The B2B Revenue Executive Experience
The B2B Revenue Executive Experience

Episode · 3 years ago

David Bauders on Negotiation Training for Sellers in the Cognitive Era

ABOUT THIS EPISODE

Sales training has long been viewed as a necessary evil, lacking a major component to success: negotiation training.

We recently interviewed David Bauders, CEO of Strategic Pricing Associates, a company that leverages analytics and training to master profit opportunity.

Here’s what we learned from Bauders.

You're listening to the BTB revenueexecutive experience, a podcast, dedigated ELPE executives train theirsales and marketing teams to optimize growth, whether you're looking fortechniques and strategies for tools and resources, you come to the right place.Let's accelerate your growth in tree to one: Welcome everyone to the btobrevenue executive experience, I'm your host Chad, Sanderson and today we havea great show for you, we're speaking with David Bouter, CEO StrategicPricing Associates about negotiation, strategic pricing and sales and ableman.It's a great conversation very excited to have David on the show today andjust wanted to say welcome. Thank you chat, it's great to be here and I'mhappy to share what we've learned about strategic pricing, sales, enablementand negotiation, and so we always start with the same kind of of he walkquestion defining moment in your career. We were kind of talking about thisbefore I hit record, but would love for the audience to hear about Kindof thatdefiding realization in your career and how it kind of changed its dectory ofthe company, but I think one of the most importantthings was. I started the compayrn one thousand nine hundred and ninety threeand we started by focusing on pricing analytic and in two thousand andfifteen twenty three twenty two. Twenty three years later, we realized howimportant it was to not only provide sales people with the analytics to helpthem to price better, but also to give them the training that they needed tonegotiate more effectively with their customers Tso for the first twenty twoyears we thought well. Training is important, but we're focused onanalytics and we kind of kept those two apart from each other and then finally,we realize that hey training is not just a necessary evil. It's actuallythe key one of the major keys to success in any type of pricing ormargin improvement initiative, and so you added that out of that toyour business and it's been been successful. It sounds like yeah, so wein two thousand and fifteen, we launched a new business unit, SPA Sigmaand it's focused completely on sales training, sales enablement and weprovide training with focused on negotiation, relationship, building,personality, quotion and Financial Acumen for sales raps. And it's it'sreally been very successful a and is filling a really important need in themarketplace, which is for sales wraps to move up the value pyramid and toreskill for an ear in which more and more work is being done by by machinesan Ai Thenso. Let's, let's talk about the strategic pricing side of it? FirstMan Hes, I think Yeu, said ninety three, a minut. What was the attraction to thestrategic pricing arena? How did how Di we end up there? Well, it all startedback at Oberlin College, where I was studying economics. Instead of workingin the cafeteria to pay for college, I decided to tutor students in microeconomics. It was a better way to make money n than working in the cafeteria,and when I went onto Grad school at the University of Michigan, where I did myMba, I did that again again, just to help pay my way and when I graduatedfrom the UFM, I didn't have any work experience, because I went straightfrom Undergrad through be school. I had no work experience and I wanted to workfor IBM and finance and they said well, you don't have any work, experience andfinance, but we know you know something about pricing, so we're going to putyou in the prizing department and sure enough. I ended up ower at IBM, doing pricing for theirlarge systems, business and then a year and a half later, as pickedoff by company called Booz and company a management consulting firm and theybrought me into do pricing strategy for their clients and then N, one thousandnine hundred and ninety three at the ripepold age of twenty six I startedstrategic pricing associates twenty five years and a thousand clients laterhere we are a thousand clients, wow impressive, very impressive, as were acurent issue. There too, I'm sure I'm professor, didprofessional service for the last...

...fourteen years of well. I guess I'mstill doing it now, but it was more in the B Tob Large scale, services, spacearound digital transformation and I've got a fair few scars of that. I cantimagine. After a thousand clients, I N Yea, we felt a good team to do that.But it's you know it takes. You know, there's a real learning curve, an andover twenty five years. You learn a lot. You make mistakes, you get better andwe always say we're only as good as our best clients and so fundamentally,we've learned from serving very difficult large clients around theworld, and it's that experience of growth and learning and challenges anddemands of the biggest most complex companies in the world. That reallydefine you. It's almost like being an athlete. You really only is as strongas the best competition you faced and- and you know we don't think of ourclients as competitors, of course, but it's a very strong analogy that youreally grow through through the experiences that you have in the realworld. Excellent says: Wewere preping for the interview you mentioned,tequote negotiation, training for sellers in the cognitive area, and yes,I did actually do the air quote. That's a pretty loaded phrase right andespecially as we as everybody starts talking about Ai and and the way buyersbuy and the way they think can we before we. I want Onpackit, but I wantto start with the negotiation side of that. So what, in your experience, isthe thing today, sellers struggle the most with when it comes to negotiation? Well, it's kind of sad because neverhave we had such incredible product and solution offerings out there in the inthe marketplace, particularly in BTB and companies. Hofe invested millions,billions of dollars creating value for their customer sales. Reps are flyingaround the world they're having long drawn out sale cycles withcustomers, theyre, creating immense value, identifying their needs, bringthe right solutions to them, and then they get to the last mile callednegotiation, which is what are the terms of trade that we're actuallygoing to get paid for this, and they have zero training on this, that we dida survey with selling power and it showed that in the last twelve months,ninety six percent of sales, repps Hav, had zero days of professionalnegotiation training and if you think about the consequences from acommission perspective from profitability perspective from the youknow, the future growth prospects of these companies. What happens when theycreate all this value and they're completely and totally unprepared forout a negotiating? A lot of people think it's like riding a bicycle right.You just put somebody into a negotiation and they'll be able to wingit, and it's just not true, and so sadly, getting paid for the value theybring to the customer is the hardest part for sales, reps they're, sofocused on on giving to the customer and meeting the needs of the customer.They forget about the needs of their own families and their shareholders,and you know the other thing I would say just in very simple terms, thatsales raps are so focused on their own pressures to close deals to quota topay their bills, that they ignore the pressures on the other party to buy andthat what I mean by that is just as sellers have pressures to sell buyershave pressures to buy and once sowars grasp this concept, they can start totrain to become skilled negotiators without that perspective, they'realways going to struggle, and for that reason we call this the golden rule. Ifthere are pressures on me to sell what are the pressures on the other party tobuy and once people get that lens to see their negotiation through, theyhave a starting point to train to become great negotiators, and so when,when you're, training, negotiators or Wyou, think of like the bestnegotiators that you've known what are the top three characteristics that youlook for or train to. You know, in your opinion, to make somebody a greatnegotiator. Well, first of all, great negotiators are created not born, and alot of people think well. If I find somebody WHO's, tough who's got theright personality, who's got the right, you know disposition, then I'm going tohave a great negotiator, and while...

...there are personality dimensions tonegotiation, frankly, that's one of the biggest misconceptions real greatnegotiators are created, tnatborn, and so the things that really lead to togreat negotiate ors having a great negotiator are a few things. One istraining, great negotiators have to be created, they have to be trained andjust like any other sport. Negotiation requires skills, training, practice,strength and conditioning program and, of course, in game experience. So oncepeople understand the metaphor of it being a sport, then you understand theimportance of regular practice and training. The second is preparation. Soa lot of people just show up for negotiation. They haven't done theirbackground. Discovery Work. They fundamentally are unprepared for whathappens so a great negotiator doesn't just wing it. They spend the timeupfront to define the negotiation process. They discover criticalinformation about the other party. They develop their value proposition andidentify and quantify the issues under negotiation, and they also need todefine what a win win result looks like for each party N. without thatpreparation, you don't have a great negotiator and then the last would betools. So grace negotiators have analytical tools to help guide theirdecision, making they don't just guess at things they don't just. You now pullsomething out of thin air as to what our targets are in this negotiation.They've done the analysis to know what the other appropriate term should be.They know what the pricing should be. They quantify the profitability of thedeal and to the other party, and they know what to ask for when they give aconcession. That's that would be. The other part is really having aconcession making strategy. So if I give up price, if I give up terms, whatcan I ask for back from the other party and they all all three of these thingstit together and a great negotiator, is one who's trained who's prepared andhas the tools to succeed, and I think that also probably I mean extends outto kind of some of the things we work with sales reps on right. You need tobe, you need to be trained most of them are't, but they need to be trained.They need to be prepared. They need to do the practice like the practice. Oneis the one that I see most people struggle with, especially sale temsbecause they move so fast. So, oh no, I don't need to practice this yeah. Youdo in order to be effective. It's not something! It's not wriding a bike.It's not! It's! Not that simple sales, an and negosiation there bothdisciplines. They take time and focus, and just like you know, if, if you'retalking about a great athlete letlet's say like Lebron James, I guarantee youthe Lebron James has metrics behind when he, when he trains, he knows howmany times he was able to do something. What his endurance was. He knows whenhe makes mistakes and, and so metrics are becoming really important, even insimulation. A negotiated simulation needs to have a scoring andfundamentally, what's happened for years as even when people did roleplaying, they still had no metrics about how they were improving, whetherthey were successful. who was doing well at things so the world. Actually,the world of sports science is actually coming more and more to bear on theworld of sales training, and it does some very interesting parallel, and sois that part of when we talk about the cognintive Arya, how that's pushing usinto that ar sort of I mean what we mean by the cognitive era. Is this newera where computers and machines are changing the tasks and rolls of sales?So we all know, for instance, that Amazon does over a hundred billiondollars per year and sales without any sales RAPP, and I mean it's just astaggering figure right and we also marvel about how this little assistant,Alexa, Amazons version of sere conseemingly, meet every whim that wehave without any human involvement and whyle. We all appreciate that asconsumers, you know in terms of the incredible savings of time and drudgery.What we don't realize is that, behind that convenience is a new technology,it's a new technological world where Alexa and she really just symbolizesartificial intelligence- is going to...

...radically change the work force and,specifically the sales profession. You know it's going to change the roles andthe skills that are required for success and we've seen studies thatshow that over the next five years, technology, AI artificial intelligencewill displace almost forty percent of the activities. Currently we perform bysales rips things like basic product information specifying which productshould go into an application. What the value ad or the value proposition ofthe product is all of these things that people have done historically are goingto be resolved very quickly without any human involvement by artificialintelligence. So what that means is a couple things. One is a lot fewer salesrepd and for those who remain there's going to be a real pressing need toupgrade their skills and move up the value pyramid. If the machines a doingall the low value work, you want to still be in sales you're, going to haveto move up the value pyramid and you're goingt have to train to do that. You'renot going to be able to just walk into it and say I'm going to be a valueadded sales for up without the training or he the skills or tools. To do that,I was interviewing levone croner from revenue, starm, CRO revenue storma. Hecharacterize that as the difference between demand capture, which is thelower, I would say I don't. I don't meet it in negative way, but it's oneof the transactional side of the sales o versus geinand creation and thatdifference between the two. It's a huge. It's a huge jump for a lot of people insales. It's not it's not going to be as simple and those that I don't. I thinkthat aren't paying attention to it or caught off guard yeah and it's you knowit's one of those areas where what you get is what you invest and frankly, wein the sales profession for a long time have not thought you know rigorouslyabout. Well what should we be training people? On the amazing thing we did aagain this survey with selling powers. It showed that over ninety percent ofthe sales training that people are consuming today has no retentionprogram to it. So people get a one and done training program, and yet theforgetting curve shows that, within thirty days, without retention, ninetypercent of what people learn will be forgotten. So, if you just think aboutcumulatively, let's say: There's there's I think in the selling powerfive hundred there's top TI type. Five hundred sales forces there's twentyfour and a half million people. We invest a thousand dollars each andtraining per year, there's twenty four and a half billion dollars beinginvested in training in the US in the top five hundred sales forces. Ninetypercent of that is being forgotten within thirty days. I mean it's juststaggering when you realize not only are we not training in the right things,but we have no retention program and so fundamentally we're just wastingpeople's time and we're squandering gast amounts of resources, and so with with the advent of anothertopic right so millennials, and then the way that they're used tointeracting with technology. We were talking about how technology's,impacting you know the sales profession itself. How will it how will technologyor how do you evision technology or how has it the impacted negotiation? Well, it's going to affect in twodifferent ways, specifically on both the quantitative side, as well as thebehavioralside we're seeing major advancements on the technical side. Wesee new decision making tools that will recommend optimized prices, whichproducts are solutions. A particular customer should buy based on theircharacteristics based on their purchasing history, other tools that help really guide sales rebs to identify the deal termsto get in their negotiations. What should they be aiming for? How we setaspirational terms of trade with our customers on the behavioral side?What's happening is AI and training are giving us new insights into howpersonality his driving decisionmaking that has hadd people of differentpersonalities, gather information, how they process information, how they makedecisions, and so this this whole world of AI, is enabling us to gain newinsights into our customers, how they behave, how they make decisions, reallyhelp us to negotiate and sell...

...differently, and then the other piecethat I would would mention as well is that learningtechnology has advanced extremely quickly. So now we're seeing a lot moremicrolearning objects daily, drip learning. We call it that, rather thanhaving you know, death by power points of these, these talking head videos we're seeingmore people want to learn a few minutes each day. They want to be taught sme,some Keytip, that's actionable each and every day, and they want to beaccumulative so that it's building up and they're, not forgetting things andso what's happening with with learning now to support better negotiationskills is that we now have platforms will enable you to practice this on adaily basis. Again going back to that sports analogy. Without practice, allof the best skills will atrophy, and it's really that that technology is driving both theanalytical side, as well as the training site and in the last piece Iwould I would mention which is really cutting edge, is the impact of socialon learning and what we re. What we're discovering now is that when peoplelearn in a social environment where they're interacting with each other digitally as they learn, the learningretension is much greater when your your team of sales reps, are seeingeach other's answers and commenting on them and liking them or otherwise, engaging with each other asthey learn. The retention rates go through the roofand the participation rates are really strong as well and and so socialeverybody thought social as a distraction. It turns out that socialcan be harnessed to be a learning laver. If you have the right platform. Is that something that you guysprovideors or platform out there, that you've been the most impressed withyeah? We have a partner that we work with that's providing a learningmanagement platform that can be ther distributed or a no a mass learningmanagement system, type of platform and there's different ways of pushingcontent. But the most important thing is to really leverage to there's twokeys to it. One is that you need a platform that supports socialinteraction, that is, that anticipates and creates the the ability for salesreps to learn together and then the other key to it is that you have tohave great content to begin with, so contentis king, just like content is king on Netflix or a TV content is also king.Yeah content is king way back in the in the training world and for too long wethought well, if we just put the sales rap in front of a screen- and you knowask him to watch this. This talking head looking at him and he's gettingbored to death watching in he's about to pull his hair out, that we were going to train them. Thatway and what we're learning is Kno, the same things that get people to watch toBinge Watch on Netflix or Oramazon those same characteristic better, be inour training content. So the question we always ask companies when we go inand talk to him as what percent of your training content is Bingeworthy, thatis what percent of it will people naturally watch at a rake faster thanwhat you ask of them, and the answer always comes back zero. We keep givingpeople content, it's boring, dull. You know just people want to pull theirhair out. We wonder why they're not learning it's because we're not meetingthe standard and then a social era that we live and we live in a cognitive vereand we live in a social year and the expectations of our trainingdepartments. Just having kept up with this new era, and so people are gettingdistracted away from learning into the average sales rep spense four to eighthours per week, surfing onm social during work- and you know it's likeLwhy- are they doing thats because partly it's because it's fun, but it'spartly because they're not being given the alternatives that would naturallyattract them into career building, use of that time? Okay, and so, when wethink about negotiation, as as you know, key component and focusfor what we're talking about today, I mean you've been doing this for a whileright, I established expert. I would love to know what is your favorite partof negotiation? Well, a lot of...

...negotiation starts out, as kind of youknow, particularly for an inexperiencednegotiator. It starts out as kind of my gain is your loss and vice versa. Soit's kind of a zero some view of negotiation. What I find rewarding is Igo through negotiations and we negotiate a lot with. Clients is reallycreating bigger deals that produce greater value than either partyexpected at the outset, and so there's a very basic principle of negotiation,which is when you find yourself in a a win, lose zero, some type ofenvironment. You need to redefine the negotiation to be bigger, that is, togrow the deal in a way that will make it no longer a win loose that will makeit a win win, but when you see it through that lens of of win loose, youend up with all this conflict, and you end up with all this stress but n whenyou really are clicking- and you really understand the art of negotiation,you're constantly growing deal and you're getting bigger deals and longerdeals with bigger growth rates, and so the Sales Reps Wo, who master thesebasic principles have better terms of trade, they're more profitable thatthey retire earlier. They have better neighbors a whole bunch of things fallfrom it follow from it. So for me, it's it's the gratification that comes fromgetting away from the head to head conflict. You banging heads with theother party growing the deal and then, as you master, that is as the way youdo business. It's the the professional success that comes with it excellent.So, let's Pikit a little bit and talk about strategic pricing associates if acustomer were to come to you, how do they? Typically? How do they typicallycome to you? What are they asking for what awhat problems or challenges? Arethey coming due to help SALV? Well, they start with one or one of twopaths, so they uther start with the training side, which is they want tounderstand? How do I train my people to get bigger deals? More successful dealsto get better terms of trade. How do I get them to be more professional and toreally be more profitable, so they sometimes start on the training sideand they say hey. I just want to train people and get them to negotiate better,so they stop giving away the value that we create for the customer. Sometimesthey start and they, on the other hand, they start on the more analytical side.They say hey. You know our business is really complex. We got thousands ofcustomers, thousands of products or solutions that we sell and, franklywe're just guessing all the time at what the right priceises can you helpus fougure out, find the tools to guide our salespeople on a daily basis tomake better decisions? It's usually one of those two paths, of course, overtime, there's a convergence between these two. When you really empower yoursales, raps is when you give them both the tools and the training to drivebetter, better, an more profitable deals, and could you give us an exampleof client success that you can publicly talk about that you're, the most proudof yeah? Well, we don't disclose forconfidentiality reasons, and particularly in the pricing space, wecan't disclose the identities of our clients, but we have a largemultinational client with over one million products that they sell over ahundred and Fiftyhsen customers operating in thirty five countriesaround the world with thousands of sails raps. In addition to thousands ofchannel partners and what we've done is over the last fifteen years, weprovided them with both the analytics and the training to enable their salespeople to be more effective and working all around the world over that entireperiod, we've added over four hundred million dollars per year of operatingprofit, and I think equally gratifying for folks who, like myself, have dealtwith thousands of clients, it's really about how have you helped the people onthe way, and in this case, there's literally been thousands of salespeople whos, whose professionalism has been elevated, whose earnings have beenelevated and he've had a more successful career, and for me, that's you know, tha, the money is there whenyou work on these things. When you work on negotiation training, you work onskills, training for reps and they give them the right tools, but at what'sequally gratifying is how it affects...

...people. The people element is a for meand for some of those I think that I know that are the best at what they dothat people element is what keeps US coming back. It's what makes the scarsthat we have worth it exactly yeah you can't. I mean youcan't really separate people from profit. I mean it's as you as you workon the projects. You have to work on them to make sense financially, but atthe end of the day, nothing works financially. If it doesn't work forpeople, and so you know it's tempting to put them intwo different silos, butyou really have to find approaches to solving problems that integrate the toand, and it turns out that performance and human performance is the biggestdifferentiator. It's not. It is a Cliche, but it's also true that peopleare a company's greatest asset and when you empower those people but givingthem tools and training, you transform the value of the corporation as youtransform the value of the individuals and both are winning. In that scenario,when you, when you're losing that whole thing is, when you view your profits,can only go up if you take training away and when you start seeing theworld that way, then then you're in a world were neither party is winningwithout a doubt. Without a doubt, so with the end of towards the NVINTERVIEW,we ask us two standard questions and, as the CEO strotegic pricing associates,that makes you a the politically correct term is prospect for salesprofession, ihave, a tendency to use other words,but in that role, and you and you know, live and breathe this stuff on a dailybasis. If somebody you Hav' know was trying to get your attention establishcredibility with you, what would be the best way for them to do that? Yeah I mean, I think it comes down to afew things. One is: How are you going to help me to improvethe profitability of my company o? Are you going to help me to improve thecapabilities of my company and ways that will serve customers and then leadto profitability? How you save me time time is the most precious resource andfrankly time is as what we all run out of eventually and fundamentally time isvaluable. So if you've got something that can help mo save time or drudgeryor help me or my people to to move up the value chain, then that that grabs.My attention, of course, that's that's the starting point. Beyond that. Welook for differentiation. How are you solving the problem differently fromother people, because differentiation usually leads to a better answer andthen the last piece that I look for, because I've been around the block alot of times a really you know. Do you have a forwardlooking perspective right? It's not enough to solve the problem. Now youneed to be able to help solve the problems that I don't know about yetidentify those problems and show how how you're going to help in the futureand then the last thing is, of course, simplicity. People over complicatethings, usually don't succeed, that's going to be the quote: That'sgoing to be the quote for the podcast to see that no over complicated yeah last question. We called ouracceleration insight. If there's one thing, you could tell salesprofessionals, marketing professionals, one piece of advice that you believewould help them be better tomorrow. After hearing it,what would it be and why? I think that you know it's a greatquestion. First of all, first of all, it's determine what tools you need todo your job more profitably on a daily basis. either. Do it more successfully,they have more value to do it more efficiently, figure out what thosetools are that are going to drive you to more profitable book of business or more profitable daily decision makingfind those tools and use them, and then the second is- and this is the harderone frankly is determine what skills you need to do, your job moreprofitably and here's the hard part once you've identified what skills youneed to do, your job more profitably, practice them daily and- and so thatbrings up the question. What are you prepared to do differently each day?How much time are you prepared to...

...allocate to get better at things formost people? The answer, unfortunately, it turns out to be not a lot, but Ithink if people invest a small amount of time each day and building theirskills figurin out what tools they need to be more effective. That's what'sgoing to drive success, so that's how it responded that one excellent David,if Elister, is interested in getting more information about what you guysare doing or wanted to touch base. What's the best way to connect with yousure and we're always happy to learn from other people and to talk to morepeople, it's a pleasure to do that and we considerit a critical part of development. First of all, you can visit our websitestrategic pricingcom, no spaces or training business basigmacom, SPA S, Igmacom. Those two are good places to learn more about what we do and then,if you want to contact me personally, you can reach me two hundred and sixfive, three six. Twenty eight hundred in the US or my email address DavidDhat bouters, Ba: U Ders at Strategic Pricing, one WORDCOM and alwaysinterest in talking to other folks about these challenges andopportunities. Thank you. Devin, I can't thank you enough for being on theshow. It's been an absolute pleasure to speak to you today great well, thank you for having mechat and all my best wishes to you and your listeners all right, everyone thatdoes it for this episode. Please check us out at btob. Revezeccom share theepisode out to your friends, families coworkers, and if you like what you'reHerin, please riteers ser view on itunes. It helps us determine theguests to bring on to continually provide you value until next time. Wevalue prime solutions, wish you all nothing, but the greatest success you've been listening to the BTBrevenue executive experience to ensure that you never miss an episodesubscribe to the show and Itunes for your favorite podcast player. Thank youso much for listening until next time.

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