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I train a lot of salespeople in negotiation skills.
And that's one of the key things I get across is you've got to build this trusting collaborative relationship.
And how do you do that with procurement?
I mean, the follow on question now is like procurement the train to be emotionally detached.
So it's in our DNA, we're trained to be emotionally detached.
And why is that? You know, well, if you look at why emotional detachment is so important in the negotiation as a buyer, it's because a very good friend of mine Matthew many, many years ago said this to me, he said the moment you get emotionally attached to an outcome, you've lost the negotiation.
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Mike, thanks for joining us today.
Kwame it's been amazing to be invited.
So thank you very much indeed.
Yes, it is our pleasure.
So how would you get it started by telling us a little bit about yourself and what you do?
So I'm an ex -percurement director.
So I'm a buyer. So by training, I was a buyer, bought all sorts of goods and services for over probably 20 years.
And then what I did was I switched to the sell side.
On the buy side, I'd negotiate over half a billion dollars worth of goods and services in aggregate, then I switched on to the sell side, and I worked with sellers.
So what I now do is give sales people insights into who are these procurement people?
How do they work? How do they negotiate, most importantly, and how do you get a more balanced deal?
And that's what I love doing now.
Amazing, amazing. And Mike, let's make sure that the listeners know also about your show and the new study you've commissioned too.
Thank you, Kwame. So yeah, I've got a podcast show that's called Higgle the B2B sales club podcast.
And that's basically all about commercial people coming on a show, having a discussion with me very much like this all around commercial topics.
I love the format of podcasting.
It's a passion play.
I really enjoy it. I don't money out of the podcast.
I enjoy meeting really fascinating, interesting people.
Yeah, that's why I do the podcast.
Amazing. Yes, so everybody check out Mike's podcast.
We're going to put a link in the description.
And then I was also humble to hear that you listened to our show, too.
That is great. And for today, what we're going to talk about is this incredible new study that you have led.
And one of the things I mentioned to Mike before we got into it was just saying, I really appreciate that a practitioner is also leading this study.
Because there's so many times where we see these studies on persuasion done by people who are more academic, and then it makes it more difficult to translate those findings actually into the real world.
So I am just eager to hear about the study and how things turned out.
Thanks, Kwame. I'll give you some background on to why we did it.
So I was looking around for the last like two or three years, having worked with salespeople for a diagnostic tool, a diagnostic tool that would give salespeople a real insight into how do you negotiate better deals.
And I couldn't find one that suited my purpose.
So I built one, and it was an in depth study.
So it's 63 questions that takes probably, I don't know, 20 minutes, half an hour to fill in.
But why I did it was what I was fascinated with was if you look at salespeople and their ideal outcomes, you know, outcomes in terms of are they discounting on price?
We know that discounting and negotiation is a big topic.
Are they hitting their gross margins?
So what I did was we worked out what are the negotiation outcomes we're looking for?
And then what are the characteristics that these people are exhibiting?
And we ran this study on what we found was really interesting.
Do you want me to talk through the high level findings now?
Well, mate, without the useful, that'd be perfect.
Perfect. So it's a new study.
It's not been fully published yet.
And it's across 200 salespeople.
And these are the kind of key insights, what we found across all of these salespeople, these sales negotiators was there were four distinct profiles.
There was the analyzer, the preparer, the commander, and the trust builder.
And obviously, each of those have unique strengths and approaches in a negotiation.
However, one of them really stood out like one of them stood out above all the rest in terms of correlation between strong outcomes and characteristics.
And that was unsurprisingly the trust builder.
So the trust builder consistently outperforms other profiles in key sales outcomes, i .e.
win rates, achieving business outcomes, business objectives, driving up sales and renewals.
And if you look at the skills of the trust builder, what you find is the traits of them, empathetic listening, flexibility, critically problem solving, and a focus on creating mutually beneficial outcomes.
So obviously, if you want to develop trust builder skills, to be a better negotiator, you should focus on engineering mutually beneficial outcomes, be transparent, maintain transparency, avoid playing games, active listening, and maintaining flexibility.
So it'd be really interesting just to get your take Kwame on you've been in negotiation for many, many, many years.
Does that resonate with you in terms of the characteristics of successful negotiators?
This is one of the most validating things I've ever heard said on this podcast.
Thank you, Kwame. Incredible.
You know, we've been doing this for almost a decade, 1300 episodes in, and we've been listening to the world's best communicators and the world's best negotiators.
And what you demonstrated here with this study, just validates everything that everybody who's ever come on the show has ever said, right?
Because what's been so fascinating is that we have these people who are coming in negotiating multimillion dollar deals, the biggest deals that we could imagine sometimes into the billions, right?
And what always comes out, of course, they have great negotiation skills, that they always talk about trust.
And I think when we think about trust, sometimes we don't fully appreciate the power, the simple power behind trust, because what I recognize is that trust is merely a positive bias.
We can create trust in other people, but it gives you this benefit in so many different ways.
So if one person says something, and they are not trusted, it's going to sound very different from the same another person who says the exact same thing with trust.
So we can recognize that even our negotiation skills can be either diminished or amplified with trust, right?
And it's incredible.
And now we have to think about, Mike, how do we create this trust?
So I was trained many, many years ago by KPMG as a consultant.
And their training there was outstanding.
They were an amazing firm to work for.
Some things were obviously like in any firm, less good.
But the training that I received to be a consultant was fantastic.
And one thing they taught us was as a consultant, how do you build trust with a senior executive?
And there was a brilliant piece of work done by a guy called Meister back in the 1990s, I think, which was the trust equation.
And what they taught us was, and for anyone listening, I'll describe it briefly, Kwame, you can probably describe it in more detail than me.
But trust was made up of four components, basically.
So trust equals credibility, plus reliability, plus relationship, divided by self interest.
I the less self interested you are, the more the trust amplifies, the more self interested you are, the more trust diminishes.
So when you think about building trust with someone, a lot of salespeople would overindect on the relationship piece.
That's where they kind of start.
Whereas actually, if you look at very senior people in organizations that you're trying to negotiate with, and you want to build trust, one of the most important things is credibility.
Because if you're not credible, if you're not a domain expert, and they're short on time, why would they listen to you?
And then another aspect obviously is, if you're not tuned into them, because you're more tuned into yourself, they're going to turn off and they'll mistrust you.
And what was fascinating in the study was looking at that trust component being so critical and about the best negotiators in the sales environment, having that ability to empathize and to be really credible and be present with that counterparty.
Because what happens when I've been negotiating many, many deals, if someone makes a mistake in a negotiation, a tactical mistake in some way, if they've built trust with me, and if they're a collaborator, if they're trying to collaborate with me, they're a trust builder, I'll forgive small tactical
errors. But if someone's the commander, who is self interested, dogmatic, runs off their own agenda, and they make a mistake, ah, I'm less inclined to forgive that.
What are your thoughts?
Brilliant. It's brilliant.
It reminds me of this episode I did back in the day with Kim Ellsbach.
She had these studies that not just talked about the value of trust, but when you lose trust, how do you get it back?
And Mike, the thing that I learned from that episode is very simple, I do not want to lose people's trust.
It is a very, very difficult path forward.
And now let's broaden this a little bit outside of trust.
And then let's zoom back in.
Because I recognize that after years of doing the podcast and training people, there is a fear that people carry in these conversations.
And it's going to be different for different people.
But there's often this fear of making a mistake.
What do I do when I make a mistake?
And for me, I just say we recover, you're never going to have a perfect negotiation, you're always going to make mistakes.
If you talk long enough is going to happen.
But then you recover, right.
And I recognize now after hearing what you're saying is that and now I'm making an interesting connection, because I focused very, very heavily on building trust.
So when I make these inevitable mistakes and negotiations, there's no significant penalty because people give me the benefit of the doubt, it makes it so much easier to recover.
So we often think about trust as a mechanism to advance our interest in it for sure is but I never thought about trust as a shield to it protects us from our own mistakes.
And it does cause us to have unnecessary damage to the relationship in the process.
Yeah, exactly. And let me try something else with you, Kwame.
Something else that I think came through was if I'm trying to negotiate a deal with you, and we've built a trusting relationship over several interactions.
So it's a bigger deal.
And I say to you, interesting, you held out a position.
Let's say you said, look, our contract terms are we pay on 90 days, we never pay anything less.
It's a red line. And I said to you, Kwame, yo, just help me understand, why is it 90 days?
And are there any variances?
And you know, we're a small company.
And is there any time that you've ever in the past negotiated something less than 90 days?
What are your motivations, your interests around 90 days?
If you trust me, you'll know it's not a trick question.
It's a genuine question.
And I'm trying to understand what's motivating you and the organization.
If you don't trust me, and I'm being aggressive, overly assertive, domineering, you're just gonna say to me, it's 90 days, Mike, we're done.
You're so right. You're so right.
It's so interesting.
And as you were talking, I wrote down permission to push.
Yeah, we have the permission to push.
And I think about some of the deals that we get with usually it's somebody else on my team who and everybody on my team uses the same negotiation strategies, they listen to the podcast, too.
So they're on trust, you know, and it's incredible.
Because sometimes people will come to us and they're like, hey, we have 10 to 15 ,000 to do a training.
Yeah, we can put this together.
Then next thing I hear from my team is like, the deal is way bigger than what it started with.
And everybody is happy.
We're happy because we get to do more work and help more people.
And they're happy because they have more of their problems solved.
And they don't have their defenses up during the conversation because they trust us.
But the example that you gave us perfect, because if they don't trust you, if they think that you are completely self interested, if you're the commander type, who is constantly domineering and pushing without regard to what's going on in their end, they're like, hey, listen, Mike, in their head, they're
saying, I don't know why you're asking the question.
I'm not going to give you a real answer.
I'm not going to open myself up to you at all because it's probably going to be bad for me.
So those conversations don't even advance because of the lack of trust.
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Exactly right. Absolutely.
Definitely. I train a lot of sales people in negotiation skills.
And that's one of the key things I get across is you've got to build this trusting, collaborative relationship.
And how do you do that with procurement?
I mean, the follow on question now is like, procurement, the train to be emotionally detached.
So it's in our DNA, we're trained to be emotionally detached.
And why is that? You know, well, if you look at why emotional detachment is so important in the negotiation as a buyer, it's because a very good friend of mine, Mathew, many, many years ago said this to me, he said, the moment you get emotionally attached to an outcome, you've lost the negotiation.
The balance is now unbalanced, because I want it too much.
And I'm signaling to my counterparty, I want it too much.
So as a buyer, that's a bad place to be.
So what you find with a lot of procurement people is they're very standoffish, they're emotionally detached, they're very process, they're very numerate, and they're often short on time.
So you go, well, how do I build trust with someone like that?
Or my starting point is, you probably don't try and do it.
If it's your first encounter with that person, you need some warm up, you need in advance of the negotiation with a procurement person, I would advise that you have some to and for an email, you exchange some documents, maybe you talk about these objective criteria in negotiation, we like principles,
what are the principles around which we're going to agree and negotiated outcome.
Now, they might push back on quite a few things.
But to me, you're signaling to your counterparty early on, I'm here to collaborate, I'm here to work with you.
I'm here as a trust builder.
I'm here to get a great deal for you, which will also be a great deal for us.
That's what we're aiming for.
What's interesting is if you get no response back from procurement, if they basically ghost you, if they act as a commander, you might start to think, do I really want to negotiate with this counterparty?
Do I have a strong sales pipeline that allows me the choice to say, you know what, I've done the pre engagement, it didn't work, we've had our first interaction, they were really in my face, they were really pushy.
They had lots of red lines, and they weren't open to a discussion.
Maybe this isn't the deal for us.
Because probably it's a deal that isn't profitable for us.
And doesn't help us grow our business and grow their business.
There are signals, you're looking for signals, I think.
I agree 100 % Mike, and this the point that you're making about signals, I think on the surface without going deeper, it can sound really simple.
But there's so much to this, because this is something I recognize expert negotiators do all the time.
So yeah, we say something will engage in communication, not only to see what the response is, but we are measuring.
We're saying, hey, not what is the content of the response, though that's very helpful.
But there's something deeper.
I'm trying to read you who is that I'm talking to.
And I think about the trainings that we've done, because we've done procurement side and sales side.
And I think about the procurement people are always thinking about defense.
Hey, how do I make sure that they don't take advantage of me?
How do I protect myself?
And that defensive stance, it shows up in the conversation.
And I procurement leader, there's sometimes there can be a reputation about procurement that they're difficult to deal with.
It's because they're protecting themselves, protecting the interests of the company, right.
And I love this mentality, because we're saying, all right, from the sales side, we're going to send out these signals.
And then we're going to make a read.
Because sometimes people give away their power by saying no, this is the person I'm negotiating with, this is the company I'm negotiating with, I'm going to work really hard.
I'm going to break through, I'm going to melt the ice, and I'm going to get this deal done.
But you're saying, hey, no, let's bring this back to an entire sales strategy, which is bigger than this one instance.
And when you think about return on investment, and we're thinking about profitable deals, a lot of times we think about it just in terms of dollar and cents, but not about the amount of effort, time, energy, and emotionality that goes into getting that deal, which should be wrapped into profitability,
which could make it less profitable.
And so if we're doing a good job of salespeople building a big pipeline, then we have more options.
We have a stronger BATNA, and we have more leverage, so we can make a choice to see if this is the right person to negotiate with or not.
Correct. So something else, Kwame, a framework that your listeners may not have heard of, it's an unusual procurement framework.
So it's called the Krelgik matrix.
So it's called it's K -R -A -L -J -I -C Krelgik matrix.
And it's really simple.
And it's, it's a simple tool that allows salespeople to think about what they might face in the negotiation.
And it plays into what we've just said.
So there are two axes on the Krelgik matrix.
The vertical axis is the impact that you will have on their business, the profit impact, the sales impact, i .e.
the thing they're buying has got a big impact on sales or profit, or a small impact on sales or profit.
That's axis one. Yeah.
It's a big impact on sales or profit, or is a small impact on sales or profit.
The horizontal axis is scarcity of supply.
On the left hand side, are there thousands of suppliers that could do this?
On the right hand side, is it extremely rare, one, two or three suppliers?
Yeah. So we've got scarcity of supply on the bottom.
And we've got impact on the buyer on the left hand side, the vertical.
Imagine what happens.
Very high impact on the buyer, big profit impact, be sales impact, very scarce supply, one or two suppliers in the marketplace, you're in the top right hand corner of that matrix.
Yeah. Naturally, the procurement person will collaborate and be cooperative with the supplier.
Why? Because if I fail to do a deal, there is no one else in the marketplace.
So I will problem solve with you.
I will co create with you.
I will trade with you.
I'll make the pie bigger with you, because it's in my interest to now take the other extreme, there are thousands of suppliers, you've got virtually no impact on our profit or sales.
How will I behave Kwame?
How will I treat you?
It's a commodity. So as a salesperson, look at that crawljet matrix and work out where you are.
And that will give you lots of signals about how you might negotiate with your counterparty.
Wow, this is great.
I've never heard of the crawljet matrix.
This is powerful. And it's very instructive, too, because I feel good about where we are in the company.
Just like for me as a CEO, this gives me more dinklies.
That's great. But also, it helps me to recognize sometimes too, when salespeople ask these questions, how can I get the procurement person to care?
How can I get to be interested?
And depending on where you are in the matrix, it may simply not be possible.
Correct. It may not be possible, because you may just be a commodity supplier.
And therefore, you've got to really think about where you place your sales effort, and your negotiation time in a deal like that.
Hmm. I think for some people who are listening to this, that might be like a like a revelatory type of message where you have to kind of reanalyze your entire approach to negotiation.
Because you might recognize, hey, you know what, I might have been playing too defensively.
There are not many players in this industry that has a massive impact on their bottom line, I can really push hard to get a stronger relationship and co collaborate with the other person co create exactly and collaborate with the other person and move forward.
And then other people might be recognizing, hold on, I've been overplaying my hand, there is no way that I can get this procurement person interesting, interested in this, so I might need to use more of a volume strategy because there is a lower likelihood of success in this situation.
Right. Exactly. So volume based discounting, you might want to negotiate in a more commoditized area, you would negotiate a volume discount ladder, because then you'd go more volume, yes, we can get different price, because I'm now trading something I'm trading volume in exchange for price.
But obviously, Kwame simple tactic, which you probably teach on your program is as a buyer, we'll negotiate the volume discount.
So on 2000 units, and that's only half the price.
And I'll say that's great.
I'll take that price today.
And I promise to give you the volumes later.
But the volumes never turn up unsurprisingly.
So it's fine. But we'll do it retrospectively, shall we, we will negotiate a deal structure, which is as you hit volume thresholds, we will look in a rears at the volumes you've broken, and therefore give you a rebate on those volumes.
Is that okay? And then the procurement person will smile and go, Okay, fine.
All right, well, we'll do that, shall we?
It's like you're on to me.
Okay, you're good. This is brilliant.
And I think in such a short period of time, you have encapsulated so many of the challenges and clarified them to people who were probably feeling a lot of times that they were as if they were running into an invisible barrier.
What is it? I'm asking open ended questions.
I'm doing trust building strategies.
But for this person in this specific situation in this specific industry, for some reason, it's not breaking through.
And I recognize now, okay, we can look at this matrix and understand it.
And then just in general, for deal makers, this is so validating, because we hear so many people say trust, trust, trust is the key.
But now we have some actual robust literature from people who are practitioners in the field saying no, this is my strategy and still trust we're in supreme.
I think that is incredibly validating and exciting for those who are listeners, I'm not going to negotiate anything.
I was so excited to come on the show, because I think a lot of the audience that's listening, that are interested in negotiation, if they're in their foundation years of their negotiation journey, they need tools and techniques and insights to help them stop making mistakes that I made many, many years
ago. And that's why I love shows like this, because we can give to other people things that maybe we would have hoped to have learned many years ago.
Absolutely. Oh, Mike, I appreciate you.
This is great. And listeners, we will link to the study as well.
And just keep an eye out everybody listen to this, we're going to want to work with Mike to help get this information out there.
So we don't know exactly what this is going to look like.
But there'll be some kind of content collaboration and just keep an eye out because we both want to help as many people as we can.
And Mike, before you go, just make sure the listeners know about your show and how they could work with you too.
Brilliant, thank you.
So Mike Lander, so you can find me on LinkedIn.
That's best to find me.
My show is called Higgle H -I -G -G -L -E, colon, the B2B Sales for podcast.
And I work with all sorts of sales teams, very, very large, and also smaller ones on helping them understand when you meet bigger companies, and you meet these difficult people that train negotiators, how do you negotiate better deals with them?
So after you work with me, you'll sell more, you'll not be afraid of procurement, and you'll negotiate more profitable deals.
Amazing, Mike, thank you so much for joining us really appreciate it.
Well, thank you for inviting me thoroughly enjoyable.
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