Episode 33: Micro-negotiations in everyday life

Alex: 0:05

Welcome to Decoding Sales, a podcast where an engineer, that's me, Alex, and a salesperson,

Peter: 0:12

that's me, Peter

Alex: 0:13

talk about the art and science of sales as it relates to life and business. In this episode, we are gonna bring together life and business. We're gonna cover how to negotiate in everyday life, all those micro transactions that you think, should I be negotiating? Should I ask for something here? How can you do that? How can you not leave opportunity on the table? And, what are the right phrases, the right keywords, and the right moments to do that. Peter's gonna take us behind the scenes as a salesperson and show us how we can use his sales tactics throughout our everyday lives. Before we dive into the content of this episode, I wanna give a special shout out to our sponsors at Salesroom.com. Peter, I know that you have been a big fan of Salesroom. I'd love to open it up for you to tell us a little bit about why are they such a great tool and why are they one of our sponsors.

Peter: 0:59

Sure. Yeah. I'm a huge believer in their platform. They're the first and only video conferencing platform for sales people and for the sales process specifically. To give you an example of one of their amazing features, imagine hearing about a competitor or a specific keyword live on a call, and seeing cue cards to be able to address those topics in real time, even if those topics are hairy or difficult to answer. Um, with, with traditional video conferencing and without those aids, so very excited about what they're doing. That's just one of the things that they're focused on and, and there's a lot more that they're gonna be developing over the next few years, um, for modern sellers that are, that are looking to up their game in the virtual world.

Alex: 1:38

All right, well if that gets you excited and I hope it does, please go to Salesroom.com and check them out. They are open for business and they would be excited to work with you. All right, let's dive in. In my life recently, I've had a few examples of micro negotiations and kind of inspired actually by our conversations, um, and, and sort of how to think about how to ask for things in ways that are, um, you know, reasonable that are gonna maintain the relationship, but also indicate an interest in knowing if there's a better deal. So, just a, a couple of examples that I'll, I'll share with you here. Um, one is, You know, with the, the nonprofit I work at, I do a lot of our, our finance work and so I was talking to our bank and I noticed that our, uh, our bank's interest rates for the money market account were like pretty far off from the, uh, current federal funds rate from the Federal Reserve. And so I did a little research and I just, I asked them like, what's the, what's the plan? When are these numbers gonna go up? Like, I'm seeing these numbers and you know, this, the number you have, you're showing me isn't very competitive. Um, and they, they came back and actually were able to give us a, a little bit of a boost over their published rates.

Peter: 2:47

Oh, great.

Alex: 2:47

I, I guess I should say, I, I asked this after the published rates. They sent me the published rates. So, um, you know, I was kind of pointing out that discrepancy and, and so we've, we've gotten an improvement and it's worth, you know, probably at least a few thousand dollars a year for us to just me asking that one question really.

Peter: 3:04

Oh, that's great. And, and what was their, did they have any, um, did they have any rational reason for why it was below their published rates? Like before you asked?

Alex: 3:15

I probably should have, I probably should have asked that. I, I still don't know why their published rates are so far below the federal funds rate. Maybe I could have gotten us more if I could have asked that question of like, well, so why is there this gap? Why does it take so long? Um, and you know, at some point maybe they can't change it. But I actually don't know. It's a good question.

Peter: 3:33

Yeah, that, that's probably one thing I would've done is like ask like, so why was there this this discrepancy? You know, I just want to educate myself a little bit. And also like what makes you have the ability to give us what's above the publish rate even, right? Like what are the indicators on our account that allow you to do that? Because then you can start to right size, like where you are as a customer to them. Cause I'm assuming you're a pretty valuable customer depending on how much is in that account, right? And so those are the types of things that I like to do is like go even deeper. And get on a human level with that person to have them like reveal a little bit more behind the curtain what's happening.

Alex: 4:07

Hmm. Oh, I like that. So, so that, that idea of like just asking to be educated.

Peter: 4:12

Yeah. Yeah. That's the phrasing I use. Yeah. I just want to be educated and, and sometimes I also say to be frank, you know, like, you seem like a great banker and we like working with you. I don't know, do you have a, a regular banker you work with or

Alex: 4:24

We, we do

Peter: 4:26

Oh, good. Yeah. And you could say, Hey, I like working with you, but I feel a little bit caught off guard here. You know, if I didn't ask this, I feel like we would've gone down this path for God knows, you know, how many months. So, Given that, what is that? What is it that you can do? I, I appreciate that you're, we're now above the publish rate, but I'd like to get a little bit more context as to what happened here.

Alex: 4:46

Hmm.

Peter: 4:46

And then you're like baking in logic. And if that was, if the banker was in the same situation, I'm sure he or she would've felt reasonable about that line of questioning. And you can also see that in my line of questioning, I'm not telling the banker it's his or her fault. I'm saying we, I started with, we like working with you, but, and I think that allows the other person to put their guard down a little bit and really reveal what's going on. Because who knows, it could be something at the bank, it could be a clerical mistake that, that he or she made. But you know, being really combative initially doesn't give you those types of answers. Right.

Alex: 5:21

Hmm. Right. That's, that's really helpful, Peter. I'm, uh, I'm looking forward to our next negotiation

Peter: 5:26

Yeah. Great.

Alex: 5:27

for, for something like this. so, so that's one example. Um, I'll give you another example. Recently I had a, had a friend of mine reach out about asking me to do a, a talk, um, at his company. And, um, you know, I've been, I've been thinking about, you know, having done a lot of podcasting. Now maybe setting it up where I'll ask people to pay me for these talks. Um, so I, I responded with, um, well, what's, what's your, what's your budget? And he came back with a number that was kind of in my range. Uh, well actually first asked like, what, you know, what are you looking for? And I was actually pretty transparent and I was saying, you know, like, this is, this is like an early, uh, foray into, to charging for, for these kind of activities. I'm looking for, you know, something in, in this particular range, but pretty flexible. He came, you know, I, I didn't wanna push him away. Obviously this person's a friend, um, and, uh, he came back, was able to get something, you know, a little bit above the bottom end of the range. And, and then I, of course did the, did the talk. I didn't kind of keep pushing, uh, but I, that, that was one of those moments where it was going from zero to, to something positive and I felt really good about it.

Peter: 6:31

That's great.

Alex: 6:33

you know, now feel a little bit more confident for future negotiations of having a benchmark. Um, but, uh, I'm curious how you would've approached this, and I, I know you do a lot of advising and, and things like that, so you probably got a, a good playbook here.

Peter: 6:44

Yeah, there's a couple things. I think that, and, and maybe you did this, so I'll ask you a few questions like did you ask what other speakers that they've had at this company so that you can kind of compare and contrast to what you can offer?

Alex: 6:55

Hmm. No.

Peter: 6:57

Okay. Yeah. I think that's great. Right, and, and I'm, I'm glad you started with what is your speaker or speaker budget, I think is how you phrased. And then the next logical question is, who have you had as speakers before, right? And why are you looking at me? And the answer could be, oh, this is the first time we're having this speaking series, which is a different set of negotiation tactics. And from there on, because there's no baseline. Or they could say, oh, we've had these three or four CTOs VPs event from these types of companies, and we're looking at you, Alex, because nobody has the Dropbox plus nonprofit angle that you do. And I've listened to a couple of your episodes and think you do well, right? So, getting that sort of color is really important because then you know how much you can charge because let's say they have had three speakers, and the three speakers have have charged maybe three times what's in your range? You should ask that too. You should say, okay, for this type of person, they have about the same experience. What did they, what did you pay them? Then you can start to negotiate based off of what their reference point is, right? Because otherwise I do this in software purchases too. I ask like, Hey, what did you spend for your last security platform? And if you're close with the person, which you are with this person, they'll tell you. They'll say, Hey, my, my highest budget line item is 200 K. So then you understand, okay, well I was gonna charge them 50 K, but maybe I could get a little bit closer to 200 because even at a hundred K, that's half of what their highest spend is. So that, that's the first thing I would've asked. Yeah. Any, any reactions or thoughts to that? Do you think that could have worked?

Alex: 8:21

Well, I, I think in this case I did have a little context. Um, I should go back and look. This is all over text message actually. So I'm gonna go look at my text message history and see, see how it went down. Um,

Peter: 8:32

That's the first thing. The second thing, while you do that actually, since you'll, you'll probably need to search that for a couple minutes. The, the second thing is, um, and maybe you did this, you probably did this. Like what was the feedback after the talk?

Alex: 8:43

It was positive.

Peter: 8:44

Great. Perfect. So then the next thing is if it was positive, you know, I would try and parlay that into other engagements, right? It doesn't have to be with that company, obviously, because you've already given that talk. But ask that person, especially if there was a little bit of a discount that you gave them up front to say, Hey, like, I was willing to do this for half of what my usual rate is in exchange. Would you mind tweeting about the talk or, you know, I really enjoyed it myself. Do you have any other companies like yours that might be looking for speakers? Right. Cause then you start to actually like build in a consistent pipeline as well. You start to build a pipeline of something that you've invested a ton of time into. And so that's the other thing I would've done is try to see if you could actually piece it into a package deal, or at least like get network effect, like positive network effects out of it in the form of a referral or introduction.

Alex: 9:34

Yeah, well, maybe I should go back and, and ask ask him to, uh, put a little bit of a good word out to other folks who might be interested.

Peter: 9:41

Yeah. And I, I'd love to listen to the talk myself too, if it's, if it's shareable, but I think you could definitely like market it, right? And you can ask the person if you can use elements or snippets of it to, you know, continue to promote yourself down this track, especially if you enjoy doing it for this company.

Alex: 9:58

yeah. Well, we didn't actually record it. It was off the, kind of off the, off the recording record.

Peter: 10:02

Oh, good. Amazing. Amazing. Yeah. So I mean, if you don't have that, you could still write, like use that talk through references of people who actually were at the talk. Right. And then the other thing I would do is like what, in terms of the positive feedback, was it from one person or did multiple people at the company? Oh, good. That's amazing. Yeah. So I would like get those nuggets and figure out if you could scale it for your next thing, your next talk. Right. Cause there are people there who probably were talking about you afterwards, hopefully. Um, and you could even do some user research and say, Hey, like can I actually do a debrief with you? I'm glad it was positive, but you know, would love to sit down and, you know, do like a quick 15 minute, um, gut check around what parts of the talk were actually compelling and which weren't. Because I'm sure there are parts of the session that weren't good too. And that'll also like, help you, I mean, maybe everything was great Alex, cuz you're, you're a great speaker, but you know, you want to invite that sort of thing so that you can continue to improve beyond the fact too. It's almost like that is a product in itself and that's v1. And so like what is V2 of it gonna be and what do you get out of it beyond charging because there's a lot of value from just feedback alone too.

Alex: 11:14

That's such a good point. Yeah. That's, uh, I've got some action items from this, from this podcast.

Peter: 11:19

Good. Good. Perfect. Yeah, see, it's like, and, and it's a sales tactic, right? Because true, like truly best in class salespeople are always asking for feedback even after the deal. You know, even after we close a deal, we ask like, what about that deal process was good and what wasn't good, right? And you're also constantly selling the customer, especially if you're in SaaS, you know, year two is another sale, right? So, Being able to actually take a interaction and look at the long game, which is not just that interaction, it's actually like five or six interactions beyond that, and it's actually the interaction within the, within the network that you can foster from that one interaction. I think that's like really key to sales and, and good salespeople. Yeah. Mmm.

Alex: 12:01

Can let's, I'd love to talk a little bit about how you'd apply that in like a vendor context. Um, cause I think this is another pretty common like, negotiation and I mean, vendor could be like, you know, the person who cleans your house, or it could be the accounting firm that handles your books or it could be any of these things could be your outsourced IT. Like there's a lot of things in life. There's a lot of things in business where this is useful. And, um, you know how, just to take like an example, somebody gives you a, a quote, they give you sort of like a range of hours, come back with a number. Where do you start the conversation when you're trying to negotiate the price on something like that?

Peter: 12:37

Yeah, so I mean, let's just give a very mundane example. Let's say it's like a roofing contractor, right? And they come back to you with a quote to repair your roof. The first thing I would do as a buyer, and I'm sure a lot of homeowners do this too, is figure out whether or not that was reasonable based off what was in your head. And typically when you're reaching out to contractors and getting a quote, you've already presumably done some research in the market, talked to your neighbors about what they paid. And so if, if the, let's take the instance where the price is higher than you think, cuz that's where like, you know, the, the clashes happen. I would just tell the roofing contractor right out, um, up front. This is a lot higher than what I expected, especially given my research. Can you unpack why it's so much higher? I thought it was gonna be$2,000, but you're quoting me 4,000, so there must be something in the quality of your work or something that I'm not getting, and then that's where I stop and then have them talk about what their services are. And you know, maybe they'll say, well, like we have extra, you know, we, we have much more experience in this space. Like we have 30 years experience and you know, we're also gonna make sure we spend five hours on your roof. A lot of people only spend half the time cuz they just want to get through it and be done with it. You know, let's say they say that, then I would say, okay, still though, like you're way above the market, what can we do to bring the price down? Is there anything else we could do? Right?

Alex: 13:56

Hmm.

Peter: 13:56

to like dig into, by the way, like what type of job is this for you, right? Um, is it typical? Like what size home do you service? Cause if the person says, oh, typically we service like half the size of your house, and you know, okay, maybe this person is actually trying to take advantage. If they're like, oh, actually like we service like commercial properties as well as like mansions, then you're like, okay, we're a small fish, right? If you don't have a mansion, and so maybe then you get a sense for, okay, maybe the quality of this person's work is high, right? So you start to, you know what I did with your speaking engagement, I can start to do with any vendor. It's like, what types of customers you service? Where do I fit in that priority list, right? Because you want to be an important customer. Also, how can you use research to have them react to why their price is a certain level, right? Why is the price the price? Because there's always some context that you know, either is gonna sell you or is gonna seem like bullshit, right?

Alex: 14:52

So what I'm hearing, I hear a few things in there. I want to just tease this out. It seems like one of the things, you know, obviously you wanna start with some kind of grounding of what, what you expected the price to, but it seems like you sort of start with like, help me understand the price. What, like, help me understand what, what goes into

Peter: 15:07

Yep.

Alex: 15:08

And then you sort of bring in a couple other tactics. One is understanding where you stack as a customer with their other customers so that you understand how they're thinking about.

Peter: 15:18

Yep. Exactly. Yep.

Alex: 15:20

and then the, third is just kind of asking that question. I like that phrasing. So what could we do to bring the price down?

Peter: 15:27

Yeah, exactly. And there could be, you know, in that third component, you could also sell yourself, right? You could say, Hey, like the roof is actually in great condition, you know, as you know. So it's actually not gonna be a$5,000 job for you. So can we bring it down, right? Cause like I see on your site you've dealt with some gnarly roofing situations, right? And so you could like sell yourself as like the buyer even to say, Hey, like I'm actually not gonna like eat up as much of your time. You can also say, I'm gonna pay you right away. Like, can I pay you in cash versus credit card, right? Because cash is gonna be more valuable. Will that help you? By the way, I know three neighbors were also talking about their roofs as well. So if you do a good job with me, even if you know, it's at a discount I might be able to introduce you to three new customers. Right? And then again, like this all ties together. If, if this person is wanting to increase their Rolodex size right, or they're trying to gain more customers, then you know that you can use those types of tactics to make yourself more valuable in getting a discount and getting what you want. So these are things that I also try to do is understand like, what is your motivation at working with me? Because it's not always like the best sellers-- it's not just that one interaction. Same thing with like car sales people, right? Like if you go to a fancy car dealer, it's never like the first car that a buyer buys that that seller is looking for. You know, oftentimes they'll even say this up front. They'll be like, oh, I'm gonna get you upgraded in the next few years to something else. So knowing that you can have a lot more negotiation power because it's not just about buying a sports car. It's not just about buying a, you know, a, an SUV. Car salespeople, like good ones, look at building relationships and they see you as like a single man, let's say, having a family someday and then going back to that person to get a good deal on a car. Like so I think like buyers need to understand that and and leverage that to get discounts not only off the first interaction, but throughout the life cycle of working with a specific seller or vendor.

Alex: 17:24

do so. So just to, to kind of build that out, you're saying as part of understanding where you rank as a customer, also, like promoting your own rank a little bit.

Peter: 17:34

Totally.

Alex: 17:35

explaining what you bring to the table, whether it be speed of payment, which we, we do at USDR. We're very speedy at paying, or being easy to work with or having a job that, uh, could lead to referrals or upsells later. Uh, like really having a clear picture of yourself in the market as a multi- time customer, what that would look like for someone and like an advocate for the vendor can really help them understand why they would wanna work with you as a long-term vendor rather than a kind of a more short-term relationship.

Peter: 18:08

Exactly. Yeah. And there's multiple examples of this, even in like buying houses, real estate agents don't look at just selling a single home or representing you for that one transaction. They wanna represent you throughout the lifetime of you buying homes, which is why real estate agents do this thing where like they'll say, oh, hey, I'm gonna give you part of my commission. Or you know, they give you nice gifts after the home closes, right? you know, they want to be able to stay with you as you upgrade your home. And most people, you know, hopefully if they're successful, are gonna upgrade their home, not downgrade.

Alex: 18:41

or if they, even if they downgrade it, that's another transaction for

Peter: 18:44

them.

Alex: 18:45

Real estate agent, if it's, If they downsize when they're, when they get older or whatever.

Peter: 18:50

And so that I think like makes me more confident in day-to-day life to like negotiate with people that I'm buying from because I know that like, you know, oftentimes there's another transaction that's gonna happen. And then Also, like, I ask the questions around what motivates, what is motivating them to sell something. You know, even something as simple as like in a retail store, let's say you're gonna buy a TV, which I'm gonna buy a new TV when we move into our new house. Like there might be a situation, and there have been situations where TV salespeople even like, are pushing a specific model. So in some instances I'll be like, Hey, by the way, like, and sometimes I'll say this in a joking way, like, are you incentivized to get these LGS out the door? You know, like, do you have, how many do you have in the back? Right, because that tells you a little bit about the seller's incentives. You know, who knows, maybe they have a deal at Best Buy where they tell their sellers, Hey listen, we got like 50 of these. We gotta get rid of 49 because they're at the end of their life term. Understanding that and like asking that question, and by the way, a lot of sellers will be honest with you about that, like puts you in a much different position, right? Cause then you then you can start to get into the mindset of, okay, these guys are desperate to get rid of these. You know, maybe I'll wait and come back when they're out of date and maybe they'll be another sale. Or if they really want to get rid of it on the spot, maybe I can get a little bit more of a discount. Or, you know, get a free TV mount in in the deal. Like these are things that you have to understand the situation at the seller to be able to understand where to negotiate.

Alex: 20:16

Yeah, so like, let's take that TV example real quick. I think it's really interesting when maybe they are like trying to get the TVs out the door. Um, and you, you know, you want a TV, you wanna leave there with a TV yourself. But you want to kind of match, uh, match their desires, uh, to get rid of the television with, uh, you know, your desire to not pay too much for the television. Like, what do you do at that point? How do you use that information to get the better deal?

Peter: 20:39

Yeah, I, I would just say upfront like, Hey, listen, you, you want to sell this tv? It seems like you're really motivated and I want to get, get out of here with the tv. Can you knock down$500 or whatever it is that you want out of the deal. Just be upfront about it. Right. And if they're having difficulty with it, you know, if you're in a physical location, you could just leave the store. I've done that before, you know, just leave the store and say, Hey, thanks for the information. I'm gonna think about it. I'll come back in a couple days, and this has happened to me with my last TV where the guy comes back and he is like, okay, what if we did$400 off?

Alex: 21:13

Mm

Peter: 21:13

You know, you hold your ground and say, ah, that's still not 500. Cause at that point, you know, the seller's not gonna lose a deal off of a hundred dollars if you're buying like a$2,000 tv. Right. Just be silly, silly to give that up. So at this point, the seller's given up their cards and you could still leave the store. And then when they come back, it becomes, when you come back to the store, it becomes even more urgent for them. Or you know, the whole like, let me get my manager trick. You've heard that before, right? Let me go talk to management. You know, most of the times people don't even talk to management. By the way, when sales people say that, it's just a tactic to make you feel like you're getting something special that you should take advantage of. And I think a lot of buyers will react to it, even if it's not the ideal price they want. There's this whole like, oh, let's meet halfway concept. I don't really believe in that. If there's like an ideal price you want to pay, if there's an ideal price you want to pay, you shouldn't go halfway. You should get that price.

Alex: 22:07

Hmm.

Peter: 22:07

Oftentimes for sellers, because they're selling so many of X, they will meet you right at that price unless there really is a management blocker or something like that. But most of the time I found even in, especially for large ticket purchases, a seller's not going to lose a deal off a couple hundred, couple thousand dollars.

Alex: 22:27

That was really interesting. I just wanna play this back. So you're saying like you let, you're going to Best Buy, you talk to the salesperson, you asked them like, Hey, you seem really, it seems like you're really motivated to get this one out. The market, off the market is, they're like, something going on and they're like, yeah, I gotta, I gotta move these like fast. You're like, okay, cool, cool, cool. You know, I also wanna get walk outta here with the tv. Can you knock$500 off the price? And they're like, let me check, check with their manager. They come back, they're like, I, I can do four hundred, that's what you're saying. What you're, and you're saying at that point you're like, cool, well I can do 500 off with 500 off. I can do it otherwise I'm heading out and then like, you know, like you head out, like is that how that plays out?

Peter: 23:03

Yeah. Yeah, you could do that. I mean, there's other tactics too, by the way. That's like if you want to be super, like the honest buyer, you do that. In some cases you might want to like shoot higher, right? And say, Hey, I want a thousand dollars off. Knowing that they're gonna try and meet you in the middle at 500. But the, the point is that whatever you do in either of those situations, like you have to stand firm on the price that you want. Otherwise you're gonna have buyers remorse right? When you come out of there. Right. And I've seen both work, right? You can be super honest about it and just. Like stand your ground, um, or you can shoot higher. Like I said, the other thing too is again, it all goes back to understanding the motivations of the seller, right? Like, if the seller is really confident in selling a piece of hardware or even software at a given price, and you're going too far below, the seller might not be motivated to sell to you. might call your bluff. So this is where you need to understand where the seller is. Maybe the Best Buy salesperson isn't actually comped on dollars. Maybe it's number of units, right, that go out the door. Cause then like, those are two very different things, right? Um, the, the latter, like you probably will get a much bigger discount, but maybe it's also a combination of the two. Right? And maybe it's like the Best Buy sellers already hit their quota for dollar amount for sales. They need to sell two more units to hit their quantity amount, right? You just don't know, like depending on the day and the type of retail store that it is, which is why I find it fascinating to really like build a certain level of rapport where you can ask the person like, how can I help you? Right? Is it units, is it dollars? Right?'cause if it was a smart seller, maybe like, maybe I'm looking at one tv, but maybe at some point I'm gonna buy two or three. The seller would be like, actually, like buying more units would help me out. Let me give you 50% off two units. You know? Then you might actually buy two TVs, right? So there's this like song and dance and this collaborative thing that happens, I think

Alex: 24:57

How, how do you get into that? How do you get into that? Like, you know, somebody's like selling you a tv, maybe you've joked around about their incentives a little bit. How do you get to like that question of asking them like, how can I help you? How that, that feels like a big leap from, from where we started the in the conversation. So what's the bridge phrasing wise to get to that point?

Peter: 25:16

Yeah, I, I think the bridge is, Hey, we've been talking for a while. It seems like you're really motivated to sell this and I'm really motivated to buy this. By the way, I use this all the time cuz I'm in sales. So I say, by the way, I'm in sales too. So I, I want to be able to help you out. Like, what is it that you're being judged on and how can we get to a place where you can sell this and I can buy it? Right.

Alex: 25:35

Hmm,

Peter: 25:36

You know, like, or you know, the, what you could say is, Hey, you're like really reluctant to bring this down 50 more dollars. And it just seems pretty trivial to me. Like what is the reason? Like I'm in sales too. Like are you truly blocked or is there something else that I'm missing? You know? And so like that's how I ask it. And obviously for those listeners who aren't in sales, you could say, Hey, like I know how sales works and I love working with salespeople. I just wanna understand where your motivations are so I can map them up with the discount I'm trying to get. And by the way, I'm like, you know, the founder of XYZ Startup and I'm gonna come back to this store and I'd love to work with you, but I would love for you to make me a good deal so that I'm incentivized to come back to you specifically.

Alex: 26:20

Wow. I like this Peter, I wanna wa, I wanna go like to Best Buy with you.

Peter: 26:26

Yeah, I mean it's, it's fun, right? Like especially for these like big ticket items, like definitely there's negotiation involved. It's never, it's never like straightforward, which is why all these hardware stores have sales all the time,

Alex: 26:38

Hmm.

Peter: 26:38

right? Which is another thing you can use too. They're like, oh, we have a sale here right now for 30% off. And you could say, well, you guys have sales all the time, so, Can I ask why is this 30% off right now and next week is it gonna be 50% off?

Alex: 26:52

You're always, it's all it's, you know, for you it's, it's, it's, it's all about what's the why? Help me understand and really getting at their constraints where you stand as a customer, pushing, selling yourself as a customer. So you sort of shift that why around a little bit. and then just ask like, there's a big portion that I'm hearing here, just like, just ask.

Peter: 27:11

Yeah, and actually like a lot of my friends and my wife, they get like nervous when I'm about to ask, so, you know, like even at a restaurant, if I could ask like, you know, like, Hey, could you guys just throw in a few extra appetizers? We've just ordered, ordered a big meal, you know, or like, you know. Oh, yeah. Or, or if a server recognizes you at a restaurant, be like, yeah, we've been here five times. I'm waiting for that free chicken wing bundle, you know? Right. Like, you know, there's like, yeah, people get nervous because Yeah I'm like shameless in asking actually. And it's all about making a joke out of it, or being light about it or making it clear that you're asking, because you're also curious, because I am actually really curious just about pricing models, not just in in B2B context, but also in like consumer context. I'm really curious, like, why does Nike have a sale at a given point in time? And of course there's like a whole science behind something like that, but, um, it, it's, it's like a really interesting thing to dive into if every day you're looking for deals. Right. And, um, it, it sharpens my ability. I think also just to like understand people, right? At the end of the day, cuz like a salesperson is a salesperson at the end of the

Alex: 28:21

day. I, I gotta say, I, I, I'm so empathizing with your wife right now. Just like, I'm like, what? At a restaurant? Oh my God.

Peter: 28:29

I know. I know, right? Yeah. And some people think it's embarrassing, but you know, you gotta ask. Right. And I think people,

Alex: 28:36

it is like you're at the restaurant, you wanna have a nice relaxing meal and like, now you've turned it into like a high stakes negotiation where if you don't get your appetizers, you feel like you lost, you know,

Peter: 28:45

Yeah. Yeah. That's so funny. That's so funny. And you know, it's, it's not even like, I kind of like joke about that. Like, I don't do that all the time, obviously. Like, don't worry if we go to high end restaurant, I'm not gonna try and get us 50% off.

Alex: 28:56

wait, that's like the time I want you to go to like the French Laundry or like, you know, um, Atelier Crenn or something and like negotiate down if that's where it's expensive.

Peter: 29:06

Yeah, totally. Well actually for high end places, cuz you know we've done a few high end events through my company and also, you know, just like personally going to nice restaurants, there's a different way to sell people in that context. Right. And it's not outright asking for the fact that you want 50% off that like$300 steak, right? Cause that's really off putting. But there's instances where, you know, you get to know the bartenders, you get to know the servers, and you understand, again, the context of where they are. Remember, most of the time, they're dealing with really high net worth people who are not very nice. So in a nice restaurant, I focus a lot of time just getting, trying to be nice to the servers, getting to know them, being super appreciative of what they're doing. You know, when we had this like whiskey tasting event at this, um, really nice hotel in Detroit for KubeCon, I spent a lot of time just getting to know the person making drinks. Right. And she like would open up about stories around how she's seen all these, like celebrities come to the bar and you know, just like really being nice to her about the fact that she's giving us high level service. And, you know, at the end of it, she gave us like a bunch of free whiskey drinks and then also brought out something from the back, right? Like really like rare whiskey that she served to my team. Right? And that's because, you know, it's, it's not because I asked for it, but it's because I felt like I understood the context of where she was, which is that a lot of people probably just treat the experience as a transaction being served drinks. But at the end of the day, these are people with families and they're, they're working hard. They're working on a Wednesday evening, even though they have kids. And I think a lot of what you could do to, to get additional things is not just a discount. It can be also like based off the experience and how you treat people, right? Because people who sell, want to treat people who treat them well in a much better way. And I have experience with this too. Like my prospects who are really nice and respectful with my time, I want to actually help out. I don't like the hardball negotiators, right? Because I deal with a lot of'em. And usually like those people end up giving in anyways because they see the value of the product. So again, it's context, right? Um, and, and so I think that's, that's really important to tease out if you're negotiating with somebody who's selling you.

Alex: 31:17

How does this differ if you're negotiating with somebody that you-- have like you're friends with or you have a longer term relationship with versus more of the transact, what might seem like transactional. I know we're talking about it's could be multiple sales at the Best Buy or something like that, but you know, it might not be. So, uh, if you've already got that relationship, how is it, how does it play out differently?

Peter: 31:37

Yeah, I mean, if you already have a friendship and a relationship, I think you should always give your friends a better discount. You know, there's the word friends discount for a reason. But at the same time, um, once you get through that, you know that that discount isn't gonna be giving a hundred percent off, right? So you still have to at the end of the day explain your services, explain why you're giving more of a discount than everybody else. It's because you're friends, but also make sure they understand as your friend what value they're getting. Right. And I think that's still really important to say, Hey, like Alex, we're friends. I'm gonna give you 50% off. But the reason why it's actually a$10,000 engagement is because this is what I do and you're gonna get everything right. And the only thing I ask as your friend is, If you like the experience, if you don't, be honest with me as a friend too, cuz that's, you know, what friendships are for. But if you like the experience, just introduce me with a few more people because I'm, I'm okay breaking even on this because again, we're friends, but I would like to, I'm, I'm trying to make a business out of what I'm doing. Um,

Alex: 32:38

Mm-hmm. Mm-hmm. Yeah. I like that. That's, it's very principled. Um, kinda helping understand like, hey, this is value. You know, if, if you, the problem with just giving a discount, if somebody doesn't understand the value, is they'll, you know, they might feel like it's not worth it. They're,

Peter: 32:54

Exactly.

Alex: 32:55

you know, you don't want them to feel like they're not getting the best deal. You don't want them to feel like they should, they could be taking advantage of you, although their friend's probably not gonna happen, but,

Peter: 33:03

Yeah, totally. Yeah. And, and you know, friends, I use liberally, obviously there's gonna be close friends and friends that aren't as close to you, but you know, if they're in your network and they've done something positive for you, you know, and like you respect other person, you should be, I'm like one of those people who likes to be liberal with discounts because I think there's more value in the network effects of how you treat your network.

Alex: 33:26

Mm-hmm.

Peter: 33:27

And the reputation that goes behind that versus like trying to charge an extra 20, 30%.

Alex: 33:33

Totally. You know, Peter, I think it'd be really fun. Um, we gotta get you up here in San Francisco sometime, um, and maybe when you're visiting a conference and go do a little micro negotiation in a, you know, a store and kind of record it. Let people sort of see you in action live, uh, getting me a cheaper television or something.

Peter: 33:54

be fun. Yeah. Maybe it's like at a burrito shop or something. See if I could get two for one deal.

Alex: 33:59

Oh my God. I would be so impressed. That'd be amazing. You know, we'll, we'll keep going to burrito shops until we get the one we record. We won't tell everyone it took 15 shops

Peter: 34:07

Yeah. Yeah, exactly right. Oh my gosh. Oh my gosh. So funny.

Alex: 34:11

Um, yeah. So I guess one other question here. Once you enter into a contract for a, a service as a, as a buyer with like maybe one of these vendors, uh, renewals come up in a year. Like how do you, how do you approach that?

Peter: 34:24

Yeah, I think the, the way that I approach that is first of all, figure out what the value of that platform has been for the year and be really solid on that. And so, you know, for us, if we're buying like a sales or marketing tool, I would actually go to the people using the platform, go to the people administering the platform, figure out how crucial is this, could we do without it? Or has this really changed the trajectory of our

Alex: 34:46

company.

Peter: 34:46

obviously the most easiest sales platforms to renew are if we say, oh, actually we were able to generate X amount more dollars because of this platform alone. Right? So getting that understanding first is key. Now, once you have that, obviously you're not gonna give that to the vendor. You're not gonna say, Hey, this thing has been the best thing, um, since slice bread, because then you're probably going to either pay what you did or more because a lot of vendors try and hike prices. So then what we do with that is introduce some internal pressure, right? And for our company, Right now, especially like every line item is under scrutiny cuz of like the macroeconomic conditions and the fear of what might happen in 2023. So I bring that into conversations as not a way to just willy-nilly bring down the contract value, but to have folks understand the context of what I'm dealing with, which is I'm asked reduce contract values across the board. I'm asked to not spend any more money on new platforms. So where I can, I'm gonna consolidate and explain that to the vendor and then see what kind of price you can get based off of that context, right? And say, Hey, given I'm in this difficult position, what can you do to bring the contract value down for us?

Alex: 35:55

Mm. I like

Peter: 35:56

Yeah. And so, so that, that, that's in the case where like you, like the vendor want to keep them and you're in this kind of like macroeconomic condition. If you don't like the vendor, or let's say like you like the vendor, but there's not really a business value that it's bringing in the first year, it doesn't mean it's not gonna bring value in the second year. There's a lot of things that could have happened. Maybe you didn't administer the tool correctly, or you didn't set up or deploy it in the right amount of time, so you just have to make the decision. Do you want to keep the vendor or not? If you wanna keep the vendor and give them a shot in year two, you have to explain what you've been going through. You have to say, Hey, listen, I believe in your product, but we haven't seen the value. Either I'm gonna cut it out of our budget, or you're gonna gimme a really good deal so I can figure out the value of the product. And by the way, it's not just like lowering the price. We definitely have to do that foundationally because of what's happening, but can you actually pair me up with the success manager that will meet with us every week to deploy this thing in the right way? So I think like negotiations, vendor negotiations, oftentimes people think about it as just price, but there's also other services that the vendor can provide. To make sure you're getting value outta the product. So I like to think about those things as well, especially for platforms where you feel like they could do well, but you just haven't had time to prioritize it and bring in elements so that you can make it successful, or at least I give it the best shot to make it successful. And oftentimes it's professional services or a success manager or maybe another feature that you didn't get to buy, but they should just put it in for you in year two of the contract.

Alex: 37:27

Yeah, really like, again, going beyond just that, as you said, the price, but thinking about that whole product. The, the larger picture of the transaction and the relationship and, and saying how do we get to success

Peter: 37:40

Exactly. Yeah. Yeah. Cuz that's

Alex: 37:42

than just a discount.

Peter: 37:43

Yeah. Yeah. exactly.

Alex: 37:46

so, you know, we've covered a lot here. I have one more topic I want to just touch on, which is maybe going back to that of, you know, Connie looking at you and being like, please don't ask them for free appetizers. Um, you know, it's, it's, there's an emotional component to asking for these things, right. And I do think that, It, it raises the stakes of the conversation. It's stressful to risk rejection and then have to decide what to do rather than just saying yes, because you want a thing, you want the television, you want the deal, like, you know, it's uncomfortable to make these negotiation conversations. And I think a lot of the phrasing you've talked about lowers the stakes by making it friendlier, or maybe it's more joking or it's more about getting information, but at some point you're making an ask and it's not an ask they want to say yes to because they made the offer at a higher number or something like that. So how do you deal with that? Is that something you get used to? Is it something you're just like, it's worth it to me to pay this price of a little bit of stress and anxiety in this moment because I know that I. Gonna win, uh, this deal? Like what's, help me understand the psychology here.

Peter: 39:01

For me, every single negotiation is a learning experience. And so I actually love the uncomfortable situations, and I don't always succeed, by the way, right? I don't always succeed in getting what I want, but it's interesting to see hu different patterns of human behavior, how certain people negotiate versus others. And at the end of the day, you have to be comfortable asking for what you want because for me, like my psychology is that I'd rather embarrass myself a little bit and get what I want than not get what I want because I have to go home and live with the decision of paying extra for something that I think I could have gotten a better deal on. And the other component too is I think people respect people that are and honest, and that's what negotiation is at the end of the day. So, like you said, the phrasing is really important. So if something falls apart, I still tell the seller, Hey, listen, like, totally fine. Nothing personal. Appreciate you working with us seems like today's not the day that I'm, we're gonna be able to get this deal done.

Alex: 40:03

Hmm.

Peter: 40:04

And again, like I always like to, even with negotiations that I lose, leave the door open because you never know who's gonna come back. And also, you want that person who's trying to sell you something that invested their time and that you strung along. You want them to have a good experience too. So I think for me to, to answer your question, I like uncomfortable situations. I also believe like human interactions, even if there isn't a transaction, there's value in it. And you learn a lot how to just engage with people. And the last thing again is I'd rather get what I want than be embarrassed about something that might be in my head even. Right? Cause oftentimes I think people don't ask the question cuz they think it's embarrassing, but in reality it's not. Right? You're just, you're just trying to get what you want and you're trying to ask it in a way where you're being honest about it.

Alex: 40:51

So, so let me just summarize that and then I have a follow-up question. So you're saying like, first of all, treat it as a learning experience, even if it doesn't work. You've got some, you've, you're getting reps.

Peter: 41:02

Yes, exactly.

Alex: 41:03

Y you know, going to the gym is uncomfortable, squatting 300 pounds is not so easy, but it helps you in the, in the long run. Two, um, you're taking this broader view. You're looking at it of like, I'm gonna go home. I'm gonna live with the consequences of this negotiation. I wanna get my outcome for the long term. I'm gonna forget about this moment in an hour.

Peter: 41:24

Yeah. Yep.

Alex: 41:26

and it's kinda like water off the back of the duck or whatever. And then, uh, the third one is like you've, you've developed some skills for closing the conversation in a constructive way of saying, like, leaving the door open, saying thank you, you know, making it feel like, yes, we just closed this when I didn't get what I wanted. You didn't get what you want, but you know what, like, we'll live another day.

Peter: 41:47

Yeah, yeah, exactly. There's like, you know, every micro interaction is a micro relationship too, and I just like, am super interested in how people engage with each other. And at the end of the day, like there's still value from both sides of not buying something or not selling something, which is just having yet another human interaction that's unique and bespoke. Right. And I, I actually like find that really interesting, just engaging with people.

Alex: 42:14

And, you know, I, the fourth one, I I, people going back, touching on that, you know, people like engaging with people who are straightforward and honest, which is part of what you're being.

Peter: 42:24

Exactly. Yeah.

Alex: 42:25

so I guess my question is, did you start off this way or did you have to, like, it must have taken time to practice putting these perspectives to use, to change the experience of the negotiation? I mean, I'm just imagining, you know, like college graduate Peter out in the world like probably didn't have the same set of mindsets around this and the same approach that you do today. What, how did you practice or build that up over time? Did you take, did you use lower stakes situations to practice? Did you, did you practice on strangers? Like, tell us what you, how do we go to the gym?

Peter: 43:00

It's such a great question. I think for me, yeah, definitely. I didn't start like this. It took a lot of uncomfortable situations and um, I think. Even growing up, I remember my mom would ask questions to get discounts to, and I'd feel really embarrassed, and I think at the end of the day what it was for me is just trying to use every interaction as a practice, honestly, like almost and I, maybe I do it just instinctively. I don't actively think about it, but I just, I just think of it as a to see, okay, like can I get a little bit more, can I extract a little bit more value out of this particular situation? Right? And I know that sounds transactional, but I'm not like actively thinking like before I go into McDonald's, like, can I get an extra like six piece of chicken nuggets? But I'm basically ingraining in my head, like, engage with people like, and figure out what they need out of a given situation

Alex: 43:56

but but how did you start? Like you have that mindset now. How do you get there? How do what, what is the, you know, if you're learning to run, you have, like, you, you walk, you do intervals, right? You start running and then you walk and you start running, and then you walk like, what's, what's that like on ramp for somebody who's like, not, not already there?

Peter: 44:17

that's a really good question. I think you need to actively think about it and force it into like a very specific situation. Right. So I'll, I'll try and map it to our founders. Like if you're a founder trying to learn how to do sales, figure out one sales question that is really uncomfortable for you, and do it 10 times, just like write it down on a piece of paper and say, Hey, for these 10 calls, I'm actually gonna ask what their budget is, even though I hate asking that And then I think through doing that and being uncomfortable and trying to phrase that in a way that doesn't feel authentic to you, you'll figure out a way to make it authentic. But you do kind of have to force it into your lifestyle, basically. You have to force it into your interactions. And I think that's, that's the key, right? Is being like really regimented about it. And I like what you said, like going to the gym, it is like going to the gym. Right, because you're doing like 10, 20, 30 reps of one thing, and then you can move on to the next thing, right? You're not going to master a marathon by running 26 miles every week. It's like you run one mile first and then that's uncomfortable, and you do that for five days and then you keep gradually going up. And it's the same thing with negotiation.

Alex: 45:22

So, so if I could just try to extract out for our listeners, you know, we've given them a bunch of techniques, right? Like, Just ask is one of them. Um, understand the price. Sell yourself as a customer. Understand where you stand as a customer. Understand where your, uh, negotiating partner is coming from. Where are they trying to accomplish? Um, putting yourself into that, the relationship into a bigger picture. There's a lot of these techniques, and you're not saying go out and do all of them at once. What you're saying is pick one of them. Write it down, be like, I'm gonna focus on this thing for the next 10 interactions I have, and I'm gonna bring it to this interaction until I figure out how to make it comfortable, figure out how to close, how to walk away from a deal, for example. All of those things. And then once you've got that mastered, you can start or like, Even not necessarily master, but you feel a little bit comfortable. That's when you start to bring in the next idea then you can start to combine them in the same conversation and then it eventually, it's gonna be natural, but it, it's gonna take time. And it sounds like you could probably even bring in some of these mindset shifts of just reminding yourself before a conversation, even before you ask for something, even before you say, I'm gonna make this ask, I'm gonna go into this conversation. I am making a deal for the long term, not the short term. You know, I'm gonna have to live with the consequences of this outcome. Like practice

Peter: 46:46

Bringing

Alex: 46:46

that in. You could like, that's maybe the like softest way you could do it. And then you can bring in the interactions to, to help you as you feel that discomfort of like, I'm not getting what I want anymore. How do I get what I want? It motivates you to do

Peter: 46:58

this. Yeah. And speaking of prep, actually, like there's definitely multiple situations where I practice out loud in front of a mirror or like in the car right before I'm gonna like do something or before a call I'll just like listen to myself practice these uncomfortable situations. So, so that, that's a, that's a good point. Or you put out there as well. And by the way yeah, there's no mastering of any of these things. I feel like, cuz every situation is, It's just like you have more in your toolkit to be able to like deal with uncomfortable situations and you know, off-road where you need to and react in real time to to difficult negotiations.

Alex: 47:35

Well, Peter, I think this was such a fun episode. I think that for folks, uh, we talk a lot about sales life and business, uh, or business and life. In this case, we've really focused on, on both. And some techniques that people can practice in their normal lives or in business and, and bring across the, across that boundary and hopefully use it to really strengthen relationships and build more long-term relationships. You know, I think one thing that wasn't really said here, but I took away from it. When you have these conversations, it even if you get a better price and the other person doesn't get what they want, you're giving something, you're giving a stronger relationship in the long term. So it might actually work out better for everyone in the end, even if it doesn't feel that way at the beginning.

Peter: 48:16

It's a great point.

Alex: 48:17

So I think we can wrap this one up. Um, before we come to an end, I just wanna give one final shout out to the sponsor of this episode Salesroom.com. Uh, which will, of course, among other things, help you with your negotiating with customers. Um, and please go check them out. They, they're open for business. And if you, uh, liked this episode, don't keep us a secret. Please share us with your friends. Give us a like on your favorite social platform, your favorite podcasting platform. Write us a, a positive five star review if you think we deserve it. Uh, and you're always welcome to reach out to U.S at podcasters@decodingsalespodcast.com.