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StreetSmart: Changing the Conversation Early in Your Sales Cycle
24 Plays12 days ago
In this episode, Brian Dietmeyer talks with Carrie Welles about transforming the sales conversation by introducing techniques like signaling and validation early in the sales cycle. They explore how these strategies can preemptively address common buyer tactics and shift the negotiation away from price alone, thereby adding value to the sales process. This insightful discussion is packed with practical advice, backed by research and real-world examples, making it a must-listen for sales professionals looking to enhance their negotiation skills and sales effectiveness.
Timestamps:
00:18 - Introduction to changing the sales conversation early.
01:21 - Explanation of signaling and validation in sales.
02:46 - Discussion on the importance of providing value during discovery.
05:47 - Detailed breakdown of the signaling technique.
09:17 - Differentiating signaling from validating and their applications.
11:03 - The science behind content-embedded questions.
13:51 - Real-life case study on effective use of signaling and validation.
14:48 - Conclusion and final thoughts on the episode's topics.
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Transcript
Introduction to Changing Sales Conversations
00:00:01
Brian
Welcome to another episode of Street Smart, the negotiation podcast. i'm Brian Dietmeier, CEO ThinkInc, business negotiation redefined.
00:00:11
Carrie Welles
And I am Carrie Welles partner with Think Inc. Hello Brian. All right.
00:00:15
Brian
Hey there.
00:00:18
Carrie Welles
So today we're talking about changing the conversation earlier in your sales cycle. So let's just tee off this episode a little bit and then, and then I have a whole bunch of fun questions for you.
Predicting Buyer Behavior and Price Competition
00:00:30
Carrie Welles
So in past episodes, we've talked about our research that proves 97% of the time we can predict buyer behavior. And we've, we talk about how it falls into generally two categories. So leveraging their alternative and, or asking for concessions.
00:00:45
Carrie Welles
And this shows up in the most common tactic that we hear all around the globe,
00:00:49
Brian
I can get the same thing cheaper. It's it's nine or 10 words that are death to us.
00:00:56
Carrie Welles
sure Very true. Okay. So today let's help our listeners understand how to change that conversation earlier in the sales cycle.
00:00:57
Brian
Yep.
00:01:04
Carrie Welles
So let's start with how do we do that?
Introducing Signaling and Validation
00:01:07
Brian
Well, we do it by leveraging a snappy little tool we call signaling and validation.
00:01:13
Carrie Welles
Okay. And now if I'm out there listening, I may think, hmm, isn't that just sort of discovery by another name?
00:01:22
Brian
Kind of. Yeah, it's it's it's an improved version. i want to start with a little compelling reason why to think about signaling and validation. One is that in a recent CSO Insight study, 62% of buyers say that sellers add no value during the discovery process, right?
00:01:38
Carrie Welles
Mm-hmm. Mm-hmm.
00:01:38
Brian
Which is troubling because it's like, what why the heck are they going to meet with us when they're not going to get any value out of it? And the reason is because a lot of traditional open-end discovery, you know, doesn't provide value to them. What keeps you awake at night? They already know that, right? We've added no value. And what what we like to say is we need to move from what keeps you awake at night to this is what should be keeping you awake at night, right? And put that put that into a question. How do you how do you feel about that?
00:02:04
Brian
and And it reframes discovery as an opportunity to provide provide insight to the other side.
00:02:10
Carrie Welles
Yeah, yeah. You give out a set, which has always so bothered me that buyers go to salespeople nine out of 10 places.
00:02:22
Carrie Welles
That's like how non-important salespeople are. and It is really scary.
00:02:25
Brian
Well, it for for places that they get insight. Yeah. And but the the good the good news.
00:02:29
Carrie Welles
Yeah.
00:02:30
Brian
So they yeah, same CSO study. But the good news is they said, I will meet with you guys, us and them. I will meet with you all if you've got something to talk to me about. And so I think even during discovery, we can begin to to be providing data to them that's a little more thoughtful.
00:02:47
Carrie Welles
Yeah, exactly. Okay. So let's get a lot deeper into that. So where do we start?
Beyond Price: Adding Complexity to Alternatives
00:02:51
Brian
Yeah. So, so remember the, the, the villain here is I can get the same thing cheaper, right? It's, they're going to try to commoditize us and reduce the entire negotiation down to price. So early on in the sales cycle, we want to begin signaling and changing that notion in their head that look these two are the same.
00:03:11
Brian
And the only thing I care about is price. We want to bring, I actually like to say, we want to bring more complexity to the alternative analysis. We want to bring more complexity to the commercial terms, negotiation And so the best way to do that, we've talked about in previous episodes, is to say, OK, this is my alternative. If they were putting us side by side, what are all the things they should be comparing to determine the same thing?
00:03:31
Brian
we We also want to do the same with commercial terms. And in addition to price, what are all the other things we need to reach agreement on? And by having those lists, that's what generates our questions. So we can embed some of that data into the questions to get them thinking.
00:03:47
Carrie Welles
can Can you get a little bit deeper on that tactic? So we called it out as being the toughest tactic that we all hear. I can get the same thing cheaper.
00:03:56
Brian
Yep. yep
00:03:56
Carrie Welles
And yeah, so so talk about that a little bit further.
Skillsoft Case Study: Criteria Beyond Price
00:04:00
Carrie Welles
Okay.
00:04:00
Brian
Yeah, it's it's it's back to that notion that it's it's in the other side's best interest to oversimplify the negotiation. Same thing, price. That's, you know, so boom, it's a line item. Let's talk about that. And we need to change that. And so the the very the first and most important piece of that is diffusing the same thing, right? Thinking through an alternative. And we did this, we've got a case study on this with Skillsoft. And we did this analysis. We sat down and said, if their customers, when they say you're the same as the other guy,
00:04:27
Brian
They would have to compare 43 criteria to determine if they're the same.
00:04:30
Carrie Welles
Yes.
00:04:30
Brian
And then we we all sit there going, really, when they say same thing, have have they gone through and looked at 43 criteria? No, they haven't. So then we we started. Now, we don't want to build 43 items into questions, but we took some of the key ones out by buying influence and just said, hey, when do you put a side by side with someone else, how important is X, Y and Z?
00:04:49
Brian
and And begin early on in the sales cycle, having those discussions. to diffuse this notion before they say same thing. We're attacking same thing six months out, right? when When they're not, you know, we're not all uptight because we're across the table from one another negotiating.
00:05:03
Carrie Welles
Yeah, that's good point. That's good point.
The Art of Signaling in Sales
00:05:05
Carrie Welles
ah All right, so so let's talk about the signaling part. So define signaling.
00:05:10
Brian
Yep. i I love the notion of signaling. So it it's a technique that involves like embedding information you want to share into a question.
00:05:21
Brian
And the funny thing is you don't really even care if you get an answer, right? So if we come to the customer and and we know, for example, we can We have on-time delivery that's way better than our competitor. So we can go to them and say, hey, our on-time delivery is better. It's better to put that into the question and get them thinking about it. You know, okay, on-time delivery, these few other things, you know, how how how how do those factor into your decision when you put a side-by-side with somebody else?
00:05:47
Brian
And if they don't answer, it's fine. we've We've just started to slowly chip away and at same thing.
00:05:55
Carrie Welles
Yeah, yeah. Okay. And that makes some good sense. Okay. So, so that talks about the same thing part of, i can get the same thing cheaper. Talk to us about the cheaper part of that sentence.
00:06:05
Brian
Yep. So yeah, we ask them questions. What do you think about this? Isn't this when you put a side by side with someone else, who cares if the answer we've hopefully put some of that data into their brain. It's exactly the same thing with price.
00:06:16
Brian
They, they want to focus on one line item with this price. We know price is a factor of volume, length of contract, you know, all those sorts of things.
00:06:25
Carrie Welles
Okay.
00:06:26
Brian
And, and so what we want to do is embed those notions in there to, to be able to say, okay, what are all the things we have to reach to agreement on? So customer, how would you force rank price, length of contract, volume commitments, and service levels in terms of importance to you?
00:06:42
Brian
Hmm. Okay. So I see that one's number one. How important is that relative to the other items? And that's interesting. Why why did you rank them that way? So again, we've we've just begun to subtly set the stage that there are a lot of moving parts and price is a subset and a function of all these other things. And again, if they don't answer,
00:07:01
Brian
we We don't really mind because we've we've just, you know, I think of it, I'm not a war fan, but I do think of it as like the F-14s strafing before the the ground troops come in That's what this is all about, you know.
00:07:14
Carrie Welles
As you're talking, it occurs to me that salespeople, myself included, we assume so much in what we know about the answers. And it's surprising to me when we coach to salespeople all around the globe, how often they do not get after this.
00:07:29
Brian
Yep.
00:07:29
Carrie Welles
As simple as it sounds.
00:07:30
Carrie Welles
So let me just validate these things that are important to you. And as you say, force rank them, weight them. we We just don't do this as a matter of standard, which is, we have to
00:07:40
Brian
Yep. Yep. Well, and it, and it, and it's a two steps. We've talked about a lot of stuff here, a lot of words, but we're going after same thing cheaper. So we want to, we want to, add some detail to same thing. We want to add some detail to cheaper, embed those into signaling questions, and then go ask those early on just to, again, begin setting the stage. But you're right. it's it's It's kind of a multi-stage process, you know, and you've got to do, you've heard me say this before, it's the dull and determined effort that drives brilliant achievement. So the dull and determined effort is what are aspects of same thing? What are all the moving parts in commercial terms? Now i'm going to put these into questions.
00:08:12
Brian
The brilliant achievement is when you're out there talking to the customer about these things and in the signaling early on in the signaling environment.
00:08:21
Carrie Welles
Yeah, and hopefully getting some answers too. So we started out this whole podcast with with talking about signaling and validation. So you've explained signaling really well.
00:08:32
Carrie Welles
So how is that different than validating?
Validating KPIs to Enhance Value
00:08:36
Brian
Validating, we yeah we actually want an answer because we're going to use that answer right later when when we're presenting our offers. So I find there's a lot of things we can validate on, but I find validating KPIs the most important.
00:08:49
Brian
right And we have to think through that human that we're talking to up front, not what are your KPIs. But we want to understand when when when you're getting ready to make these decisions, how do how does the achievement of these KPIs impact yeah like when you're putting us both side by side? And it could sound like, look, most of our clients are trying to raise average sales price, have shorter deal cycles and raise win rate, right? All KPIs for the people that we talk to.
00:09:14
Brian
Can you let me know which are most important? What are those values currently? and And what do you want them to be in the future? So now we're we're later on in the deal cycle. It's like, we we see They might even add KPIs to this to go, okay, no, those aren't it. Here's a couple other ones I'm interested in Here's the gaps.
00:09:29
Brian
That's giving us an opportunity where we can use that data later when when we're trying to combat same thing. It's like, no, in fact, the number one important thing to you is raging average raising average sales price from 12 to 15.
00:09:42
Brian
Let me tell you how I can do that.
00:09:44
Carrie Welles
Yeah, yeah, exactly. and again, we just assume so much of this. It's really crazy. so it's such a, it's such a good practice. So as we end this podcast, so bring this to life for us if you would. So talk to us about a real customer, a real example that you, you coached as you brought through the signaling and validating.
00:10:06
Brian
Yep.
Countering Self-Build Threats with Signaling
00:10:07
Brian
I'm going to hit that that. There's one other thing that just came to mind that, that Carrie, I want to share with with you and and the other folks, which is why why this is so effective. if If you go to the science of this, the researchers call this content embedded questions.
00:10:21
Brian
and And, you know, the what the what the studies will show, how humans react to this is like, holy smokes, you've you've taken your time to understand who I am. Like, you get it.
00:10:32
Brian
like you Like by asking, hey, most of our customers are struggling with these KPIs and they're trying to use these solutions to get them fixed. How do you feel about this stuff? That's completely different than, you know, what what are you trying to achieve? And, and you know, and another great example is, you know, open-ended question is, hey, what are your biggest challenges right now?
00:10:51
Brian
But if you take the time up front to think through and it's like, hey, Kerry, I noticed in your last quarterly earnings report that customer churn increased by 12%. How are you addressing retention challenges this year?
00:11:02
Brian
right? That builds so much credibility where they're like, wow, I'm it, it, humans are a little bit more engaged with you at that moment because you seem to really care. You took your time to do that double determined effort.
00:11:15
Brian
So, sorry, your, your, your, your other question was about a real life example. And this is one of my favorite. We're working with a company that, that, uh, provides data management services and they embed a lot of their content into their cut or their content and in their customer organizations. And one of their customers was getting ready for renewal and said, hey, you got you gotta to give me 12% off on license price or I'm not going to renew and I'm just going to build this thing myself.
00:11:42
Carrie Welles
Right.
00:11:43
Brian
So we sat down and and thought about, okay, if they if the customer were going to design, install, manage and update the system?
00:11:53
Brian
You know, what, what would that take, right? If they're making a decision between us and building it themselves. And so we bake this into questions and, and, and a lot of it, you know, we asked a couple of questions for each stage of designing, and installing, maintenance, and, and just was like, you know, that's interesting. Have you thought about, have you thought about, have you thought about, and I think what, what happened was either the buyer was lying.
00:12:15
Brian
They knew it was really hard for them to, to build this massive system and and uninstall all the data that our client had in there. So if if they were lying, we let them know that we know it's almost impossible, right? It's a very subtle way of signaling them that it's impossible. If they didn't know, we added some value and created some fear, uncertainty, and doubt.
00:12:33
Brian
And, you know, it's funny because we ended that session by saying, you know, the the great thing about us being in here is when that system fails, you blame it on us. But the risk, right, the risk to these people building their own thing, if it fails, you're screwed. You and everybody else who worked on this project and spent all the money on it are screwed.
00:12:51
Brian
And it's interesting because it changed the tone of the meeting. And then we immediately went to another tool we've talked about in other episodes, which is multiple solution options. Said, you know what, let's put that aside for a moment. Now that we've signaled on how horrible that alternative is, here's here's three different paths forward that we've thought about.
00:13:05
Carrie Welles
I,
00:13:07
Brian
And one of them does include, you know, a reduction in license price, but we're also asking for a lot more stuff too on on our end. And what happened was, you know, as, as usual, we ended up co-creating a fourth and it ended up being a great deal for both sides. But I think we had to, again, lay the groundwork upfront to attack and diffuse that, Hey, I can build it myself thing. And it's going to be just as good. And it's like, eh,
00:13:30
Brian
Before we get around to the commercial terms, let's tear that up.
00:13:35
Carrie Welles
Yeah, yeah, yeah. That is a great story. Okay, awesome. Any last lingering thoughts?
Conclusion: The Power of Signaling and Validation
00:13:41
Brian
No, it's it's worth it and it's a lot of fun and it's really not that hard to do and it will change the dialogue. But do keep in mind with signaling, if you don't get an answer, don't worry. You've implanted stuff in their head and validation. we We do want answers and we want to be able to use that later when we're presenting.
00:13:57
Carrie Welles
Yeah, makes good sense. Okay, that's great. Well, that's it for today. Thanks for joining us. We'll see you next time.
00:14:03
Brian
Thank you.