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Negotiation Versus Sales: Understanding The Secret To Win Deals With Mark Raffan [Episode 138]

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Is negotiation the same as selling? What influences your answer?

Your negotiation skills can make or break your sales deals, and each has its skill sets and unique qualities that separate them from each other. This week, Doug C. Brown speaks with Mark Raffan of Negotiations Ninja on leveling up your negotiation conversations to the top 1%. Doug and Mark discuss the differences between building trust versus rapport, creating value in negotiations, and more.

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In this episode you will learn:

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Episode’s guest – Mark Raffan

CEO Sales Strategies | Mar Raffan | Negotiation And Sales

Mark Raffan is an award-winning negotiation trainer, speaker, podcast host, well-known negotiation expert, and entrepreneur. He has coached executives and teams in some of the largest companies on the planet and has been featured in Entrepreneur, Forbes, Thrive Global, and Supply and Demand Chain Executive Magazine (as a 2021 pro-to-know).

transcript

Negotiation Versus Sales: Understanding The Secret To Win Deals With Mark Raffan

I’ve got a great guest, Mr. Mark Raffan. He is a negotiation expert. Mark and I are going to talk about what’s the difference between negotiations and sales and how you use both of those when you are selling, when you’re trying to pull together a great deal, or when you have a challenge that comes into your company. If you’ve ever wondered, “What is negotiation and how is it implemented?” we’re going to talk about that in great detail in this particular episode.

For those of you wondering, “Where does my company stand or where do I stand in my career, company, or revenue? I want to grow in both capacities,” we put together a marketing and sales checklist audit for you. You can pick that up at CEOSalesStrategies.com/checklist. You can do this on your own. It’ll give you a good idea of where you need to improve within your company. Let’s go speak with Mark now.

Mark, thanks so much for being here on the show.

Thank you so much for having me. I appreciate it.

Why don’t you tell everybody what you do or the specialty? I’m so excited to have this conversation on negotiations but I don’t want to steal your thunder.

We help enterprise sales and procurement teams drive better value, get better savings, drive more profitability, and make more money for their organizations.

How do you do so?

We do it through our negotiation training and coaching.

Negotiation is an interesting word. I don’t even know what the root of the word is. I’ve got to look it up. We all understand negotiations but not on the level you and I have talked about before. Why don’t we dig into this? A lot of people fear negotiations or they think they’ve got to dig in and win. It turns into a metaphorical arm lock sometimes. What is negotiation to you and what should it be for other people?

Negotiation is simply both parties coming together to try and get to a deal. Two or more people are trying to come together to try to create a deal. The keyword is try. Sometimes negotiations don’t work out. Sometimes you go to the end of the negotiation and it doesn’t work out. Both parties have to walk away or one party has to walk away from the deal. Fundamentally, it’s about trying to create value. That’s the reason we’re here.

Otherwise, we wouldn’t be having the conversation in the first place. That creation of value is even in situations that may seem very conflict-oriented. Maybe you were sent some faulty machinery or you have an issue with a service and you’re trying to claw back additional value. It’s about creating value and about both parties being able to try and do that. Also, trying to be able to divide that value between both parties.

If I understand correctly, sales itself, I would view it as a negotiation based on what you’re talking about, but you’re also talking about post-sales things that come up, operational things that come up, and customer service things that might come up. We’re always in a negotiation if we’re always trying to provide value, are we not?

There are a lot of parts of the sales process that contain aspects of negotiation where we specialize primarily at the bottom of the funnel. It is when you think of getting to the commercial negotiation when you have to deal with someone where they say, “We’re interested in putting a deal together with you. Now, let’s work out the details of that deal.”

That’s where we specifically specialize. To your point, there are a number of different aspects of negotiation that exist throughout the business cycle, whether it’s the types of questions that you ask, the type of listening that you do, or resolving conflicts after a sale or even before a sale is done. There are a number of different parts to negotiation that exist throughout the cycle.

We’re speaking with Mark Raffan. He owns a company called Negotiations Ninja. I love the name. A lot of people are saying, “I got the concept. That’s cool, but I go into these negotiations and I don’t even know how to prepare for something like this.” I’m going to ask the question, how do you get prepared for negotiation, Mark?

If I had someone who came to me and said, “I don’t know how to prepare,” that would be a breath of fresh air because the vast majority of people believe that they do know how to prepare. Unfortunately, they’ve been led to believe that negotiation, like many things in life, is something that you shoot from the hip from. It’s unfortunate because we’ve been convinced and led astray by modern media, movies, and TV shows where you see these slick-talking sales types that are brilliant at stringing sentences together, inflecting their voice differently, and are able to come up with the deal seemingly out of thin air.

That’s not the reality of negotiation. If you’re worried about how to prepare for your negotiations, that’s a good spot to be in because it means that you’re self-aware enough to know that you do need to know how to plan for your negotiations. Fundamentally, when you start planning for your negotiations, it’s first about understanding, “What do we want to get out of this deal?”

If I go into a negotiation with you, I need to be able to determine and benchmark my success because, at the end of the deal, you’re not going to open up your books to me. I’m not going to open up my books to you. We’re not going to say, “Who got the most value here? How did we do?” I need to be able to be very clear prior to going into a discussion with you to determine what it is that I want. Unfortunately, most salespeople that I talk to say the following, “Mark, I want to get a ‘good deal,’” to which my response is, “Congratulations, so does everyone.”

That doesn’t mean anything. What I need you to try and understand is what constitutes a good deal for you, for this specific negotiation that you’re going into? It may be that you want to make more money, reduce risk, improve the relationship with the client, improve communication, or reduce liability. It could be a number of different things that you want to try and achieve. We call those aspirational goals. Once you get clear on what your aspirational goals are, then you can put in steps to be able to negotiate things into the deal that will help you to achieve those aspirational goals.

I’m coming in with a list of wants that I’m getting clear on what is a good deal for me. This might be a little funny, but when you were saying that, I was writing down. I’m like, “I have a discussion with my wife about something.”

Perfect. This is applicable to personal stuff, too.

I’m writing down, “A good deal for me is…” it’s about some wants. The other party’s going to also have wants, but they may not be clear on what a good deal is for them.

Most are not. You bring up a good point. First, we need to get clear about what it is we want to be able to generate from the deal and, also, what’s going to drive that. For example, a lot of people in the Western World on January 1st set the primary aspirational goal for the year of “losing weight” or being healthier. That in and of itself is a great aspirational goal. It’s something that we can aspire to, but on its own, it doesn’t mean anything.

CEO Sales Strategies | Mar Raffan | Negotiation And Sales
Negotiation And Sales: We need to get clear about what it is we want to be able to generate from a deal and what’s going to drive that.

We still have to break down what it is that we’re going to do to get to that aspirational goal. The same is true for negotiation. If you say to me, “Mark, I want to make more money in this deal in this upcoming renewal that I have,” I would say, “Wonderful. How are we going to do that?” We’re going to increase prices, cross-sell more products and services, upsell a premium thing, increase the term, or reduce the payment terms.

There could be a number of different things that we do to increase the amount of money that we’re trying to earn. Those are the levers, and we call them success drivers, that we have that drive, the aspirational goal of making money. To your point, the counterparty also has goals that they want to achieve. They may be like you prior to reading this conversation, going, “I want a “good deal,” at which point we can suggest goals to them.

If we come into the conversation and say, “Doug, what do you want out of this deal?” They say, “We want a good deal. We want something that’s fair.” We’re going to ask better-probing questions to say, “What does that mean to you?” If they can’t articulate what it is they want to generate, we, at that point, get the amazing opportunity to be able to seed ideas in their mind about what they could want.

We can say, “Other people like you Doug that we’ve had a conversation with have wanted,” we then get to list off all of the things that we think they could want from the negotiation that we know we’re going to be able to knock out of the park and say, “Is that something that you could want?” That’s going to start spurring ideas for them. They’re going to say, “Yes, I like that,” or, “No, I don’t like that.” You’re going to start to come to an idea of what it is they want to get out of the negotiation. Once you have your side figured out, which should be pretty crystal clear before you go in and their side figured out when you have a conversation with them, you now can start articulating a deal that makes sense.

That seems so simple.

It is. Many people overcomplicate negotiation because of what we’ve seen in the movies. They think it’s saying the right script, inflecting on the right word, or being clever with the right objection handling technique. Some of that stuff is important. Don’t get me wrong. It’s great tactical information to have, but it doesn’t matter how good your tactics are if you don’t know what you want to achieve. If you don’t know what you want to achieve, you can sound wonderful but still achieve all of the wrong things then have no idea what it is you’ve achieved in the first place. If someone asks you, “Did you get a good deal?” you may say yes reflexively, but in your head, you’re probably going, “I don’t know if I got a good deal because there is no way to be able to determine what I wanted in the first place.”

It doesn't matter how good your tactics are if you don't know what you want to achieve. If you don't know what you want to achieve, you can sound wonderful but achieve all the wrong things. Share on X

That makes so much sense. We’re speaking with Mr. Mark Raffan with Negotiations Ninja. It’s at Negotiations.ninja. I was thinking about how simple this is and how many times I’ve seen people that I’ve shadowed in consulting or coaching and listened to them. I’m like, “No, you’re missing what I call the real it,” which is you’re saying, “What do they want on the other side?”

If we’re able to ask questions that are non-threatening that makes them go, “I don’t know,” or, “I never thought of it this way,” we’re building some expertise in positioning there because we’re able to bring them to a point that they didn’t know, but we’re able to do that in a fashion that makes them feel safe in that process. That’s what I’m hearing you say. Is negotiation about creating a high level of trust so that we can bridge that gap?

I would say that it’s about rapport. When I hear the word trust, it is such a big idea in negotiation. There are a few delineations that I’d like to make. Number one is the difference between trust and rapport. Rapport is the feeling that you and I have together. We’re friendly. It’s nice and we’re jelling, to use modern vernacular. Trust is something else entirely.

Trust is, number one, a spectrum. You would trust me to have a conversation on a show, but you may not trust me to go and take care of your house on the weekend, for example. Where we apply trust, how we apply trust, and how much trust we give to someone is different in each circumstance that we give in any business dealing. I’m much more oriented towards the word rapport when it comes to any business dealing than I am oriented to the word trust.

If we were going to talk about trust, there are two things in trust that people need to pay attention to. Number one is real trust. If I trust my best friend, I know that that guy is going to be there for me through thick and thin. If I call him now and say, “You need to get on a plane from Houston to my home city now. I’ve got a 911. You got to get here right away,” he’s on the plane. That’s an immediate thing that happens right away.

There is also the perception of trust. Trust is that feeling that I have that I know that you’re going to be there for me if I need you. There is the perception of trust that I can also use to create a faster degree of trust when you and I are talking. If I can change how you perceive me and increase your perception of trust in me, the feeling of trust will increase. Whether you trust me or not remains to be seen because we can’t have that deep conversation.

I can increase my trustworthiness or at least the perception of trustworthiness in your eyes to make me feel like I’m more trustworthy, which accelerates your feeling of trust towards me. How we do that is primarily how we have conversations around expertise and experience. It is all of those things that you and I spoke about at the beginning where you said, “If we outline all of the things that they may want in the conversation, I’m now exposing something to them, giving them new ideas, and making them think of something that I haven’t considered before. This accelerates my trustworthiness in your eyes and now you can ‘trust me’ more or at least have the feeling of trusting me more.”

I’m going to come back to this. I know you wrote a book on this whole subject matter of negotiations. We don’t do direct pitches here on the show, but I do want to highlight your book because it is an amazing thing. Do you want to tell people what the book is, what it’s about, and how they can get it?

Thank you very much for the opportunity. I know you don’t do this often, so I’m quite honored. 9 Secrets to Win Deals and Influence Stakeholders is the book. You can find it on Amazon. That’s the best place to get it. It’s the cheapest there. It’s all about teaching people how to plan and prepare for negotiations, specifically B2B sales professionals. It’s speaking from a procurement perspective.

CEO Sales Strategies | Mar Raffan | Negotiation And Sales
9 Secrets to Win Deals and Influence Stakeholders: A Field Guide to B2B Negotiations

For the longest time, my career was in procurement dealing with B2B salespeople. For a very long time, I saw hundreds of pitches and negotiations every single year and the inside of me was screaming saying, “Do this differently. There is a better way.” This is my opportunity and my attempt to be able to try and convince salespeople that there is a better way to do this.

I want to come back to this because that definition you gave between rapport and trust was the most definitive and best explanation of the differences I’ve ever heard in all my years of doing this with people. I don’t think people understand rapport because it’s taught. It’s trust, like, and respect. What I heard you say is there is trust, then there are the perception of trust, and there is rapport, which has some of the elements of trust, but it’s not real trust. I might trust you, but I’m not going to give you my key to my business so you can come in there 24 hours a day or give you my bank account. There are different degrees of perception, correct me if I’m wrong, that lead to a decision point where I have pure trust.

I would argue that if trust was that important or the way that we should think about trust, if trust was that important in a negotiation, there would be no need for a contract because I trust you implicitly. If I trust you, then we don’t need a contract. That’s why we need a contract because what we’re talking about most of the time is good rapport. People often replace those words. There is a brilliant book on this. He has a very different opinion to this than I do and it’s important that people listen to that opinion so that you can have a balanced perspective on this.

It’s called The Trust Factor by Keld Jensen. Keld is an amazing negotiation expert and he wrote a whole book on this. It’s a very different opinion than mine, but it’s a very good perspective. There is another great book. He’s not a negotiation guy, but he’s an InfoSec guy, a pen tester. His name is Chris Hadnagy and he talks all about rapport building and how to build rapport. Those two books will give you a pretty decent perspective of not only how but how other people think about this as well.

Are the two books a blend of what you do?

Not really. Chris is much more focused on human hacking, so how do I develop rapport with you right away so that I can get to information that may help me break into your software, essentially? He’s an InfoSec guy. He teaches people how to protect against this and helps corporations be more secure in what they’re doing. He shows people how to protect against this. They’re the the same techniques on immediate rapport building or good for building up the perception of trust with someone. Whereas, Keld is very different in my thinking. He is a big proponent of trust in negotiations and believes trust is something that can be measured in negotiations.

I want to point out something that I did purposely and you responded amazingly to this. This may go back to negotiation. I don’t know yet, Mark, but I can certainly say from the sales standpoint. What I asked you in the way you responded elevated you as an expert in this whole field of trust. Hence, you’re a negotiation expert as well. I wasn’t doing this to be sneaky. I was doing this because I was curious on what your answers were going to be and it was done at the highest expert level, so kudos. When it comes to negotiation, do we also want to be positioned as an expert in that process of what we’re doing as well or not?

The keyword that you said is expert in the process. I had an interesting conversation with someone, and I sell negotiation training for a living. I come across a lot of people who are having conversations with me about, “Mark, we’re looking for X, Y, or Z.” The interesting conversation I had was when they said, “Mark, you need to be an expert in this in-depth process machinery that we’re using for our industrial automation process if you want to teach our team how to negotiate for it.”

The guy’s name was Bill. I said, “Bill, respectfully, I don’t think that that’s what you need. I don’t think you need an expert in that machinery.” He said, “What makes you think that?” I said, “If you needed an expert in that, all you would have to do is walk down the hall and find the large rooms of people who are currently experts. That’s not why we’re having a conversation because if you needed a data expert, you would just go to them. What you need is a process expert.”

In negotiations, you’re correct. Someone who’s an expert in the process of handling that conversation to be able to drive additional value is what you’re looking for. If you get too deep into the weeds of the specific thing that you’re negotiating, you’re going to lose the big picture. Another example, early on in my career, I worked in an industrial capacity. I was negotiating a very large deal. It was about $250 million and we had been negotiating this deal for nine months.

CEO Sales Strategies | Mar Raffan | Negotiation And Sales
Negotiation And Sales: Someone who’s an expert in the process of handling a conversation to be able to drive additional value is what you’re looking for in negotiations.

I figured we were probably about 75% of the way complete, but the counterparty and I were butting heads. We had lost the big picture. We were arguing over minutia, nonsense within the grand scope of the deal. Both of us agreed, “This isn’t beneficial. Neither of us are benefiting from this conversation. Why don’t we go speak to our respective teams, ask them what they want to do, and we’ll go from there?” We agreed to do that. Both of us were removed from the negotiation. Other people got put in place with us and they closed that deal in three weeks.

That wasn’t great for the ego. Immediately, you feel terrible when that happens because you think to yourself, “I screwed this up. For nine months, I’ve been negotiating this deal. I got pulled off the deal and now this other person marches it over the finish line.” The reality is that we got so deep and stuck in the details of something that in the grand scope of the deal didn’t matter that we lost track of the process and the overall value of the negotiation. All that story is to say you’re correct. What you need is a process expert, not necessarily a specific industry expert or a discipline expert.

I’m so grateful you brought this up because I teach the same thing to sellers. Let’s say I’m doing a talk. “How many of you here think you need somebody in your industry to be successful in selling?” If you’re selling biotechnology, you’ve got to have a PhD or some level of expertise in that. Inevitably, a lot of hands go up from CEOs or from presidents of sales, and I ask them, “Let me teach you how a process will allow you to get somebody who understands the process of how to sell.”

I won’t go through the whole thing, but the reality is I’d ask them questions like, “If you hired me and I could come in and use a process that I knew how to reach out to people, get conversations going, and set appointments that I and the PhDs could get together with that team, and we could walk through that and they could answer the technical questions on the back end, would that be successful?” Inevitably, they all go, “Yes.” We need somebody who understands the process of how to get appointments set for people who are, quite frankly, smarter in that discipline than that salesperson will ever be, the sales engineers, or PhDs.

What I’m hearing is it is a direct parallel between that and negotiations as well that the process of the negotiation is the most important. When you didn’t follow that in your previous example, it got mired down into the things that it should not have because of the process. I’m so grateful you brought that up, and I’m also grateful because a lot of people think, “This guy’s an expert,” which you are in negotiations, “He’s probably never failed at this at this point.”

That couldn’t be further from the truth. I’ve bombed. Fortunately, the successes have outweighed the failures, which, thankfully, that’s great. I’ve had major failures. A lot of people, when they hear people like you or like me talk about their field of expertise, they think to themselves, “I could never do that.” That’s crazy talk because I learned this the same way everyone learns this. I read a bunch, applied a bunch, failed a bunch, and reapplied what I learned and, through that process, became good at what I do. The same is true for everything.

It is analogous to any sport or discipline. If you want to be a master in chess or martial arts, you go through all the degrees of a black belt and they give you a white belt again, if I remember correctly, and then you start all over again. This has been fascinating. Folks, go and get the book. Mark, please tell them how to get the book again.

Go straight to Amazon, 9 Secrets to Win Deals and Influence Stakeholders. You’ll find it right there. I would love to hear your feedback on it. If you feel it’s worthy, leave an Amazon review. It’s a fantastic guide to teach you how to negotiate well.

I appreciate you being here. I have one last question. Something from the book and our conversations came up. I wanted to cover this point because I found it fascinating. How do you do negotiations so it’s not a win-win but it’s also not a win-lose position?

I’m going to say something fairly controversial for your audience, but I’m going to back it up. Win-win, in my opinion, is very misleading because it presupposes that both parties can win, which, in the B2B world, if we were going to do that, we would need to be 100% rational, reasonable, and logical with each other. We would also need to be 100% transparent with each other. Even if we could be those things, we would need to be “fair” with each other, but what is fair? It’s based on what your perception of what fair is but also what my perception of what fair is. When people hear that, they say, “If Mark doesn’t believe in win-win, he must believe in win-lose.” That’s not true either because I believe that win-lose is built on the same premise.

There is no way to know, which is why we set up the book. It’s why I wrote the book because it’s about goal-based negotiation. Understand what it is you want to achieve. Set the success drivers to be able to drive for those aspirational goals. Understand what the counterparty wants to achieve. Set the success drivers for those things, and then facilitate the conversation through a series of questions that you would ask. We take people through four sets of questions that they do need to ask, then we talk about a bunch of strategy that goes into that. We call it a goal-based negotiation and it’s the way that we approach negotiation.

Mr. Mark Raffan, thank you so much for being on the show and bringing your A-game. I appreciate that.

Thank you so much for having me. I appreciate it.

I love the part about trust, perceived trust, what is trust, and how it is different from rapport because a lot of people think that rapport is trust. It has a component of it. What did you learn from this episode? Did you understand that negotiations are a process? Do you understand that sales is a process? If you have a process and you follow the process and the other person on the line or the other person in front of you, if they’re willing to go on that process, too, you both go down the same journey together.

That is rapport building in itself when everybody’s in congruence and in agreement. What did you learn? Write down your top three things that you learned out of this episode. Do it now because you will forget later or you will forget to do it later. This is all about creating incremental growth through the day and through reading this episode.

If you love this show, please give it a review. I would very much appreciate it. If you would like the sales and marketing self-audit checklist, please go to www.CEOSalesStrategies.com/checklist. Also, we have another resource for you, which is an eBook that I wrote on the non-stop 1% earner. If you want to learn how they think and act, go to www.CEOSalesStrategies.com/1PE.

Until next time, go out and sell something. Go out and play win-win and, as Mark says, goal-based winning together and making somebody happy by helping them with their problems or with gaining an opportunity. Sell a lot of this stuff, do it profitably, and make sure that they get their end goal and you get your end goal. It is the strongest sale ever. It will spark more referrals for you. Until next time, to your success.

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