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StreetSmart: Preparing for the Unexpected in B2B Negotiations
3 Plays14 minutes ago
In this episode, Brian Dietmeyer talks to Carrie Welles about training for uncertainty in B2B negotiations. They explore the common challenges salespeople face in unpredictable negotiation environments and discuss strategies to predict buyer behavior with high accuracy. This insightful conversation is packed with practical advice on handling negotiation pressures and leveraging known patterns to enhance negotiation outcomes.
Timestamps:
00:18 Introduction to the topic of training for uncertainty in B2B negotiations.
00:36 A memorable anecdote about unpredictability in negotiations.
01:29 Discussion on the predictable patterns of buyer behavior.
03:06 Strategies to avoid end-of-quarter negotiation pitfalls.
05:05 Detailed breakdown of preparing for alternative pressures in negotiations.
10:13 Techniques for handling price pressure effectively.
13:35 Summary and key takeaways from the episode.
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Transcript
Introduction to Negotiation Uncertainty
00:00:01
Brian
Hello and welcome to another episode of Street Smart, The Negotiation Podcast. I'm Brian Dietmeyer CEO of Think Inc. Business Negotiation Redefined.
00:00:12
Carrie Welles
And I'm Carrie Welles co-founder of Think Inc. Hi, Brian. So welcome.
00:00:16
Brian
Hello.
00:00:18
Carrie Welles
Today, we're going to talk about training for uncertainty in B2B negotiations, because we do know that that is one of the biggest issues that every salesperson, no matter what kind of seniority, what kind of tenure you've had with your company, that that tends to be a big issue.
Unpredictability vs. Predictability in Negotiations
00:00:36
Carrie Welles
So, and Brian, I'm reminded as we start this episode that when you asked a customer one time, can you train for uncertainty or are buyer tactics predictable?
00:00:48
Carrie Welles
And she looked at you right in the eyes and said, Brian, negotiators are like drunks. They never know what you're going to do or you you never know what they're going to do, which that's just always maybe loud.
00:01:01
Brian
it's It's so funny, by the way, I'm i'm so glad you bring that up. i i think I think that was my pal Karen Holman with American Airlines. And who knows, maybe she'll listen. But I think she's the one that said it, and I completely forgot about that. That is the prevailing idea, isn't it? You never know what's going to happen.
00:01:01
Carrie Welles
OK, so yeah.
00:01:17
Carrie Welles
Yeah, you never know what it's going to happen. Okay, so this is what today's episode about is to help you get a little bit more comfortable that that is untrue and you you can predict what buyers are going to do and what they're going to say and how you can prepare.
00:01:19
Brian
the
00:01:28
Carrie Welles
So let's review the tactics pattern that we know and love so well, Brian.
00:01:34
Brian
Yeah. So there, there is, uh, we've done a previous episode on all the research that goes behind this. So if you want to know where this came from, but we can anticipate within 97% probability. What the buyer is going to say six months from now, what the buyer is across the 10 deals we're trying to close six months from now, they're going to refer to their alternative and, uh, and try to commoditize us. And then they're going to put some kind of concession pressure on us to give something away or add something more in for free. So we we already know what's going to happen. So negotiators are not like drunks.
00:02:08
Carrie Welles
Yeah.
Training to Anticipate Negotiation Categories
00:02:10
Carrie Welles
So just two categories, which does make it so extremely simple. Okay. So how does that help us?
00:02:17
Brian
You know, it, it reminds me, Carrie, you and I both worked for, for Marriott hotels a long time ago. And, and I went through some, some PR training when I got to be at the VP level. Right. So you never know when a microphone is going to get shoved in your face. And one of the things they taught us and they said, they teach this to like politicians, for example, that you can anticipate categories. Like if you're a politician, you're running for whatever office.
00:02:39
Brian
you know you're gonna get categories around defense spending, you're gonna get categories around overall spending, you know, whatever it is, international relations, whatever. And and so what what they taught us and what what politicians and others who are actors, other people that are out there that you don't know the words someone's gonna say, but here's the five most likely categories. And that was so helpful for me. And so for negotiators, it's it's much easier.
00:03:05
Brian
We should not be knocked back on our heels at the end of the quarter when we're trying to get the deal done, when they say something mean to us. Because we only have two categories, right? It's that alternative pressure and concession pressure. And and we already know. and And you ask, how does knowing this help us? HBR reported a little while back that the average American company loses $98 million dollars a year in end of quarter discounts. So we we already know this is gonna happen. and Let's just be ready for it.
Consistent Patterns in Buyer Tactics
00:03:37
Carrie Welles
Yeah, yeah, and I remember when we did the research and the findings first came out and I was so relieved because yeah you don't have to memorize 130 things.
00:03:44
Brian
the
00:03:47
Carrie Welles
You don't have to memorize what number 33 is, whatever it in just two categories was so simple, so straightforward. And I just remember breathing a lot better after that.
00:03:59
Brian
Well, it's but what what comes to mind, Kerry, when you say that is yes. and And we see that when we're working with teams, that it's like, wow, okay, wow, that that gives me a lot more confidence, a lot more courage because I'm i'm ready for these things. But even after our research, every as you well know, every new client we sign up, we reach out to their salespeople and say, what do you hear? Like from the buyers in that in that moment of truth that really knocks you back on your heels. and And in the old days, we used to have to, you know, we get 50 responses back of 50 really mean things the seller said to them. We'd have to categorize them. Now we can throw it into GPT. And it always follows the same pattern. So I do the same. It's like, I don't, now I'm just confident in it. But for the first 20 times we did this, every time we threw, I'm like, okay, in this part of the world or in this industry, it's not going to follow the pattern. And it always does.
00:04:46
Carrie Welles
Well, that's that's true because we have worked in 42 different countries. And so, yeah, yeah, we have a good lock on this.
00:04:49
Brian
Yep.
00:04:52
Carrie Welles
So let's spend the rest of the of the podcast just talking about the two categories. So let's talk, first of all, about that first category of executing against the alternative.
Tactics for Alternative Offers
00:05:00
Carrie Welles
So talk to our listeners about what's the best way to prepare for that.
00:05:04
Brian
Yep, so we are, i I like this episode because it's tactical. You and I promised up front that street smart was going to be all that stuff we can use today. So all right, we already know one category is we're going to get beat up. They're going to try to commoditize us ah us ah relative to their alternative. It could be do nothing. It could be build it myself. It could be go to a named competitor. So what we do is we answer the question, what happens to both sides if you don't reach agreement? And in this one, we're really focusing on their side.
00:05:32
Brian
Who is involved? What are the criteria they should be using to compare us to that alternative? And what are the top criteria? And and where where are we likely to get hit with something? right and And so you know let' let's try this. Let's say I'm i'm i'm a company that manufactures software and tools to help chip makers make more chips and reduce defects and that kind of thing. So we're nearing the end of the deal, and you're going to hit me with an alternative tactic.
00:06:03
Carrie Welles
Sure, sure. Okay. Brian, your competitor has faster delivery.
00:06:10
Brian
See, you said that with a smile. You're not a very mean buyer, but yeah okay. So what what what I will do is I've anticipated that that's that's one of the likely thing that's going to come up. So there's two there's two ways I'm going to respond to Carrie as the buyer here. One is maybe what she just said is not true. She just thinks that, or she's playing games with me. And then the second way is what if that thing is true? So Carrie just said, hey, Brian, your competitors ah faster on delivery.
00:06:36
Brian
Well, Kerry, the latest Gartner report shows we're in a magic quadrant for speed, the upper right-hand corner of the quadrant, top of the entire industry. So that that being said, how ist how important is is speed to to delivery relative to our ability to increase yield or drive defect reductions and also our global supply chain presence?
00:06:58
Carrie Welles
Hmm.
Correlating Offerings with Buyer Needs
00:06:59
Brian
So, yep.
00:06:59
Carrie Welles
You know what I like?
00:07:00
Carrie Welles
Well, let me just comment on that because as was a buyer, as you were talking to me, I was thinking that did not sound like a knee jerk reaction on your own. So it didn't sound like you panicked. It didn't sound like got it.
00:07:10
Carrie Welles
I got it either. You know, somehow cave on the delivery or whatnot, but it was, it was well thought out. So that's
00:07:18
Brian
Yep. Thank you. And, but, but it's, it's, it's just bringing it back into context. I just want to pound, like, we got to know when someone's putting you side by side with an alternative like this, it's always a little more complex. So we got to get ready for the top stuff and bring it back. So, hit me with that same tactic again, but this time I will respond. just Let's say that thing is true. Competitor is faster.
00:07:40
Carrie Welles
Okay, sure. So, Brian, your competitor has faster delivery.
00:07:44
Brian
Listen mean buyer lady, that might be the case. However, how important is that criteria compared to our ability to increase your yield, uh, drive defect reduction and our overall global supply chain presence, right? So it's it's exactly the same. It's like, okay, I'm going to acknowledge it, bring it back into context. The first time I corrected it and brought it back into context, but yeah it's a great point you make it's. It is what I often talk about is that dull and determined effort that drives brilliant achievement. It's anticipating having this stuff, knowing these things are going to come our way. And then it's just like, eh, I got this.
00:08:19
Carrie Welles
Yeah. So what is your advice on this? So you countered with just one aspect of that whole value proposition. What if I'm feeling as a supplier that my overall value prop is pretty similar to my competitor? What what do you suggest the best way I should discuss that?
00:08:40
Brian
Yeah. And we, we, it's a great question because we, we hear this a lot. No, you are not a commodity. There are very few commodities out there. However, are you similar? Perhaps. So, my, my mentor and advisor and Jim Dickey, Jim Dickey, the co-founder of chief sales officer insights says how you sell in today's market might be just as important as what you sell. And I would say how you negotiate might be just as important. So here's the thing. If, if we've, if we're very similar to somebody else.
00:09:10
Brian
And we've thought through, okay, on this alternative, here's the people who should be involved. Here's the key criteria they use to drive their decisions. And we can make better correlations between what we do and their key decision criteria. We will get credit for value, right? Because we're, if if the other person is just coming in and and dumping product stuff, and we're making direct correlations between, here's the three to four key KPIs you're trying to move. I'm going to directly align how I do that, right? Versus, versus versus the alternative.
00:09:40
Brian
You're gonna get credit for that thing. And and remember that based on our win-loss analysis that winners win when we show customers how we meet their needs at higher confidence and lower risk than in an alternative. If you just communicate that better than somebody else, even if it is similar, you get credit for that value.
00:09:59
Carrie Welles
Yeah, okay, that makes sense.
Handling Price Pressure with Trade-offs
00:10:01
Carrie Welles
So let's move to the next category, which is executing against price pressure. So how do we prepare for that?
00:10:09
Brian
That's question two, right? what What makes it a great deal for both sides, right? What are all the things we have to reach agreement on? what What are most at least important to both sides? And what are possible ranges, high to low ranges that we're willing, each side might be willing to accept? And then, as you pointed out in the previous one, go up to the top ones. What are the top commercial terms or legalties and fees that are going to get most pressure?
00:10:30
Brian
And, but it starts with that dull and determined effort about saying, all right, what are what are the moving parts? What are the likely moving parts? We're going to get pressure. And what are what we call trade pairs? What are the if this, then that we're ready to go. Okay. I'm going to get beat up on price. So here's three other things I can try to trade for. So let's bring you back into mean buyer lady mode with a smile and give, give me a concession tactic.
00:10:53
Carrie Welles
Oh yeah, one of my favorites, which I hear every other day. So Brian, you have to sharpen your pencil. I need a lower price.
00:11:01
Brian
Hey, Kerry, there might be a pathway to that. can Can we consider extending the term from one to two years or increasing volume by 10% or reducing service from 24 seven to eight by five, or maybe, you know, I've been dying to get into your Asia pack division, uh, maybe an introduction to Asia pack. So maybe, you know, a couple of those things you'd be willing to, to trade back. And then I might be able to consider the price you're requesting.
00:11:26
Carrie Welles
Yeah, and you know, it felt good about that. Again, it wasn't a knee jerk reaction. So I didn't hear and any or feel any panic in your voice. And if the question then is back on me, hey, what do you want to do about this? So if there's a pathway to that, it's not answers, not no answers. yes so
00:11:43
Brian
Well, and and remember too that, and and I wrote about this in B2B Street Fighting, we're not being tough guys and girls. This is a really nice way of saying no. And that doesn't mean we're tough. We're just being rational because price was set based on the volume, the length of contract, the service levels. It's completely illogical to, to simply focus on price out of context because price is, is, is a function of all those other variables. So, and that's all you're doing is you're Just like we did with the alternative analysis, we're bringing it back into context of apples to apples. And just like we're doing here, we're bringing it back into context of all the, all the commercial terms that are in concert with one another.
00:12:23
Carrie Welles
Right, right. Yeah, that makes makes good sense. So let we talked about a lot. So a lot of practical ideas, which was great. so So give a quick summary if you would for our listeners.
00:12:35
Brian
Yep. So negotiators are, I dunno, maybe they're like high functioning drunks, right? We, we, we know, we know with, we know within 97% probability, they're going to beat us up on two things, the alternative and concession pressure. We have to anticipate those, right? And then we have to be ready to bring those back into context, apples to apples analysis on the alternative and all the moving parts of commercial terms on concession pressure. It's actually.
00:13:02
Brian
It's actually quite simple, and but it's got to do a little bit of work. It might it only be 10 minutes doing this work up front and just having those bulleted points ready to go.
00:13:12
Carrie Welles
Right. Right. Well, and if if it's a couple million dollar deal, multimillion, then it might take you longer, but it's good.
00:13:17
Brian
Yep.
00:13:18
Carrie Welles
You should be preparing for this. If the deal is that important to you, you should prepare, but it's a simple framework to prepare. So, okay. That's great. Thank you. Good. All right. Well, that wraps another episode and join us next time.
00:13:30
Brian
Thank you.
00:13:32
Carrie Welles
Thank you. Bye.