stayed silent and then he stayed silent and then i stayed silent and then we were like staring at each other across the table staying silent not saying anything i swear to god it must have been two minutes that passed not saying a word i was like this guy he's not going to beat me at my own game i'm going to stay silent as long as it takes so then he writes down a joke on a piece of paper i didn't know what he was writing but he writes down a joke and he holds up the joke to me and i read the joke and i was like that's hilarious and i started laughing and then i was like man that's the that's the most hilarious joke i can't believe we stayed so silent talking about nothing and then you lifted up this joke and he said you know what else is hilarious how much value you're going to get out of this product and it was just like a total total segue to value away from price totally got me off the conversation and i was like this guy's amazing anyway he ended up spanking me in that negotiation basically took all of our money but it was a it was a great tactic so like even if it gets to the point where it's just super awkward yeah and and nothing is happening just just try and hold out i would rather have you do that than ask the question okay all right because i because i've been playing around with it right because i because there's the uncomfortable silence and i know that you know the problem is for me i always negotiate with like vps of sales right who are taught to to know exactly what that is so i usually end up fucking around with them i'm like look you know i'll tell them the price and then wait and be like look we can both sit here for the next 10 minutes knowing like doing the stare down contest but you know how's that you know yeah so if you're going to break the tension then break it with humor right like break it and just say look we're not going to sit here and do the whole silence tactic we both know where that's going to end up why don't you just tell me what makes sense for you does this make sense for you that then yeah if you're going to go down that conversation but then know where it is you're going to walk away so many sales people get into this same conversation and then they you know they get eaten down throughout the negotiation ground ground ground down and then they don't know where to walk away and then eventually they get to a deal where they they're stoked that they got a deal and they present that deal to their leadership and they're like hey we got a deal and then the leadership is like congratulations dumbass you like you tied us into a deal that makes us no money right and i'm not going to be able to give you commissions or they're going to be a headache of a client so that let's finish on that one know your walk away line yeah and actually i i recommend writing it down because too many people think they have one and then it gets too emotional once it goes past because there's always that feeling where it's not fair anymore and now i start doing self defeating things because i react poorly at that point i literally write it down and once it goes past that it's like hey thanks so much but to your point man you gotta have a big fat pipeline to have that confidence so with that mark i think we could have a whole day's conversation on this one um i you know i think um the idea of of working with procurement and i would just beg the procurement people out there work with sales reps just like you said you're not all assholes who are just trying to screw sales reps the same thing on our side we're not all jackass sales reps that are just trying to get a commission out of this like we really do want to make sure that that our solution does what it says it's going to do and we do bad things because we have bad things done to us in a lot of ways so let's try to let's try to work together a little bit more here uh mark uh negotiations it's negotiations dot ninja uh that's your blog but just if you just google negotiations ninja you'll come up anywhere else people can engage with you or anything else you want to share with the audience before we get off here yeah i'm super active on social so you can find me i'm very active on linkedin just under mark raffin um and you can also find the podcast on itunes google play stitcher wherever you download podcasts love it well everybody like i said you know there's two blogs that i always recommend every class that i go do training for it's the gong blog and negotiations ninja so check out mark he's got some incredible stuff i engage with him on social he's got great answers to everything and uh thanks again mark for coming on i really appreciate it thanks for having me john it was a real pleasure man all right everybody make it a great week let's make it out so so so so oh oh oh oh oh oh oh oh oh oh oh oh oh oh oh oh Transcription by CastingWords