Mark Raffan: Stop Discounting, Start Negotiating

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Now, today's guest is a repeat offender. He's my good friend, Mark Raffin, and he is the founder and CEO of Negotiations Ninja. And he's actually written a couple of books that we got into here. I highly recommend checking out his stuff. I've learned a lot from Mark over the years. For those of you who don't know who he is, he used to work in procurement on the dark side and then came over to sales and is now educating us all on how to deal with and negotiate with procurement, which most of us have struggles with. So I always like having him back on because he's super tactical, has great ideas, and that's what we go to almost immediately, including how most reps just straight up don't know how to negotiate.

And most deals, they're not really lost to competition. They're lost because in the last 10% of the deal, the rep screwed it up one way or the other. They didn't follow up or they offered a massive discount or, you know, they try to do some sneaky tactic to get things done and that's where deals get lost. And so how we really need to up our game and get back to the art of selling and understanding what true negotiations is all about because we've just gotten so transactional that we got to get back to what's real. So we did talk also about the silent killers of all negotiations, which is value leakage, procurement intimidation. So they're actually intimidated by procurement and premissary discounting, which is, you know, what I always talk about is the saddest thing out there is proactive discounting, right?

That actually ruins your credibility and a lot of things that you don't even realize. So we talked about whether it's better or not to educate the rep on where the financials come from or just let them be kind of dumb about it and just give them some structure there. So contrarian opinions on that one. And how does procurement look at ROI? And they look at it more as total cost of ownership and ROI is a part of the equation. So we talked about how to uncover that and how to present that in a certain way. And then one of my curious ones was reps always deferring to their managers, right? Whether the rep should hold control of the entire process or if they should say, well, I don't know if I can do that for you.

Let me go check with my boss, right? And there's pros and cons to each. And Mark gives his feedback on those, which I really appreciate. And then last but not least, we started to dive into a few of the nine secrets in his book that he's got coming out here that I definitely think you should check out. And lastly, talked about negotiation alchemy, which I'm going to let you hold on to listen to that one. So I hope you enjoy the conversation as much as I did. Let's make it happen. Mark Raffin, welcome back to the Make It Happen Monday podcast, my friend. How in the world are you? Thank you so much for having me, John. I appreciate being here. I'm doing great, man. You know, weather is turning in Canada.

So we're super happy about that. And things seem to be relatively stable and going okay. And hopefully the weather holds out until the summer. But usually at this time of year, we have a spring snowfall that just decides to show up. So hopefully that doesn't happen. Yeah, that's the worst. April, that's April for us here in Boston. It's like, there's always, you know, it's like, oh, 70, 80 degrees is brilliant. And then it's like, oh, it's 20 degrees and it snowed. What the fuck? Right? But May is usually all right for us. But awesome, man. Well, look, you got a new book coming out. I mean, for those of you listening to the podcast, Mark's been on a couple of times. I've known Mark for years.

Negotiation specialist came over from the procurement side, the dark side to try to train. The dark side. Try to train sales reps. It makes me sound very dramatic. Exactly. How to fight against the empire, if you will. But, you know, and we've had some real good conversations. I mean, very direct alignment, right? I mean, train negotiations a lot more tactically as far as like, you know, give gets and those type of things. And yours is kind of looking at it from the other perspective. Why now this new book? It's called Close Bigger Deals Faster, High Stakes Negotiation Strategies for Modern Sales Teams. Okay. So good question. Yeah. Why? Not necessarily a new book. Just a new take on what it is we're doing.

Still repping the existing book, Nine Secrets to Win Deals. And this is sort of how we're thinking about things going forward. All of this thought process, which is culminating in a lot of public speaking for me, is trying to help sales leaders recognize that, especially in this economy, sort of where we are right now, most sales teams are not losing deals to competitors. They're losing them, at least from what we can see, in the final 15%, right? They're losing them in the negotiation, post-proposal, because they haven't been trained to, quote unquote, hold the line, or learn how to trade value, or push back on procurement. And the truth is, is that because most deals we're seeing, most deals not die from competition, we're seeing them actually bleed out at the finish line because the sales teams, sort of, they get cornered, right?

They panic, they start slashing price, and that's not negotiating, that's not closing, that's conceding. And our biggest concern that we're seeing is that the sales people themselves would love to be able to fix this problem, but the sales leaders have been so trained on the opposite side of the conversation of, like, building pipeline and funnel, which is sort of where their lifeblood has come from, and they've focused so strongly on that, which is great, but they've neglected the back end, right? And so in the process, they haven't had a balanced education on the end of that process. They've definitely built pipeline. They've learned how to build pipeline. All of that is wonderful, and they have to still do that.

But now, they also have to worry about, okay, how are we going to manage this towards the end? How are we going to close this out strong? How are we going to retain margin? This is especially important for a lot of scale-up startup ventures that I'm seeing because VC money not only wants scale, but they also want profitability. And so we're moving into a stage right now where I think a lot of people, especially sales leaders, can't afford to mess up at the end here. Are they losing? So when you say they're losing in the last 10 minutes, are they losing to, when you say bleed out too, right? Is it these clients, like, they're getting there and the client just does nothing at the end of the day?

Just is like, yeah, you know, or pushes it down the dread? Or are they losing to a competitor, but not because it was a competitor, it's just because they didn't know how to negotiate. Yeah, both of those things are true. And real quick on this, on the preface to this is kind of what I've been preaching a lot about right now, which is the indecision issue with jolt effects, right? Yeah, 100%. So many people are moving so fast. It's like, almost no matter what you do at this point, people are kind of putting up their hands saying, I don't know here. So help me understand, is this a systemic no decision, indecision issue? Is it a, no, they're making a decision. The rep just fucks it up towards the ends and they end up going with somebody else who doesn't fuck it up.

Or is it, they fuck it up at the end and there's no decision? Yeah, I, I don't have any hard data to back this up, but I can, I feel like I can safely say that it's a combination of all of those things because budgets are tightening because of the economic cycle that we're going into. And because CFOs are becoming more and more weary and because of the tariff concerns that people have had going into this, which seem to be lightening somewhat, although today, well, yeah, I mean, look, it could be different tomorrow morning, five different decisions tomorrow. Yeah. So depending on how things go, we'll largely determine how people feel about that. But because there is so much indecision, the indecision has led to people just slowing down what it is they're doing.

And because, and that's not just an issue of the economic situation, but it's an issue of confidence, right? So like, if I don't have the confidence that this is going to drive the value that you say it's going to drive, this is going to do the things that I, you say it's going to do, then the default position for me is going to be to slow down. The default position for me is going to delay. Or to your point, the default position to me is going to be to reward the person who is telling me that this is going to deliver the things that I say it's going to, or they say it's going to deliver. And so what we're seeing is that there's three major silent killers that we're seeing right now. And like that last 15% is there's the value leakage, right?

So sales reps are over-focusing on pushing to get that yes, instead of building that confidence. And therefore they're under-preparing for the negotiation. I hate to say like moment because there's a series of moments, but they're under-preparing for the negotiation moment. So what ends up happening is they give concessions. So that's value leakage. That's the first thing that we're seeing. The second one we're seeing is procurement intimidation. Procurement is being mandated now and has been armed with significantly more influence and power because of the economic cycle that we're in, right? So CFOs have basically had a sit-down conversation with all procurement leaders and procurement teams to say, thou shalt, right?

And go forward and prosper. And so as a result, if your reps aren't used to this kind of a conversation, they're getting steamrolled by procurement because they just don't understand the motives or tactics, right? So decoy objections, a lot of guilt conversations, artificial deadlines, manufactured bids, those kinds of things. And then the third thing that we're seeing is premature discounting. Because they don't know how to deal with that pressure and that intimidation, what's inevitably ending up happening is that reps are offering discounts way too early in the process. Before the procurement person or even the stakeholder is emotionally or organizationally committed or aligned, right? Which is now taking longer because of these external forces.

So they're used to a faster deal cycle. And because they didn't have the chops before, they could kind of, you know, use discounts as a crutch to get through to close. But now because the deal cycle is going longer, they're trying to use that same crutch again, but there isn't even alignment yet. And so what ends up happening is they throw that out early and the whole thing collapses. So we're noticing like that value leakage, the procurement intimidation, and the premature discounting being massive issues right now. Yeah. I mean, I tell, I still say this all the time. I think that one of the saddest things that any rep does is proactive discounting. I honestly, I think it's the most pathetic thing I've ever seen in sales.

And it, cause it's a, it reeks of desperation and, and, and nine times out of 10, it's actually, it's not the rep's fault. It's the manager's fault. And the scenario is like, I'm pretty good with my quota for this quarter, but boss comes in and says, Hey, John, you know, we just need a couple more gears so we can hit the quarter target for us as a, you know, as an organization, any chance you can get a few in here. Hey, if you, if you offer some of them a 10 to 20% discount to sign this month instead of next month, you know, we can help them out. Like, what do you got? And it's like, I don't really feel like doing this. Like I've already talked to the client, maybe in a couple, you know, they're going to sign next month, but whatever.

And then they get pushed to, and then that email goes out that I wasn't expecting. You know, if you and I are negotiating, whatever, if we're, I'm feeling like, yeah, I'm going to move forward on this. And then out of nowhere I get, Hey John, I'll just, I know you're probably going to move forward in a couple of weeks, but if you move forward this week, right. And you literally go from being a trusted advisor, consultant, you know, all that fun stuff that we all strive for to a douchebag sales rep, like in one email. And not only does your value, but now all of a sudden the value of your solution goes down in my head, because if I didn't even ask for a discount and you gave me one, what now happened?

Like, first of all, a, where did you get pricing from? And B, what happens now when I ask? So you literally just gave me the authority to beat the ever living shit out of you. And because you turn from a trusted advisor to a sales rep, I'm going to do that. Even if I'm not in, I mean, that's just human nature for crying out loud. Forget about being procurement and trained to do this. Right. And if you do that, look, if you do that to a procurement person, blood in the water. Oh, right. Like it's, yeah. So here you're attracting sharks at that point. So let me ask you, I got a few questions here. We'll get into kind of the, the things in the book, but the, one of the things that I've been curious about is, is it important for, so I think business acumen is, is if there was one thing I'd tell any sales rep to improve, to improve their results, it's just business acumen.

Like learn how to speak the language of business, understand what a P and L is, understand what CapEx versus OpEx is, those types of things. Understand what roles in the organizations do. Hey, quick break here. If you want to see the exact spreadsheet and approach that I use to reassess my ICP and the one that I use to do it almost every single quarter and train everybody on, you got to join my JV sales membership. Go to jbarrows.com, click on individual training and use coupon code podcast 20 for 20% off. Let's make it happen. And I've said it before that I don't think sale, I think the reason that sales reps are so timid when it comes to price a is because obviously they get the shit kicked out of them all the time.

B it's because we live in a SAS world and well, most of you know, you and I, we work in a lot of SAS type tech companies and it is kind of like one of those, okay, Salesforce, it's $1,500 for the license for you to give me one extra license. Sure. This shit doesn't cost you 1500 bucks. You know what I mean? Like this is a cloud thing. So it's R and D I get that, but 1500 seems a little excessive for this thing. So I can have that argument with somebody who doesn't know where the pricing comes from. So what I'm getting at here is, is it important for a rep to understand the fundamentals of their pricing schedule and where it comes from, like why it's priced the way it is, the profitability of the business, basically a CFO coming to the sales team and being like, let me educate you on why our price is the way it is, what we invest in, what we do, right?

Is it important for that or is it better to be ignorant of that stuff as a sales rep and just hold the line at a certain level? The price is the price. The value is based on what, you know, what the outcome is going to look like. Yeah. So I feel like you need to have both. And I know that sounds like a bit of a cop-out answer, but here's what a procurement person would be looking for if you were going to have the conversation with a procurement person. Now, it depends on the maturity level of the procurement person, whether or not they've worked in SaaS for some time, especially if you've worked in service delivery or you've worked in materials or you've worked in machinery or something like that.

Procurement people build things called should-cost models. A should-cost model is this idea that they can look at the thing that you're selling, whatever that thing is, break down the cost of that thing, add on specific pieces of margin or profitability or overhead or whatever it might be, and then figure out, based on where the market is, what this thing should cost us. So let me give you an example. Like if I was buying a consulting labor hour, so I was hiring EY or PwC or whomever it might be, I can, with a large degree of certainty, figure out plus minus 10% how much I should be paying based on the base wage for that kind of person in that geographic area, plus any kind of WCB or workers' compensation or retirement benefits or state uninsurance or federal uninsurance, plus a reasonable amount of profitability, plus a reasonable amount of overhead that the company that's issuing that person takes off.

And so I can figure out a rough should-cost model. Where that doesn't necessarily, that translates almost exactly to materials and equipment, et cetera, because I can break down those things too. Where that doesn't translate across to is SaaS, right? It is really hard for any procurement person to figure out what the should-cost model on it is because the reality is that 95% of what it is, is being quoted, is profitability to a large extent or overhead of some kind that gets pumped into some sort of R&D or something like that. So if there is an opportunity for the CFO to tell the salesperson, like, here are some of the rough components about how our pricing is made, let's be frank, the pricing is not built on a cost build-up model.

It's based up, built on a market model. But if the CFO can give the salesperson at least some sort of ammunition for that salesperson to have a rough, educated conversation with a procurement person or someone like that about here's where the money goes, it's certainly going to help the conversation that they have with the procurement person. Because the procurement person, as much as they've been mandated to save money and mandated to reduce risk, also just wants to know where the money is going, right? Like, if I'm going to spend the money, what's it being used for? Are you using it to pay the people? Are you using it to invest in R&D? Can I be confident that I'm going to get better technology in the future?

Are you investing into your product pipeline? Like, how does the conversation go? But we all know, all procurement people know who have worked in ZAS that it's not a cost-up model, it's a market model, which means that we know that a large portion of the pricing is profitability or overhead. So how does that play with, because I think there's an alternative way of looking at how to educate a rep. Like, I think one of the things that you, in one of our conversations, I think you're the one who brought this up about the impact that 1% of a discount has on the profitability of the actual thing, right? And it's like, I think most reps think, oh, 5%, 10%, whatever, it's, you know, a couple percent here, two, three, four, four.

But if you actually start to look at it from an economic standpoint, and the impact that a 1, 2, 5, 10% discount has on the actual, it's not just less than 10% discount now is, you know what, like a 10% discount is now 10% less profitable. It's actually exponential when it comes to adding all this stuff up, right? So I think coming out of- Because you're taking the, like, when you're giving the discount, you're not giving the discount on really the, just the overall revenue that you're getting in, right? There's still a cost base there that has to get paid for, right? There's still overhead there that has to get paid for. There's still R&D that still gets invested in. There's still all of those things that exist.

So what you're really discounting is the profitability of the deal. And when that gets extrapolated across, you know, when Benioff goes to the market and says, hey, this is how we're doing, that's when that gets impacted, when he sort of advises market on how things are going. And that's where, like, that's why, like, the lifetime value of a customer is so important, right? Because usually the first year is, if you break, and a lot of SaaS companies are regular, if you break even your first year on a customer, usually you're doing okay. It's the second and the third years that you get your real profit. So that's why negotiation, like, okay, fine, I'm willing to be a little bit more flexible if you lock into a three-year contract, four-year contract, because now I can predict my profitability as it relates to, versus giving you a big discount just to get you in the door.

And then next year, when we go for the renewal, that's now your base. You're not going to remember that I gave you that discount, and now I'm going to try to upsell you on, you know, try to get more. Yeah, it's so hard, man. This is the conversation I had the other day at the, I was at a, what was it, at some sort of CRO summit. And the conversation was, well, like, we'll just discount to get in the door. I was like, yeah, and then what happens at renewal, right? Like at renewal, you've now screwed whoever the rep is, who's going to try and secure that renewal. Because if you're going to discount to me at like 30% or 40% as a procurement person, this is where we are now for forever. And so for you to even add an additional 5% or 10% to that, it's going to be really, really hard to do.

So a lot of reps feel like, oh, you know, look, land and expand is a great strategy. Don't get me wrong. I think it's really, really important to the overall strategy of an account. However, if you discount to achieve the land and expand strategy, you're screwing the next person who's going to, now, look, the argument can be made of, you know, for those with less scruples to say, who cares about the renewal guy, right? I'm just trying to secure my deal. But the problem is, is like, okay, if that's your attitude, then you can't, you can't work here, right? Like, you're not going to be around for very long. You're not going to be very successful in this business, because you stick around for year two or year three, people are going to start to notice how your deals go.

So I would highly recommend against that as much as humanly possible. That being said, look, if there is a need to discount, fine, but not at the expense of just discounting. Like, what are we getting in return for that? How much have they asked for? How much are we actually giving? Are we making them feel like this thing that we're giving them is, in fact, scarce, which increases the perceived value of that thing? Are we asking for something in return? Are we only giving a portion of that thing away that that person has asked for? All of these things become incredibly important. And so what ends up happening, though, is like before, like we talked about premature discounting, but let's just say they don't even premature discount, but the counterparty asks for a better deal.

If they ask you for a better deal and you just go, okay, right to try and maintain and manage the relationship, what unfortunately ends up happening is that the opposite occurs, right? Well, I'm going to keep asking until you say no, because that's my job. And so I think a lot of people fall into this false sense of security of like, oh, I'm just going to believe in some sort of magical karmic justice that when I give something, you're going to give me back something else in return and I don't have to ask for it. I think that's fine for your personal life, right? And I would highly encourage people to do that in their personal lives. Like give, give openly and give freely to charity and things that you care about.

I think that's really important that in business, this is a critical mistake because they're just going to keep asking. Yeah, that's it. And that's the thing. It's again, I go back to human nature. Like we are, we are born to take advantage of whatever is in front of us. We will keep doing whatever it is, right? I kind of use the funny example of, you know, if you're in the office and you're, you know, cube mate every day, it's like, hey, Mark, can I get you some coffee? Can I get you? I am going, I'm grabbing coffee. I'm grabbing coffee. I'm grabbing coffee. I'm grabbing coffee. Yeah, yeah. Absolutely. Grabbing coffee, grabbing coffee, grabbing coffee. Then after a little while, you know, one day you see your cube mate super busy, super, you know, just stressed out doing a bunch of stuff.

And you're sitting there and you're just kind of poking around on email and you want some coffee. Nine times out of 10, you're not going to say, hey, can I go get you some coffee to somebody who has gotten you coffee for the past 10 weeks in a row? You're going to look at that person and go, hey, you going out for coffee anytime soon? Even if they are insanely busy because you've conditioned them to keep asking for shit. And that's the just human nature, the way it works. So two questions on that one. One is, what are your thoughts on having, and I might even ask you this in the previous, but I'm curious again, what are your thoughts on having a walkaway line? Like an actual line that says, you know what, look, I'm going to, let's just use lazy shit here, right?

It's going to be a hundred, but at bare minimum, 75, fuck it. If it goes to 74, I am out of here, right? And, and, or like having options, but it just goes below this line. Because my theory is this, is that we all have a walkaway line and it's a mental one. And without defining it, it ends up getting passed and then negative things start to compound. We start to get frustrated and we just don't, because now it doesn't seem, and this is what Chris Voss always says is the worst four letter word in negotiations is fair. It just doesn't seem fair anymore because I've given you everything and you keep asking for shit and now it's not fair because you've gone past this imaginary line in my head. And now I'm going to start doing self-defeating things.

Like I'm going to get pissy with you. I'm going to stop reacting. You know, I'm going to get stronger and then it's just going to unwind. Whereas if I say, look, it's 75, man, like once you go 75, it's okay. Like, that's all right. It doesn't look like we're doing business here. What are your thoughts on having that walking in and what, what the flexibility is on that for you? So yes, have it, but it has to be real. Yep. Right. So it can't be something that you just waffle on at the end. So it does actually have to be real. And if you say, I will walk away here and you don't walk away here, you're cooked. It's over. I'm going to see if I can change my camera here. I want to show you something.

No, I can't do it on this day. Okay. So I'm going to teach you something. I was going to use a whiteboard, but I'll teach you something called tapering. So it's this idea of, we never want to be in a position, if we're getting close to that walk away line, we never want to be in a position where we can, we say something to the effect of, this is my best and final. This is the lowest I can go. This is the most I can offer. This is the biggest discount, blah, blah, blah. Whatever it is, right? Those are absolute words. And whenever we get stuck in absolute sentences in negotiation, what ends up happening is we, most of the time, we're BSing. And we're also kind of painting ourselves into a corner with less optionality.

So instead of getting to that point, what I want people to consider is tapering down your concessions so that you're creating an idea that every single time that they ask, there's less and less and less available to them. So you are creating the idea of scarcity in their minds without actually ever having to say, this is like the best I can do. So if you were going to ask me for a 10% discount, I might say, look, John, I don't think I'm going to be able to do 10%, but I might be able to do 5% or 5.3%. Decimal points are good. Odd numbers are good. So if I give you 5.3%, and then I'm going to ask for something in return, I'm going to say, John, I can give you 5.3% if you can do net 15 payment terms.

And then you, as a good procurement person, is going to say, net 15, we're asking for net 90. What are you, insane? Net 45, we might be able to go to net 45, but 5.3% isn't going to cut it like I want something else. Okay, well, I might be able to do an additional incremental 2.1%. So now we've gone from 5.3% to an incremental 2.1%. I'm now at 7.4%. Then the next time you ask, I'm going to give a smaller incremental discount. So there's going to be less and less and less available, hence the name tapering. And so the idea is that when you keep asking, there's less and less and less available to you. I'm always going to ask for something else in return or a collection of things in return. And as a result, the juice becomes not worth the squeeze.

Because every time you ask, I'm giving you the perception that there's less and less and less available. We're getting closer to the end point of that conversation. And now you're going to go, okay, it's not even worth me asking. Now, look, there may be an additional 15% available. But I don't need you to know that. And I'm certainly not going to say that. So I would highly recommend that if people are going to use a walkaway line, which I highly recommend that they should, instead of doing equal incremental concessions, like some people go, well, you have 5%, then another 5%, then another 5%, because it feels math, right? Like it feels equal, it feels normal. It's easy to manage. The problem is, is that if you just keep giving me the same amount, I'm just going to keep asking.

And then when you hit your walkaway line, I'm going to be like, well, what the hell, right? Like, how come there's not another 5%? So try your best to taper down to that number. So then, and there's a nuance there that I tell a lot of people, but I want to get your perspective on the psychology around the non-round number. Yes. It drives me nuts. Like, I look at it as, and you tell me if I'm wrong here, if you're procurement and I'm sales and I'm selling to you and I offer you a 10% discount, I feel like it automatically tells you that I don't know how to negotiate. Because if I do like 10%, 20%, 30%, whatever it is, but if I come at you with a 7.6%, 7.625% discount, there's a perception that there's some thought process into that.

There's some math behind. You've calculated it somehow. Right? Yeah. Is that perception real? Because I had somebody, I posted this on LinkedIn once and some, most people like, yeah, that makes total sense. I didn't think of it that way, whatever. But a couple of people are like, oh, that's just bullshit. You know, if you're making it up, then, you know, you might just tell them what it is and don't play games like that. I'm like, I wish I could agree with you, but unfortunately, negotiation isn't about full transparency. Yes. Because if it is, I would show you exactly what our profitability margins are. You'd tell me exactly how much your budget is. You'd tell me, you know what I mean? All these things and that just doesn't.

So where are you with that kind of playing the game a little bit, even though it might not be totally what I would say 100% honest? I think it's 100% accurate that you should do that. I recognize that, you know, when a lot of people hear this, they're like, well, can't we just be rational and reasonable and fair with each other? And I hear that because, you know, I can sort of feel that in my gut of like, I would love the world to be this way. Right? Like, it would be amazing if the world was this way. But what is rational and reasonable and fair to you may not necessarily be rational and reasonable and fair to me or the next person or the next person. And so there's so much subjectivity to this.

And also, if I just open up and say, well, look, man, like, this is how much I have. This is, you know, what's your budget, et cetera. Now I'm putting a lot of trust in the counterparty to be as honest and transparent as I am in that conversation. And I will be the first person to admit that I have used the information that others have given me against them. That was my job for a very, very long time. And so I would highly recommend that when people are going into conversations like this, I know that there is this sort of standard spiel that a lot of people put out there of like, let's just be 100% transparent with each other. Gosh, golly gee. And OK, I don't want you to lie to the counterparty.

That's very important. But I also don't want you to reveal everything to the counterparty because you're just you're placing your the negotiation in their hands at that point in time and saying to them, please don't screw me. That's essentially what you're saying. I just don't want you to approach it that way. I think it's very dangerous. Yeah. And by the way, I think it then puts that other person in an extremely awkward situation as well. Like you might be thinking, but now all of a sudden I feel guilt. And if I feel guilt, like I did this early in my career and it's like I think every sales rep does this once and then they realize they'll never do it again. It's they get so comfortable with the prospect.

They tell them that they need the deal to hit whatever quota, whatever number, whatever it is by the end of the quarter. And they're like, hey, could you just do me a solid? Could you just do me a favor? Because they think they're friends with this person. And then sure as shit, the end of the month, end of the quarter comes and it doesn't happen. And now not only have you missed your forecast and all that stuff, but now you've actually and probably that other person was busy. Other shit came up. They didn't do it maliciously. They just shit happens. You know what I mean? And now you've made them feel horrible potentially, or you've given them the keys to the castle and allowed them nefariously to take advantage of you in every way, shape and form.

And neither one of those scenarios is a good one. Yeah. And I mean, look, the problem is, is that the, I hate to say this, this is going to sound terrible, but a lot of leaders are facilitating this kind of behavior, right? Where they're, they're, they're enabling the discounting mindset and discounting is discounting is not a strategy. It's a symptom. It's a symptom of bad negotiation. And, and if we enable that, and if we continue to enable that, you're just going to continue to see degradation and erosion of margin. And that's, it's going to be, it's going to be putting you as a leader in a really rough spot. And, and look, I'll take the opposite approach here is if you get yourself into that position, that's a result of you having a pretty crappy pipeline, right?

Like, so now, now you're in a spot of like, okay, well, we, we have to push these through because we've got to close this because we've got nothing in the pipe and we're going to start from zero. And now we're screwed. That's a dangerous spot to be in. That's why, you know, going back to, you know, pipeline is the answer to everything because not because it's just more deals. It's the confidence that you have walking into a situation that you don't have to drop your pants to get the deal. Like you, like I always tell people, I want to put myself in a position where I want your business. I don't need it because if I want your business, I sell the right way. If I need your business, I do some shady ass shit.

Right? So a couple more questions and then we'll get into the nine things here. And I'm, cause I'm just really curious on this. No, no, keep going. This is great. What's, what's your, you'd mentioned something earlier about like kind of like holding the power to a certain degree, holding the power, like you got 7.2% instead of 10%, that type of thing. So you have give yourself a little bit of leverage. What's your state on, on the rep negotiating directly. And I have the power, you know what I mean? Like, yes, you know, 6.2. All right. I'll go up to 7.8. Okay, fine. I'll go 9.7, that type of thing. Versus being the mediator, like the, the in-between between you and power, like between power, basically saying, Hey, Mark, I appreciate the ask here, man.

I don't have the authority to do those types of discounts or get that creative, whatever it is. So I'm going to have to go fight for you internally on my end to make that happen. You know, what else, you know, can we bring to the table so I can go to my boss and say, Hey, you know, for instance, if I get them this discount, they will sign. Right? So if you tell me that you'll sign, if I can get that discount, man, I'll go fight for you. Right? Versus Mark, look, what is it going to take here? Okay. I can probably go up to 7.2. Like, where are you on leveraging your manager? Because I'm not the one versus being the guy who's holding the power. Cause I, I worry for reps who are throw their hands up to say, Oh, it's not my, they, they lose credibility.

They lose authority. They lose leverage if they do it that way, but there is leverage to have to go to the manager because now I'm not the one. So where are you on that? This is going to sound unpopular because I know people want that management filter. I'm a big believer in arming the rep with the power. Same here. Right. But that comes with a few caveats. Number one, you've got to have training to enable them to have the power. And so you've got to, and not just like a one-time event, right? You've got to be coaching and role-playing, et cetera, on an ongoing basis so that they have the muscle memory to be able to actually do that. And I'm fine with like, you know, maybe there's a certain risk level or a certain revenue level where you get, you know, a VP involved.

Fine. No big deal. But then they, that VP needs to be involved, right? Not, not someone who's consulted. Just pops in. Yeah. Right. Exactly. Now, that also places a lot of responsibility on the rep, right? To know clearly what it is you want to get out of the deal, like what the goals are for the deal. Because if you tell me it's just about the money or just about the revenue, then you don't get to do that, right? That's not, that's not allowed for you. You're not allowed. You have now have to go get approval from someone. The unfortunate reality, John, is the number one conversation that I have with most sales leaders is most sales leaders for the ICP that they're reaching out to don't actually know what they want out of those deals.

So they'll say something like, I want to get a good deal. To which my response is, okay, but, but what makes up that good deal? Is it, um, is it, um, is it a certain revenue number or profitability number or a reduced risk amount or access to certain data or, um, approvals to be able to use brand and logo? Is it testimonials? Is it case studies? Is it a reduction and limitation of liability? Is it use of IP? Like what is the shopping list of items that you are now picking up on in order to facilitate that? Because if you just tell your reps hit the revenue number that you need to hit, they will do that by any means necessary because you've made by default everything else not as important. And while everything else may be a lower priority, it's still very important to the business because if your rep gets you into a situation where now you've got the revenue, but the risk is insane, right?

So let's just say there's breach and there's a data thing and there's no shared liability on that. Your company's dead, like it's over, right? And so that means that you have to arm your reps with the proper training and understanding what it is we're actually trying to achieve to be able to do that, which means that you need a better sophistication of, of a rep that you've, you've got doing the work. And so you've got an AE that's trying to close, but if they don't have the tools necessary to be able to close with that level of sophistication, they can't actually have a high level legal conversation on limitation of liability, or they can't have a conversation about data. It's going to be, it's going to be hard to be able to facilitate that without getting those filters in place.

Now, does that mean you've got to put in extra work and actually enable them to do that? Yes. Will you get better deals? Also, yes. Yeah. Okay. All right. So let's get to these. So you get nine secrets to win deals and influence stakeholders here. Yes, indeed. Yeah, that's the book. And it's already out, right? It's already out, available on Amazon. Yeah. All right. So first of all, give me a couple, what are your favorite secrets? Favorite secret we kind of just already covered is just knowing what it is you want. That's secret number one. And the reason I wrote this book is because for years in procurement, I would sit on the other side of the table and be met with salespeople who were very poorly armed.

Right? Like they just didn't have the skill set. They didn't have the machinery to be able to do the work. And so I wrote this book for salespeople from a procurement perspective. Okay, cool. So the idea is basically to say, look, this is how I think. Here's how I want you to approach the negotiation. Here's how to plan for the negotiation. Here's how to get best results. Now, a lot of people confuse this with like, oh, how do I influence and persuade at the point of being an SDR to get up to the point of that? What we're talking about specifically in this book is post-proposal, right? So once the proposal is made and you're moving it through the organization and trying to get to close, that's where we're at with this.

Okay, perfect. So we talked about, you know, getting – well, and here's one as it relates to that because you and I talked about this before about how procurement doesn't have to be the enemy. They don't. They can actually be your advocate and if you pull them into the deal early enough, right? Because if they feel like they're building it with you, then they're actually going to fight for you. If it's the typical build your champion, VP of sales for me, blah, blah, blah, and then we go through the whole thing and then all that VP of sales does is dump that on the procurement person's desk and say, hey, we got to get this through by the end of the month. Well, then procurement is going to do what they're going to do.

They're going to cross every T, dot every I, protect their company against everything, reduce the price as high as they can because there's no investment in it there with them. So I guess when is a good time for reps to think about – is there kind of a trigger for you where you're like, oh, you know what? This makes perfect sense to bring in procurement early here because I want to equip reps with like why – like I'd love to be like, hey, you know, Mark, you know, as we go through this, why don't we bring in procurement early? Because, you know, they fuck everything up at the end, man, and, you know, that's – so what are some trigger events for you to say? That's not bad language. I mean, I would probably use that language.

No, I would probably say, look, at the point that you're ready to submit a proposal or you're – the user has said like, okay, shoot me something that I can have a look at because I am genuinely interested in this. There's like this rush to like, okay, yeah, yeah, yeah, absolutely. I can get something to you right away. Slow down right at that point. Time to pause here for a second because now is when you ask the educated question of like, hey, look, when we've done this in the past and we've submitted a proposal, generally speaking, there are other groups that like to get involved, data, procurement, legal, et cetera. We might be too early to pull them in to the conversation. However, giving them a heads up is probably a good idea because the last thing I want to do is to get to like three-quarters of the way through this negotiation or all the way through to the end of the deal, and then someone in governance or data or someone in procurement or someone in legal says, timeout, start over, right?

Do not pass go. So is there someone else, maybe a collection of people, three or four people that we should be bringing into this conversation? Now, that being said, it depends on the size of the organization that you're selling into. If you're selling enterprise, that's the conversation you're going to have. If you're selling SMB, you're probably not going to be having that conversation. Maybe you're pulling in IT. Maybe you're pulling in data, but there might not even be a procurement team at that point in time. So this is specifically related to enterprise sales. Yeah. And I was going to say, even at the SMB level, usually if you have power, if you have an executive, they can tell procurement to do whatever the fuck they want.

Like they're negotiating the contract with you. They don't have a procurement partner. If they do, it's some admin person that's in finance. It's not a procurement. Yeah. They probably don't even have a procurement person that would do that. And also even at enterprise, the level of enterprise that you would get into would largely determine whether or not procurement's getting involved in the first place. Like there are a lot of deals that are, you know, under 200 grand, under 150 grand that procurement's just like, whatever, dude, go do whatever you want to do. If I don't spend the money, I don't care. I'm looking at 500 and above. So at that point, it depends on where the scrutiny comes in.

If it's required at 100 grand, bring in procurement. If it's not required, don't worry about it. Yeah, exactly. So let's, in the book, you talk about negotiation alchemy. Okay. Yes. Could you explain to me what that is? Negotiation alchemy. Negotiation alchemy is this idea that you can create different things than what you already have. So the idea of alchemy is that, look, I have a base metal and I can turn it into gold. So I have stainless steel, turn it into gold. I have anything, turn it into gold. This idea of negotiation alchemy is like, oh, I have this base relationship, but I can turn it into something better. So we're transforming, hopefully, this conversation, not just into what we have right now, but into something much bigger, much better that we can really, really benefit from on a go forward basis.

And the way that I, a lot of times negotiation gets really reductive really quickly. And a lot of my training, to be fair, is to be able to help people to arm themselves against that reductive conversation. And also, we need to balance that with what else could we generate from this? What else could we grow this towards? So we don't want to just create something that is the base for what it is right now. Our hope is that it grows into something bigger. Now, all of that comes with the caveat of saying like, okay, if it's a quick win and there's nothing else that can be generated from this, fine. But there is so many additional things that can be created as a result of your research that you're not necessarily paying attention to.

I might be selling into an enterprise for one discipline, for example, that has one use case. But I haven't really considered how that could be leveraged across multiple different departments and multiple different use cases that could be tried out as a result in year two or year three. And so building that into the deal for it to become something more is very, very important. Well, and you get into what I coach on, which is I just want to remove the word discount from the vocabulary of sales reps. I get discounting, you use whatever. But just to replace the word with creativity or flexibility, because I think that's where it comes down to. Like even just the rephrasing of it to creativity. Yeah, look, we can get creative with our pricing.

We definitely have some flexibility here, right? But then it's not a dollar figure or a number. Now, like for me, as an example, I do my best discovery work, right? Understand what their real priorities are, whether it's onboarding or it's conversion ratios or it's scale or it's whatever it is, right? And 99% of the time, I mean, look, I lose deals because I'm too expensive. Sure. But if that's the case, they probably won those deals. Well, if that's the case, then I probably wasn't the best fit. You know what I mean? Like I did a bad job disqualifying you early because if we get to the point and I show you my price and you're like, oh my God, like, you know, whatever. That's my bad. But with, you know, oh shit, where was I going on that one?

Alchemy. Discounting. Yeah. Oh, so, fuck. I think I might have to edit this out. I had a point that I was trying to make. My brain's, my brain's fine. You should totally keep this in. We should totally do a blooper reel. I don't edit any of this stuff. Everybody knows I fuck up and I don't edit shit. So yeah, no. All right. That was a brain fart. Smoking too much weed. Anyways. All right. Let's get, let's get, let's get to this one. Cause I am super good. And then I want to hear one or two more of your other ones here, which is do, does, does procurement care about ROI? Yes. Do they, so they do. Yes. So like an ROI calculator, cause I shit on ROI calculators all the time. And I, my stance is, I think that people used to below the power line, people used to like, do care about that.

Above the power line people. It's okay. Yeah. All right. We're close. I can see the ROI here. But my contention here is that is because of indecision, because things are moving so fast, because everybody's been so burned and risk is so high that people don't believe in ROI. Cause the ROI is the, is the promise of return from this investment sometime in the future. And quite frankly, I have no fucking idea what the future is going to look like right now. So help me understand how ROI plays into this and how a rep should use it with procurement specifically. Two parts that procurement cares about here. So I'll talk about ROI and then I'll talk about procurement's word for, for ROI. Okay. So ROI within the, the sales sense, like, okay, you're making an investment, you're spending money on this product.

I am going to return that investment to you plus whatever X percentage because of that investment you're making traditional ROI calculation. You give them an ROI calculator that shows them if they do this thing, then they will receive those things where procurement does care about this, but only if it can be tracked and only if it is true. And so. Well, yeah, but how do you know it's ROI? I can't, I can't guarantee it. What they're going to hold you accountable to. So my, my, my, my favorite thing as a procurement person was when a salesperson says something to the effect of, well, if you invest in this, we'll generate X amount of return for your organization to which the procurement person's response is.

Put in writing. Great. Wonderful. Write that down. And then we're going to put a clause in there that says, if you don't do this, we get it for free and all of our money back plus a bunch of other things, et cetera. So yes, procurement cares about it and they're going to hold you accountable to anything that you say related to it. Yeah. The procurement word for ROI is called total cost of ownership. Okay, cool. Yeah, there we go. So it's this idea that look where the price is part of the total cost of ownership, but then there's also the change management cost that goes into it. There's the training cost that goes into it. There's the cost of not using additional things that goes into it. And so they are trying to calculate, okay, what is our total cost of ownership going into this?

And if I compare my total cost of ownership buying your product to another company's total cost of ownership that sells virtually the same thing, but their total cost of ownership is lower. My belief in your ROI is now less because they're saying, okay, it's going to cost you less overall to do our thing, to do the same job. I don't actually care about ROI at that point, as long as the total cost of ownership is lower. And this is what a lot of people in sales find confusing sometimes is that they'll say, well, how could we have lost that our price was the most competitive on the marketplace? Well, you lost because of the amount of change management that has to go into this, the amount of training that has to go into this, the amount of effort that my team has to put in, the amount of deployment costs that have to go into it, et cetera, et cetera, et cetera.

So I'm not just looking at the price. I'm looking at all of the additional components as well. Well, and I think that price is a component of risk, right? So it's like the more I spend, the more risky that is for me to make that decision. So I need to have all these other pieces in place. The less I spend, the less risky it is, the less of those other pieces are in place. And so the whole idea of de-risking isn't just about price because it's about the implementation. It's about this. It's about the transition, adoption, all these different things. And that's what you got to hunt for to figure out what really is why they're doing this. Because I don't know, there's very, I always ask price up front.

Like when they start asking, give, get, when they start asking price, I'll be like, look, I'm happy to share you and give me some parameters here. What are your growth? And you know, I can usually give you a pretty good range. But my immediate get is, so just out of curiosity, where does price fall in the decision criteria tree here? I like that. You're asking for information. Right. You know, if you think of all the different reasons prioritized of why you would make this decision, where does price fall on that list? And if it's number one, by the way, we can make this conversation very short. We're not the cheapest, nor do we ever want to be. And, you know, have a good day. Right. Go talk to some of my competitors here.

So I think that's the, you know, to me, it's, it's the give, get component to what you're doing from a negotiations, but also knowing what to get and ask for in return for what you potentially could be giving away. So this game is so hard, right? That's why the negotiation game is so hard because you have to have the knowledge, you know, the information of the stuff you want. You have to know what they want. And then you got to match them up somehow. So they seem reasonable to, to put together here. Right. So it's like, I can't, you can't say like, give me, you know, send me some information, sign the contract. It doesn't make any sense. You know, you got to have something equal to make it feel like it.

Oh yeah. Yeah. Look, I'm happy to do that for you. Like reciprocity factor, obviously. Right. Like I'm happy to do that for you. You know, would you be able to do a two-year contract or a three-year contract or extra 50 licenses or whatever? Or how about instead of a discount, I'll give you an extra 10 licenses or an extra two months on the contract. So it can do that. That sometimes is way more valuable than a discount ever would be. Yep. So a hundred percent agree. Awesome. Well, I actually, there was one more, and I know we're over here, but there was one more question that I wanted to ask you, um, related to all the, I mean, there's a million, just some different questions, but, um, let's talk about last, last point is revealing the strengths and weaknesses of your counterpart, right?

Because if I know what your weaknesses are, I know I have leverage. If I know what your situation is, I have leverage. That's why it's the worst thing in the world for a sales rep to say, ah, I got to hit my quarter this, you know, I got to, I just need this deal to hit this quarter. Now you're, you're toast. Um, and my take is the more invested you are, the more time you invest in a negotiation, the more leverage the other person has, because now I'm thinking of all the time I've spent with this, which is a lot of money to me. And therefore my sunk cost, I'm not going to walk away from it. I'm going to try to get something out of it. But talk to me about how to figure out what those strengths and weaknesses are.

So this is all about prepping your questions prior to going into the negotiation. So I think a lot of people try to wing this part to generate information, but you can be really targeted to the questions that you're asking based on the things that you're trying to achieve and that you think the counterparty is trying to achieve. So for example, if I'm going into the negotiation, I know that reducing risk is really important to my organization. Um, and increasing exposure is really important to my organization. I'm going to ask questions that are situated and targeted to those things that are open-ended that drive conversation about those things. And then I can also do the same thing based on what my predictions of what you want out of the conversation are.

So let's say, for example, that I've got a good read that, um, risk is really important to you. And understanding how to deploy is really important to you. And securing data is really, really important to you. I'm going to ask targeted questions to those things that are open-ended, where a lot of salespeople start the conversation around that. They understand that they need to reveal that information, but they'll ask a question like, would you say that risk is really important to you? And then the counterparty is like, yes. Right. And it's just, at that point, it just becomes super frustrating. Instead, we're going to try and ask open-ended questions that generate more information that's targeted specifically to that risk metric for you.

So I would ask something to the effect of, how important is risk to you when we do X? Or what would you do if X happened regarding this data? Or how would you respond to a situation when whatever might happen? And what you're trying to assess there is for them to reveal their hand, so to speak, so that you can dig into deeper levels of information. And then you can rank those answers based on the previous information that you've received from them. So then you can say something like, let's just say, for example, how would you deal with a session or a situation when you said, well, I don't know, we probably deal with it this way, but frankly, that's never happened before. Then I might say, okay, if that's never happened for you, is it because you have this in place or that in place?

And now I can start narrowing down pieces of information that I can use as leverage later on to be able to extract more and more information so that I can close on the thing that I think is important to you to help me get the thing that's most important to me. But you can only do that if you structure your questions the right way so that it generates the information you have. Now, in order to do that, you will have needed to do some research and listen to some investor calls, et cetera, to be able to understand what's really important to the organization. But it's, if you just ask the question of like, what would you say if, or- Hypothetical or reading, those type of things. Yeah, it's, you're going to crash that negotiation immediately.

I think that's, you know, what most reps do is they, I think questioning skills is the number one thing we can, well, one of the number one things we can all focus on getting better at because the better questions you ask, the more information you get and the more ammo you have to combat negotiations towards the end, right? I mean, you can easily just, even forget about any specific questions. You could just do the five whys. Like, well, we need this. We're trying to solve this problem. Why? Well, because we haven't heard, well, why? Like, why does that matter? Who cares? Why is this problem big enough for you to spend $100,000 fixing it? Because that's where we're at right now, Mr. and Mrs.

Customer. Like, it's going to be in the range of $100,000, $200,000, give or take. So tell me that this is a million dollar problem because if it's not a million dollar problem that we're trying to address here, then my $200,000 solution ain't going to do shit for you. So why is this important? Who cares about that? Like, those are the type of things. You don't even have to be an expert at that. You just got to keep asking why, like a five-year-old. Why? Why? Why? Why? Why? Why is this guy blue? Oh, shit. I don't know. Like, keep asking and digging because once you find the true essence of the problem, then in my opinion or my experience, you have all the leverage you need. Yeah, exactly right.

So awesome, Mark. Well, we didn't even get into the other eight secrets and all the other cool shit that you got going on. So I think we're going to leave that for the audience to go check out on their own because I highly recommend. I think you're right. I just came up the other day when I was doing the Glenn Gary, Glenn Ross event and had those 18 professionals. And Jeff Hoffman, my mentor, was there. Yeah, nice. And you could literally just, when he started talking about like, you know, his perspective, he was so contrarian, but he was, he just reminded me of the art of sales, not the science. I am a scientist when it comes to sales. I split test. I try different things. I like to think I'm personable.

Like, I think I'm good at discovery, right? But ultimately I'm, I'm measuring out, I'm testing and I'm trying different things, right? I'm not the guy who's just going to be able to read you fucking perfectly and say this and get you to think totally differently about it. Like, that's him. And I think we need to get back to much more of the art of sales than the science of sales. Because I think the science has turned into a transactional position. I think we have become transactional in this world. And there's just something about the fucking art of being able to sit and have a real conversation with somebody and be like, all right, man, let's, let's figure this shit out. And, and that's why I like with Jeff, I said it earlier.

Like I used to negotiate him with all my contracts because I used to resell his IP and all this other stuff. And guess what? We would get rip, I would get rip, roar, and stoned and I would negotiate with him because I loved negotiating with him because I knew exactly what he was. I mean, he could spin me around like a top, but I knew ultimately his techniques, how he approached things, what mattered to him and all this other stuff. So I just get rip, roar, and stoned and be like, all right, Jeff, let's go. Like, what are we talking about here? Right? Because it was just this fun art of negotiations. Nice. And I, and I think that's, you know, a lot of tips, a lot of structure, a lot of tactics that you talk about, but I think that's the essence here.

What I want to get back to is how do you do this for all the right reasons, but in all the right ways? Yeah. So awesome work. We'll tell people where they can find this awesome book and, and where they can find out more information about you, Negotiations Ninja and everything else as usual. Yeah. First of all, thanks for the opportunity to just speak to you and your audience, man. You can find the book anywhere on Amazon is probably the best place to do it. I would recommend going to Amazon and giving Bezos your money because that's probably the easiest way to get it. And if you want to reach out to me, reach out to me on LinkedIn. I'd love to be able to have a conversation with you. And if you're going to connect with me, just let me know that you listened to me on John's show.

There you go. John, thank you again for all that you do for the sales community, man. And for everyone in the sales community, it's very beneficial stuff that you're doing. Yeah, man. I appreciate it. I just think it's about getting good, good, uh, messages and good learnings out to good people who care enough to put in the work to do it. Right. I always say there's no silver bullets in this fucking world. Like you got to put in the goddamn work, but man, if you're willing to put in the work, then sky's the limit and, you know, share with you whatever I can. So thanks for coming on, Mark. I really appreciate it. Thanks for having me, dude. Appreciate it. Absolutely. And everybody hope you enjoyed the conversation as much as I do.

This one was filled with nuggets and tips and the book is even filled with more. So go check it out. Go check out Mark's training as well. He's got some great training specifically on negotiations. Um, and like I say, I don't know all these podcasts, go out there and make somebody smile today because no matter how bad your day went or how bad you think it's going, make somebody smile. You know, you had a good day and the world needs a lot more of that right now. So thank you all very much. And I will see you on the other side. Hey everyone. I hope you enjoyed that conversation as much as I did with your support and our incredible guests. We're one of the top sales podcasts out there right now.

And I can't thank you enough now to keep the momentum going. It would mean the world to me. If you could go and leave a five-star review on your favorite podcast platform and share some of your favorite episodes with your network. Also, I am super excited to be launching my new newsletter where I'll be sharing everything I know and everything I'm learning along the way while I'm out there selling every day, just like you go to jaybarrows.com slash newsletter to sign up today. Let's all level up and make this happen together.