Podcast Summary: Outside Sales Talk

Episode: Negotiation Ninja Tactics for Successful Deals

Host: Steve Benson
Guest: Mark Raffan (Founder & CEO, Negotiations Ninja)
Date: May 30, 2024

Main Theme and Purpose

In this episode, expert negotiator Mark Raffan shares practical negotiation strategies tailored for outside sales professionals. The conversation covers the myths of the “win-win” mentality, the importance of preparation, the impact of timing, and actionable steps to achieve better deal outcomes—empowering salespeople to think critically and negotiate more effectively.

Key Discussion Points and Insights

1. The Importance of Multiple Negotiation Methodologies

• Avoid Dogmatism: Mark emphasizes not getting stuck in a single negotiation style.
  • “People often think that once they've learned a way of negotiation, that it is the way... That's a bad idea. Don't do that. It's silly.” (01:50)
• Read Broadly: Learn from a variety of negotiation scholars and styles.
  • “Read broadly, read widely, learn lots from lots of different people.” (02:19)
• Different Scenarios, Different Strategies: Mark compares collaborative ‘win-win’ to highly competitive, “get-everything” styles (e.g., hostage negotiations).
  • "Sometimes you have to be collaborative... other times you need to get all of the value out of a negotiation.” (03:49)

2. Common Mistakes in Negotiation

• The Pitfall of “Winging It”: Most people fail because they lack a clear plan.
  • “Most people go into a negotiation and they wing it. And that's the single biggest area where I see most people fail...” (02:52)
• Lack of Preparation: Failing to prepare or know your targets is detrimental.

3. The “Win-Win” Myth

• Debunked Carefully:
  • “Win-win... there isn't such a thing as a win win because there is no possibility of both parties winning... That's called a draw.” (05:27)
  • “Fair is also based on what your perception of what fair is... and that makes fair subjective.” (06:28)
• Collaboration Is Good, But: It's not your job to guarantee a win for the other side.
  • “Be very cautious about trying to create a win for the counterparty.” (06:59)

4. Knowing When to Walk Away

• Identify Your Walk-Away Line:
  • “Biggest problem that I see... is lack of preparation and lack of knowing where to walk away in a deal.” (07:55)
• Organization’s Role: Misaligned compensation plans can push reps toward deals that hurt long-term value and profitability.
  • “We actually put them into situations where they make those deals because we don't instruct them on how to walk away and where to walk away from the deal.” (08:15)
• Aligning Compensation:
  • Mark advocates margin-based compensation, especially for product-led businesses where tighter margins exist. Less common in tech/SaaS due to high margins.
  • “Those are the changes that I generally recommend.” (09:50)

5. Managing Concessions and Avoiding Over-Discounting

• Plan Your Concessions:
  • “Know what you're willing to give away in the negotiation and know how much of that thing that you're willing to give away.” (12:19)
• Always Ask for Something in Return:
  • “If you give it away... and you don't ask for anything in return, then you're just giving it, right? It's a gift at that point. It's not a concession strategy.” (13:08)
• Reciprocity in Negotiation:
  • “If you give it away, you've got to ask.” (13:38)
• Memorable Analogy:
  • Host Steve: “Good negotiators will treat you like a wet rag. They're going to keep ringing until you stop giving water.” (14:01)

6. Benchmarking Success

• Measure Your Deal:
  • “What's the worst acceptable deal for each of those things that you want to get? What's the best expected... That creates a range of acceptable outcomes...” (00:00, 14:53)
  • Know your range before entering negotiations.
  • “If you get in that range, congratulations, you've gotten a good deal.” (15:35)

7. Calculating Your Walk-Away Points

• Subjectivity and Customization:
  • “Very subjective. I think you have to figure that out for yourself....what is the walk away line for each of those things?” (16:57)
  • Assess each negotiation variable independently.

8. The Critical Impact of Timing

• Timing Can Shift Outcomes:
  • “Your willingness to do something today doesn't necessarily dictate your willingness to do something next week.” (18:12)
  • Illustrated with the “used office furniture” story—waiting until the seller is desperate makes a better deal possible.
• Empathize with Counterpart's Headspace:
  • “Are there better times than those times? Obviously. So if that's true, and it is, then you should be thinking about when's the best time...” (19:54)
• Legal Team Example:
  • Negotiate at the end of the day for a quicker resolution.
  • “Maybe 3:30 on a Thursday afternoon is a good time because you can get through all of that information really, really quickly.” (20:21)

9. Understanding the Other Side

• Know Your Counterparty:
  • “Knowing your negotiating partner...and knowing what's going on with them personally...is all really important.” (21:05)
  • Use empathy as part of preparation.

Memorable Quotes & Moments

• On Multiple Methodologies:

  • Mark: “We try and take the best of all worlds...because we don't think that you should be approaching the negotiation 1 [way].” (03:49)

• On Win-Win Mindset:

  • Mark: “It presupposes that you should create a win for the counterparty. It's in their best interest to create a win for themselves. It's not incumbent upon you…” (07:09)

• On Walk-Away Power:

  • Mark: “If you don't get within that range [of acceptable outcomes], you probably should walk away from that deal.” (15:53)

• On Managing Concessions:

  • Mark: “Never give it away without asking for something in return...you are gifting something to someone.” (13:08)

• On Listening:

  • Mark: “Shut your mouth. Be more quiet...you can actually listen to what the person is saying as opposed to thinking of the next question.” (22:45)

“Sales in 60 Seconds” Segment [21:29–23:30]

• Common Mistakes:
  • “Lack of preparation, lack of planning, lack of knowing when to walk away from a deal, and lack of asking for more.” (21:41)
• After a Setback:
  • “Debrief. Debrief. To understand what went wrong, what went well, what to do better next time.” (21:56)
• Most Important Part:
  • “Preparation and asking for more.” (22:10)
• Improving Preparation:
  • “Read, practice, study. Read widely. Practice lots. Study lots.” (22:28)
• Key Negotiator Trait:
  • “Shut your mouth. Be more quiet.” (22:45)
• Greatest Sales Lesson:
  • “Have more patience.” (23:04)
• Actionable Takeaway:
  • “Subscribe to our podcast at Negotiations Ninja podcast.” (23:18)

Practical Takeaways

• Don’t Wing It: Always prepare a written negotiation strategy and plan.
• Know Your Range: Establish the worst and best acceptable outcomes for every variable.
• Avoid “Win-Win” Thinking: Focus on your interests; collaboration is good, but don’t prioritize the other side’s win.
• Manage Concessions: Only give when you receive something in return—never just “gift” value.
• Timing Matters: Pick your negotiation moments wisely, considering the counterpart’s incentives and schedule.
• Know When to Walk Away: Preparation includes knowing your non-negotiable points.
• Debrief Every Deal: Analyze each negotiation for learnings and improvements.
• Listen More, Talk Less: Use silence as a powerful tool.

Where to Learn More

• Podcast: Negotiations Ninja – Mark’s own podcast, covering actionable negotiation strategies.
• Website: Negotiations Ninja

This episode delivers actionable wisdom for salespeople seeking to master negotiation. By avoiding the “win-win” trap, planning concessions, aligning compensation, and understanding both timing and the counterparty’s mindset, listeners are equipped to create and close better deals.