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David gets into Blair's head to get his 10 basic negotiating tips that he has worked with clients on over the years. LINKS "10 Negotiating Tips" (with 5 bonus tips) "Selling in One Lesson," 2Bobs episode 49 Buying Less for Less: How to avoid the Marketing Procurement dilemma, by Gerry Preece Negotiating with Backbone: Eight Sales Strategies to Defend Your Price and Value, by Reed K. Holden TRANSCRIPT DAVID C. BAKER: Blair, today we are going to talk about 10 really interesting ways you can get your spouse to go ... Wait, I haven't, quit laughing. I haven't - BLAIR ENNS: I'm out. DAVID: How to get your spouse to go to the place for dinner that you want to go to. BLAIR: Okay. DAVID: How's that? BLAIR: Sure. What kind of trouble could we possibly get into? DAVID: Yeah, that would be a really stupid pod ... No. What we're talking about are some negotiating tips that you've thought about over many years. You've polled, you've tested, you've researched. You've worked with clients on. You've consolidated them into this one place. We may get to some bonus tips. I don't know if we'll have the time, but we definitely want to talk about the 10 basic tips around negotiating. Can you get me inside your head for a minute before I start pulling these out from you one by one? BLAIR: Well it's pretty crowded in there. What is it that you wanted access to? I gave you my password to everything the other day. What else do you want? DAVID: Is this going to be this difficult today? Are we going to do that? Or are we going to be cooperative? BLAIR: I'm feeling a little punchy. DAVID: Yeah, I see. I see you are. BLAIR: I'm in another hotel room. This is day 31 of a 36 day road trip. I tweeted today, "Okay. I've answered the question, how much travel is too much?". DAVID: Yeah. BLAIR: Getting into my head, I think these tips, I considered it kind of a beginner's guide to negotiating. I don't consider myself to be an expert on negotiating. But you can't advise people on the subject of selling and pricing without knowing something about negotiating, so a while ago I took a bunch of the best practices that I've encountered on the subject of negotiating, and kind of put it into one place. That's I think what we're going to talk about today. I'll call it a beginner's guide to negotiating, and we're referencing to these 10 tips that I've published previously. DAVID: Hopefully it will be more than a beginner's guide. But we'll just set people's expectations low. BLAIR: Yeah, right. DAVID: Then we'll exceed them. BLAIR: That's exactly what I was doing. DAVID: There are 10 in here. But there are two of them that we've actually had the chance to talk about in previous episodes. I will reference all 10 of them. But then with two of them I'm going to point people to a previous episode if they want to really bone up on all that stuff. DAVID: The first one is, avoid over-investing. This is one that we have talked about. It was in a recent episode. It was called Selling In One Lesson. The idea is that the more somebody wants it, the more at a disadvantage they are, right? Just summarize that for us and then we'll move on to the number two one. Over-investing is the first one. BLAIR: Yeah, so you can, a good metaphor for negotiating would be a poker game where there's times when you're bluffing, when you're playing certain hands. But in particular the idea of bluffing. Or calling somebody else's bluff. You can apply some of the tips that we'll talk about here. If it's very clear to the client that you want this so bad, and it's clear to the client not just from what you say, but from all of the free work that you have done, all of the costs that you've incurred. If you are clearly over-invested in the sale then you do not have much of a bargaining position. Because you are demonstrating through your behavior that you want it more than the client does. Therefor the client is the one with the power in the relationship. BLAIR: It's a big broad rule. Avoid over-investing in the sale. As you pointed out, we covered this in detail in the podcast, Selling In One Lesson. DAVID: Okay. Even if you do desperately need it, don't act like it. BLAIR: Right. DAVID: Second, and here we want to start diving in in more detail. The second principle for negotiating is, ask the question, "Have we already won?". As I read that, I wasn't sure exactly what you meant. That led me to dive a little bit deeper into this, and I found it really interesting. "Have we already won?". Are you really asking that specific question? Or is it more just framing the negotiating in your head? BLAIR: This is a negotiating point specific to the topic of negotiating with procurement. This comes up a lot, I wrote about this in my book, Pricing Creativity: A Guide To Profit Beyond the Billable Hour. In the last month in the various places I've been, and the talks that I've done, and the training I've done, procurement has come up a lot. Where I'll talk about a principle and somebody says, "Yeah, but you don't understand. That doesn't work with procurement". BLAIR: The role of procurement, and I learned the most from this listening to a talk by a guy named Tom Kinnaird. Tom was head of procurement at WPP. Gerry Preece is another great resource on negotiating with procurement people. Gerry is an ex P&G global design procurement person who has a consulting practice, and he's written a great book on dealing with procurement. It's called Buying Less For Less. I think the subtitle is The Marketing Procurement Problem. BLAIR: When I was listening to Tom Kinnaird, who was former head of procurement at WPP and is now a consultant, he was giving away at a conference in London I was also speaking at, he was giving away some insider procurement tips. One of the tips he gave away was, you need to know that procurement often lies. When procurement shows up at the end of a negotiation, when you feel like you are the ordained firm, you've either won the business or you're in the pole position, and then procurement shows up to negotiate the final deal. In that situation, almost greater than nine out of 10 times, you have won. You've already won, and the concessions that procurement is demanding that you make, it's not mandatory that you make them. BLAIR: Procurement's going to communicate to you that, in order for you to win the business, that it's still a competitive situation, they're still considering other firms. In order for you to win the business you have to cut price. The general rule of thumb is, if procurement shows up late and starts using that language on you, they're lying. I talk about this in my next article. I'm actually quite heated about it in the next article. So far I'm only at the unedited version of it. DAVID: Still very angry. BLAIR: Yeah. It will be published by the time this podcast goes to air. Hopefully it's a little bit more measured. But in it I make the point that procurement is the only profession in the world that I know of where they're taught that it's okay to lie. It's okay to outright lie in the course of everyday business. When they show up late and say, "You need to sharpen your pencil. We've got three bids. You're the highest bidder. You need to get your price to X or you're not getting the business", they're almost always lying. BLAIR: Now when procurement shows up at the beginning and they navigate the entire purchase process, you have another problem. They're not lying. It's an even bigger problem. They're seeing what it is that they're buying as a commodity, so you have to ask yourself, should you be even participating in a process where the client clearly does not value what you do, and it's seen as an expense to be minimized rather than an investment to be made? But the lesson is, so the tip is, ask the question, "Have you already won?". BLAIR: When you're in a situation where it feels like you've won, and then procurement comes in and says, "You haven't won yet. You've got to get past us. You have to give us all of these concessions", don't believe them. In fact I would go further and say, "We have this idea that we've got to throw procurement a bone in a situation like this. We'll give them this one win and then they'll go away". That's not how they work. They're trained to keep asking until you say no, so you want to start with no. BLAIR: We could go deeper into that. We could do a whole podcast on negotiating with procurement. But that's the tip. You ask yourself before you start giving concessions away, ask yourself, "Wait a minute. Have I already won here? Is it really necessary for me to make these concessions?". Because in a lot of situations you have already won, and it is not in your interest to make any concessions whatsoever. DAVID: The main clue is found in when procurement comes. At the beginning or the end. BLAIR: Yes. DAVID: That's the second one, okay. The third tip here takes this further, and it's around the idea that procurement lies regularly. Not just about this one thing that we're talking about that relates to how to decipher the timing and whether you've actually won. BLAIR: Yeah, so it is a recurring theme here. You might think, I always say, "Attack ideas. Don't attack people and organizations". But I always make an exception for procurement. Reid Holden, who's written a couple of great books on pricing and also on negotiating, and he infiltrated the world of procurement. He has this great line, and I repeat it often. "80 percent of procurement people give the other 20 percent a bad name". DAVID: As opposed to 20-80, yeah. You're flipping that around, right? BLAIR: Yeah. In the story I'm writing, I'm writing two different examples of two different agencies pitching two different pieces of business and then having to deal with procurement. One hold their ground and the other one doesn't hold their ground. The example where the agency holds their ground, they're told in the beginning, "The account is a $500,000 a year retainer", and so they do a little pilot project for free. They prove validation. Then they're handed off to procurement and procurement says, "The fees are not $500,000. They're $300,000. Take it or leave it". The firm walked away, and in the end the client came back and said, "Oh, no no. We want you to work with us. You can have the original $500,000". BLAIR: As I was talking to the agency president who was telling me this story, I said to him, "If I were you in that situation. If I'd heard that from the procurement person, I would want to get the client and the procurement person in the room together. I would want to look them both in the eyes and say, 'I want to know which one of you lied to me. You said it was $500,000 in fees. You said it's not $500,000, it's $300,000. One of you lied. Which one was it?'". BLAIR: We know who the liar is. The liar is always procurement, right? Because they're taught that it's okay to lie. But I just imagine, and I'm ranting in this article, and you can feel me getting emotional now. Because I can't believe that we continue to give this egregious behavior a free pass. We need to call out irresponsible practices and outright lies when we hear them from our clients and our clients' procurement department. I hope I've addressed the issue of three procurement lies. I feel like we should probably get off the subject of procurement. DAVID: Well I turned the recorder off a long time ago, and what people are going to hear instead of you ranting is me providing a very reasonable response to all of these things. BLAIR: Instead of my therapy while I lie on your couch. I'm going to a marketing procurement conference in London. I think it's in June. I'm really looking forward to being in the room with these people, and having an open conversation about what I think of their business practices. DAVID: The third point is, beware of procurement lies. Let me just read some of these and then we'll go to the next point. "It's down to you and one other". That's one lie. Another one is, "Yours is the highest bid". Another is, "You have to cut your price to remain in contention", or all these other things that you might hear. BLAIR: Or, "Take it or leave it. There's no negotiating. There's no middle ground. Here's my offer. Take it or leave it". That's another one. DAVID: Right, yeah. Then a concession, you say, is an invitation to ask for more. All right. Let's get you back down to happy land, and we'll move off of procurement. BLAIR: Well we're still going to talk about procurement a little bit here in the next one. Go ahead. DAVID: The fourth point is, outwait the waiter. Outwait the waiter is the fourth point. Talk about that. BLAIR: Yeah. I forget where I heard this idea from first, because I really would like to attribute to the various sources that I've pulled all of these things from. It might be Chris Voss who wrote, "Never split the difference. Negotiate like your life depends on it". Or it might be Jim Camp. Or it might be Tom Kinnaird. I don't remember who. But the idea is, when you're in the final negotiations with people, and again it's almost always procurement. Because it's procurement who's trained in negotiating. That's another point. We really need to be trained in negotiating to counteract those on the client side who are trained in negotiating. BLAIR: One of the tactics that they do is, after you've won, or you think you've won, they slow everything down. Procurement will say, "I'll get back to you in this time period", and then they'll take longer. You'll reach out to them and leave a message, and they'll just kind of stretch things out to make you sweat and to make you more nervous. That's the way they can extract more concessions from you. BLAIR: Again, if you think back to the formula that we talked about in Selling In One Lesson, P equals DB over D. Your power in the sale is a function of your desirability, is your desirability greater than your own desire? Because if it's not, if you're communicating that your desire for the client and the engagement is higher than the client's desire, then you have the least power in the relationship. The tactic when procurement is trying to slow things down to make you sweat is, you slow things down even more. If they take 24 hours to get back to you, you take 48 hours. You communicate to them that, "Yeah, that's fine. We're in no rush. I mean, if this is going to happen it's going to happen. If it isn't, that's fine too". BLAIR: It's almost a game of, and there are times when negotiating really is a game and it really should be fun. It's never fun if you're over-invested in the sale, right? DAVID: Yeah, right. BLAIR: But it should be fun, and you should play this game. Instead of being anxious you just play it out and outwait them. If they delay, you delay longer. If they say they can't speak for 48 hours, you say you can't speak for 96 hours, etc. DAVID: Just multiply by two. BLAIR: Yeah. DAVID: They're saying, "We need to slow this…
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