Transcript

Avoiding Antagonistic Relationship with Procurement

[0:00] The easiest way to avoid any kind of antagonistic relationship with procurement at the end of a relationship is to bring them in early.

[0:09] Music.

[0:15] This is the Full Funnel Freedom Podcast, supporting sales leaders and managers to improve their sales funnels from people to prospects.
I'm Hamish Knox. In this show, you'll learn how you can improve your results, lead a great team, and hit more targets with Full Funnel Freedom.
Welcome to the Full Funnel Freedom podcast. I'm your host, Hamish Knox.
Today we'll be getting ideas and insights from Mark Raffin of Negotiations Ninja.
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Introduction to Mark Raffin and his background in negotiation

[1:09] So I don't want our audience to get nervous today, but my guest, Mark Raffin from Negotiators Ninja has a background in procurement. Please keep listening. Please keep listening. It's going to be okay. I promise. I promise. Mark is a serial entrepreneur and lover of marketing and thought leadership. He is an expert in negotiation, influence and persuasion. He has coached executives and teams in some of the largest companies in the world like Zendesk, Nike, Citibank, the Sasha Group, Salesforce, the US Army, LinkedIn and Humana. Mark has been featured in Entrepreneur, Forbes, Thrive Global, Supply and Demand, Chain Executive Magazine as a 2019 pro to know and has appeared on dozens of podcasts including Make It Happen Mondays, the brutal truth about sales and the insider's guide to finance. Mark, welcome to Full Funnel Freedom. Thank you so much for having me on Hamish. I'm glad to be with you today.
I'm super excited to have you here because you have an amazing business teaching negotiation and other really cool and necessary skills to leaders and to sellers. But also you have a background in procurement, which to be quite frank is the boogeyman for a lot of sellers and sales leaders.
But before we get to that, I've given the audience 30,000 foot about who Mark is.
Take us down a level, tell us about Mark's journey and how you got to where you are today.

Mark's journey from sales to procurement and starting his own training company

[2:36] I actually started out my career in sales right out of university, in ad sales. I did that for a while. I ended up doing pretty well. I ended up paying all my student loans, but then I moved cities. When I moved cities, I realized that I needed a new job. Jobs were pretty slim at the time, so I applied for a few. I ended up getting a job in procurement and fell in love with it because there's a huge negotiation component to it. I built my career through procurement.
I ended up leading a few categories and then decided about five to six years ago that I didn't want to do the corporate thing anymore.
I wanted to start my own shop and training and all that kind of stuff had always interested in me. And so I didn't really know how to do that.
I started a blog in the process because I was frustrated at some of the content that was getting released.
That blog turned into a podcast, that podcast turned into a training company, and now the Negotiations Ninja training company delivers negotiation training, conflict resolution training and persuasion training to some of the largest organizations on the planet.

[3:41] Amazing. What a very cool journey and very curious to dive more into your experience in procurement. When we visited offline, we had a good chat about procurement and I always believe that everyone's got a role to play. In an organization, everyone's got a job to to do and everyone has different incentives and whether those are monetary or not, everyone has different metrics that they're held accountable to.
So if we look at this from a sales leadership perspective and we're coaching our people to go out and sell, what are the first couple of things that you recommend in terms of interacting with and working with procurement organization?

Interacting and working with procurement organizations

[4:25] From a sales perspective, I think the first thing that you should know about procurement is that their customer is exactly the same as yours, right? So you want to sell something to someone who's going to use a product or a service or a piece of software.
Their customer is the person who is using that product, service, or piece of software, and they represent that customer internally within that organization.

[4:48] And so naturally, you're actually working towards the same goal as the procurement person.
You're both trying to find value for that end user of that product, service, software, whatever it might be.
You're just approaching the value conversation differently and you talk about value differently than that procurement person does.
So that's the first thing that I want salespeople to know about procurement people.
The second thing that I want procurement or salespeople to know about procurement people is that you need to be engaging them early in the conversation.
I know that seems like a very frightening thing for a lot of salespeople but it is critical to the conversation because here's what happens internally within companies that don't engage procurement early.
So let's just say, for example, you're a salesperson, you're selling whatever it is you're selling to the end user, you think you've come to some sort of a deal, then what happens is that end user lobs it over the wall to the procurement person and says.

[5:48] Hey, we got a deal, figure out the contract, right? Figure out the deal, put a contract together, make sure we can pay these people. See, now the procurement person has zero context for what's happened.
They don't know the value that's been created.
They don't know any of the concessions that have been made.
They don't know what you've already brought to the table.
So they for sure are still going to engage in significant negotiations with you.

[6:21] Because they just don't know what you've done.
And how could you blame them? Really? That's their job.
Their job is to provide value to the organization.
And they do that through the negotiations that they have with whomever is selling into that organization.
The easiest way to avoid any kind of antagonistic relationship with procurement at the end of a relationship is to bring them in early into the relationship.
So when you think you've got something.

[6:50] And the person that you're negotiating with as an end user says hey i think we'd like to move forward with discussing tailoring something to our organization then you would say hey look.
I want to do that with you.
And I've noticed with other organizations that when we start this process, there's a few other parties that generally should be involved so that we can take them along for the ride with us and so that they can see the value that we're generating for your organization.
If you're in SaaS and you're selling SaaS products, generally speaking, that's someone from the data group and that's someone from procurement and maybe someone from risk.
If you're selling services, it's generally someone from legal and someone from procurement.
If you're selling products, it's someone who's going to be thinking about the environmental concern of those products and it's someone from procurement. It's always someone from procurement.

[7:46] Because we need them to be involved in the process. Otherwise, it's going to go poorly for us on the back end of that relationship. What I always recommend to folks is as you're going through the tailoring process, before you start that, just make sure you ask your end user to engage with procurement and tell them why so that you don't stall the deal on the back end, you don't slow down the deal on the back end.
There's no unnecessary things that you have to go through as so it's all done according to plan.
And by the way, if you do that, you will be seen as a hero through that party's eyes, whether it's data or legal or risk or procurement or whomever you have to bring in as the multi-party into the conversation, they now see you as a partner, not as a potential competitor in a negotiation.
And that makes all the difference in the world.

Engaging procurement early in the sales process

[8:41] That really reminds me of when I sold software as service. And that was often a key thing when my buyer was getting excited. Oh, we can do this. Oh, we can do this. Oh, we can do this.
And like, hey, I'm excited too. My experience tells me. And I'd like to say that not everybody rolled their eyes, but there were a few. Because everybody, when it's like when the kid is told, hey, that's great. You want the toy, but you have to wait until your birthday.

[9:05] But it did end up becoming a much more holistic relationship and it was a lot less painful, like you said, on the backend and also on renewal because my leader held me accountable to renewing my clients that I signed up. When I had a positive rapport built with all of these groups, like you said, risk, legal data, procurement, I found that that renewal process went a lot smoother as well.
Much easier. Yeah. I mean, I think that's the unfortunate issue that I see with a lot, especially salespeople that are new to their roles, is they're thinking about the immediate sale. They're not thinking about the long term sale, the long term relationship and the renewal that comes with that. And so they say, well, I got a deal. Hey man, two years from now, one year from now, three years from now, that sales gone, right? As soon as they can walk, they're going to walk. So we want to make sure that the relationship that's being built is fairly holistic right from the beginning. Yeah, fair to say. I know that working with some sellers and sales leaders like procurement, they're still human beings, right? Let's treat them as human beings. Some of them. Some of them.

Treating procurement as human beings and bringing them to the table early

[10:18] Your words, not mine. I can say that because I'm from there.

[10:24] Yeah, that's as George Carlin says, you're allowed to hit your own game. So Mark, So we get this, let's bring everybody to the table as early as possible. That absolutely resonates with me. So one of the other challenges that I know sales leaders bring to me with frustration is the RFP, right? The RFI, the RFQ, the whatever. And maybe they get their salesperson to call up and say, hey, help me understand. And the response is, well, we have an MSA or you're on our approved list or whatever, which is basically so you exist. So what have you learned from your experience in terms of the whys behind those requests for fill-in-blank.

[11:03] And how can sales leaders best take the anxiety out of their sellers when something hits their desk that they didn't know about until it actually got into their inbox?
Okay, so we'll go through a few definitions, and then we'll go through...
Why some of those things are pointless and please don't do them.

[11:21] So RFX, request for insert word, is what we're talking about.
It could be request for information, request for quote, request for proposal, request for tender, whatever it might be that you're going through.
A request for information is someone just seeking information.
They're trying to create a shortlist, most likely of the thing that they are eventually going to go to market for, for something that they don't yet understand. Most likely, your clients and my clients for sure have seen a significant decrease in our RFIs over the last 10 years because the RFI is essentially useless because we have so much data available to us on the internet. There's a bunch of review sites. There's a bunch of websites. You've got Gartner and Forrester and all these amazing organizations that you can go to for data and support and research, et cetera.
So the likelihood of RFIs being a thing in the future is very, very low.
If you are asked to participate in an RFI, my general recommendation is, unless you've been helping that company prepare the RFI, do not respond to the RFI.

[12:38] It's most likely a waste of your time, unless, of course, you've got the extra time available and the resources, and there's an analyst on hand that could quickly whip up some information and it's copy-paste, generally speaking.

The purpose and strategy behind RFQs

[12:53] For the RFQ, it's a, generally speaking, it's generally a three bids and a buy strategy, right?
So they're going to market, they're figuring out for a commodity item, a part, a material, whatever it might be, we're trying to figure out what the most competitive price is.
Our specs are generally pretty good.
We know what it is we want to buy. We just need a quote on this.
We need the most competitive price, most competitive value for whatever it is we're buying.
That's the quote side. Yes, absolutely. put in your quote for that.

[13:24] RFP is another thing entirely request for proposal we kind it from the procurement perspective and the user perspective is the way they think about it is like we know we have a problem.
We know we need to fix the problem we kinda know what we need to do to fix the problem.
Here's a picture of what we think we know to fix the problem tell us how to fix the problem and tell us how much it's gonna cost.
And then you submit a proposal based on those things to be able to do that now most are a piece of being released through software like a rebate or Cooper or Jagger or whatever it might be and then your job is to basically insert answers to any of the form based questions that they have.
The downside to the RFP process is that it tells you, tells the procurement person that you can do something and the end user that you can do something, but it doesn't tell them what you do to do that thing and how you do that thing, which are often more important than the thing itself.
Because, for example, if you say, well, I deliver welding services, and this person delivers welding services, and this person delivers welding services, how I deliver those welding services may be my competitive advantage.

[14:48] But they generally don't get asked that in the RFP process, which means that your job is to ensure that you can get onto the shortlist of that and sell that.
People think that the RFP process is void of selling.

[15:06] It is not void of selling. In fact, it requires selling so that you can get to that, upper tier shortlist stage so you can actually have a conversation with whomever is buying the goods or services that you have. And that's really, really, really important.
David Coluby I would say to you, though, if you get a lot of RFPs, for example, let's just say you're in the oil and gas services businesses, you're in the commodity business, you are in the industrial sales business, a lot of your business is probably generated through the RFP process. There is a specific way, that you should be answering those RFPs and there's a specific way that you should be structuring your proposals. That specific way is according to the instructions that the procurement person has set out in the RFP.

[16:06] Let me give you some advice, salespeople. Do not deviate from the instructions.
Because what the procurement person is trying to do is they're trying to make an apples to apples comparison and benchmark you against your peers in the industry.
If they cannot benchmark you against your peers in the industry, your proposal goes in the garbage.

[16:37] So in order for you to be benchmarked against your peers appropriately, you must follow the instructions. Now, you might say to be marked, but we have a better way to be able to show them how to drive more value.
Wonderful. Submit two proposals.
Submit a proposal based on what they have asked for, and then also submit a proposal based on how you think they should think about the proposal. and refer to each of those proposals in each of the proposals.
For example, you will have introductory text that says, here's the answer to your questions.
We think that while this is a fine approach, the best approach should be viewed in our secondary proposal.
Please take a look at that.
Now you've got my attention.
As a procurement person, you're providing additional value. Now I'm willing to have a conversation with you.

[17:31] That's fascinating because oftentimes we think we have to either do the thing you recommend not doing, which is, hey, let's stand out and be our own special unicorn, which as we've just heard, gets you into the round file very quickly. Very quickly.
Or essentially go into that undifferentiated, like we're following along with exactly the answers.
And as you shared, like the how we do it might be the actual differentiator, but there's no way to do that. So let's dive into this more because one of my colleagues.

[18:02] Actually says that an RFP is a request for a sales call. Like someone has said, I want to talk to a salesperson. So when you shared that, like there is selling involved, a lot of times sales leaders hear from their salespeople, well, I called them and they said that all the things are in the RFP and yeah, just answer it. How does this selling get involved and and how can we coach our salespeople to actually have a meaningful conversation with a procurement person once we get this RFP, whether we were involved in creating it in some form or fashion, or whether it just literally hit our desk out of the blue and we didn't know it was coming until it landed on our inbox.
How do we go about engaging as procurement person properly without killing rapport and potentially putting ourselves in an offside position.
Come with questions. Most of the salespeople that start that conversation say, hey, I just want to learn a couple more things about the RFP that you've released. When did you need that by? And you're like, why the fuck am I having a conversation with you right now?
It says on the front page, the RFP is ending at this date and proposals are due by this date. Right. And so naturally, when procurement people get stupid questions like that.

[19:28] That's an immediate turnoff and an immediate shutdown. So the questions that you have to come prepared to ask have to be intelligent questions, and they have to have a reason, like I need to know this because in order for us to submit a whole and complete proposal to answer this specific question, which we know for sure your end users are going to want to know because if they don't know this, it exposes them to an incredible amount of risk. We need to know this thing.
Could you help me to understand what this thing is that you're looking for and whether we can deviate from what it is you're asking for.
Because if we don't deviate you're only gonna get part of the picture and if you get part of the picture now what we're doing collectively you and i we are exposing the end user to risk unnecessarily.
And when we expose the end user to risk, if you select someone based on just that.

[20:34] You are going to find yourself in a very difficult situation in 3, 6, 9, 12 months, whatever it might be. We don't want that to happen. You definitely don't want that to happen.
So we need to have a more holistic discussion about this. And I've got other questions that I need to go through as well. Can we set up a time for us to be able to do that?
Now, the classic objection that you're going to get from a procurement person here is, put it in an email, send it to me, I'll send it to the business user, they'll answer the email, and then we'll go back and forth on those things. Now, you are going to say, absolutely, I can 100% do that. Here's what I would recommend, though. Let's have a conversation in a meeting room. By the way, I'm fine if you invite all of the other proponents to this conversation, and let's have a holistic and robust discussion about these issues so that we can at least.

[21:30] Address these concerns because how someone writes an answer may not necessarily be how they feel about that specific situation. Then you can tell them, of course, that the vast majority of of communication is lost in text, right?
Because we don't have any context in the text itself. We need context.
So we need to be able to actually have a voice conversation about this.
Now they're gonna say, I'm not really sure.
We don't generally do that. And you say, I get it.
You don't generally do it.
I understand that this is completely outside of what you would usually do.

Collaboration: Involving all stakeholders in the conversation

[22:09] But we want to make sure that we do the right thing for your business user.
So if it makes you feel more comfortable, I'm not gonna go around your back to chat to your business user. Why don't the three of us have a chat about it?
That way you can be involved in the conversation and I can be involved in the conversation and the business user can be involved in the conversation. I won't ask them commercial things.
I'll just ask them the technical things.
I'll speak all my commercial stuff to you and I'll speak all of my technical stuff to them.
Is that fair? Yes it is, of course, let's have a conversation.

[22:46] That's fantastic. And it really illustrates what you said at the beginning about sales and procurement are often working towards, or they are working towards the same outcome. And every person who's involved in a sale has a different reason for buying. So data has a different reason, legal has a different reason, procurement has a different reason, and user has a different reason.
And what I just heard in that is a method of having a conversation that makes it all about the procurement person and their incentives and their reasons versus, come on, man, can't you just get me in the room so I can potentially make a sale? Is that true? Yeah. I mean, that's exactly what we're saying. A procurement person wants to do the right thing for the business. They desperately want to do the right thing for the business because that's how they get recognized.
Salespeople, we get commission. Wonderful. But the procurement person gets recognition.
And so we need to know that we're doing the right thing for the business as a procurement person.

Understanding Procurement's Incentives and Reasons

[23:46] Help them to know that they're doing the right thing for the business by following your instructions.

[23:54] Absolutely. Early we talked about, so we've talked about RFI, RFQ, RFP. I also heard RFT, request for tender. Are there any material differences to that from request for proposal?
Typically, tenders are like a tender process is generally only done in the government or quasi governmental fields.
They are more strict, generally speaking, than request for proposals.
And if it's released by the government, then there's public procurement law that gets attached to that, that you probably want to know about before you submit your proposal.
The cool thing about doing any work for the government though, is they tell you exactly how they're going to evaluate your proposal, which a lot of private organizations won't.
So whenever you're going into work with the government, understand what the evaluation criteria are because they're trying to make it as transparent and fair as humanly possible in the government. That doesn't necessarily mean that you're going to win because you're still competing, of course, and it also doesn't necessarily mean that you're not going to negotiate because you're probably still going to have to negotiate with someone. It just means that that you can focus your proposal a little bit better.

[25:05] Very cool. Thank you very much for clarifying that. So, Mark, I've learned a ton from you over the course of our conversation about negotiations and working with procurement, not dealing with. I hear a lot of people say, well, I'm dealing with procurement and I don't know about you, but anytime I hear someone say that I'm dealing with something, it's usually not positive. So working with procurement is a highlight for today. As we are wrapping up, I got a few questions left for you. The first one being, you could go back and talk to younger Mark And you can say, hey, Younger Mark. How old is Younger Mark?
You can go back as far as you want or as short as you want. It could be March. It doesn't matter.
And you can say, you know what? You're going to have this amazing company called Negotiations Ninja, great podcast, et cetera, et cetera. You're also going to have a bunch of scar tissue and bumps and bruises. What would you advise Younger Mark to say or do differently so you arrive at the same place but with fewer bumps and bruises?
Invest in marketing heavily earlier, invest in conferences earlier, and invest in public speaking earlier.
Very cool. So conferences and public speaking, tell us more about that.
The most amount of leads that I get are generally from where I speak at events.
When I speak, people are like, oh, is that what actually happens? We should talk to this guy.
And now we have a conversation, I generate more leads, I generate more business as a result. So, that's what I would advise younger Mark on, get on the speaking circuit earlier.

[26:28] Love it. That's a great piece of advice. I haven't heard that one before. Also, you have been featured in a number of publications and podcasts and things like that. What are you listening to, reading or watching that the audience might want to check out to support their own professional and personal development? Yeah, I've just finished a great book called What Everybody Is Saying. It's – Amazing.
The second time around that I'm reading it. It's fantastic by a guy named Joe Navarro. Yes.
He was a former FBI behavioral analyst and it tells us all about body language and how body language works.
I try and read at least one of those books every two to three weeks and it's usually something in communication, interpersonal skills, those kinds of things just so that I can keep on top of what I'm doing.
In terms of what I'm listening to, I listen to a lot of old school sales stuff like Zig Ziglar, Jim Rohn, those kinds of things.
I'm generally not a big fan of a lot of the modern sales podcasts that are out there, except for this podcast, of course.
And there's another one by John Barrows that I'm a big fan of.
I'm a huge fan of John Barrows. I think he does a phenomenal job on his Make It Happen Mondays podcast, so I really, really like that.

[27:49] Very cool. We will put links to all of those in the show notes, and I will echo what everybody is saying. I recommend that to all of my new clients when we talk about building rapport and body language and interpersonal communication. Highly, highly recommend that book as well.
So, Mark, you've already given us a ton of incredible ideas and insights about working with procurement. What would you like to leave us with today? Something to plug, a bit of wisdom. The floor is yours. Yeah. If you really want to learn how to negotiate effectively in the B2B world, we need to be having a conversation. And the easiest way to get ahold of me is to go straight to my website, which is negotiations.ninja or reach out to me on LinkedIn.

[28:27] Awesome. We will certainly put all of those links in the show notes. So if you've got as much amazing value out of today as I have, certainly reach out to Mark on LinkedIn or through his website. Mark, this has been wonderful. I'm really looking forward to carrying on our conversations offline. Thank you for being a guest on Full Funnel of Freedom today.
Thank you so much for having me, Hamish. I really appreciate it.
You've been listening to the Full Funnel of Freedom podcast. I've been your host, Hamish Knox. Today we have had amazing ideas and insights from Mark Raffin, owner of Negotiations Ninja about how to work with procurement because sales and procurement are working towards the same goal. The Full Funnel of Freedom podcast is brought to you by Sandler Calgary. Sandler Calgary's clients desire to dominate their niche and seek to scale sales sustainably. If that sounds like someone you know, encourage them to check out www.hamish.sandler.com forward slash how to Sandler to book an initial 15 minute call. Thanks for listening. Leave us a review and a rating, share this episode with a sales leader or two in your network who you care about. And until we connect on the next episode, go create full funnel freedom.
Thank you for listening to Full Funnel Freedom with Amish Knox. If you want to increase your sales with ease, go to Full Funnel Freedom.

[29:46] Music.