Episode Transcript
[00:00:00] Speaker A: This sales manager comes and sits down with me, and we're kind of going back and forth on a used car, a price. And he sort of just places this paper in front of me on the desk with the number. And I looked at it, and I smiled. And he was waiting for my response. I didn't respond. I just smiled, looked him in the eye, and 15 seconds, 20 seconds, 45 seconds. I would say at least a minute went by, and he said, I see this number doesn't work for you, so let me come back and see what I can do. I didn't even say anything. All I did was observe and wait for a response.
Welcome back to 3564, a podcast for the middle. In today's episode, we are diving into all things negotiation. Now, I found that most people do not enjoy negotiating. They dread the kind of activities where they know that, for instance, haggling over the price of something is going to happen with their transaction. So things like purchasing a car or negotiating that salary increase, you're looking for so many different moments in negotiation in our life take place. And Kevin Headley, a regular here at 35, 64, is going to join me and give you tons of great practical tips on how to navigate all things negotiation. So let's jump in. Welcome to the show, Kevin. It's so good to have you back.
[00:02:00] Speaker B: Thank you, Karen. Really excited to be back on here, especially after listening to so many of your episodes and the other folks that you've had on. It's been pretty incredible to see and hear you go through this journey and love being part of it. So thank you.
[00:02:12] Speaker A: Yeah. Well, let me dive in. I get asked so much about negotiating, and no one better to ask than a seasoned sales executive like yourself. How important do you think negotiating skills are?
[00:02:31] Speaker B: Oh, man. I mean, when you talk about what we do in terms of sales, negotiation is almost always at the top of the list. And the skills that are required to negotiate confidently, negotiate competently, and really create. And I'm going to use this moniker, create a win win between you and the customer. They're paramount. I don't think I would be where I am today if I hadn't started negotiating when I was a kid, whether it was with my parents or with siblings or with friends, and then. And then building negotiations for bigger and better things.
[00:03:08] Speaker A: From there, I learned a lot about negotiation from sales executives just like you through my career. And one of my favorite tips from them is simply, everything is up for negotiation. There is not a single thing that you cannot ask for. The worst they can say is, no and that kind of set everything for me in a new light. Not only contract negotiations for things like purchasing a car or getting a raise, but negotiating with people in your life on the regular for an exchange of things.
So what do you think about that?
[00:03:52] Speaker B: I think that that is a very good statement, but it has to be qualified. I think that everything is negotiable, but there is a way to negotiate everything. And what you may negotiate in one way may not be another way. For instance, I'll just tell you a quick story. I kind of went through a negotiation with my wife a couple weekends ago. We were at Costco, and I was looking, as I always do, at the electronics and tvs, because that's where I'm drawn. And she gravitates toward the jewelry. And so I actually had this little idea pop up in my head. I walked over to her and I said, hey, what looks good? She's like, oh, I like this. And I like this. I said, you know what? Let's get it. Let's just get it. And she's like, okay, that sounds great. And she's like, well, wait a minute. Why? And I said, well, you know, why don't we get you this? And then I'll get what I want, and we'll both win. It's a win win. So she realized pretty quickly what I was trying to do and where I was, but the fact that I came up with and just like, hey, let's get you what you want, and then I can get what I want, and we can both, you know, spend a little bit of our hard earned money and win on this thing here and be happy about it. So I haven't actually got what I wanted yet, but I've been laying the groundwork. I'm a pair of earrings and a necklace in, and whatever I'm getting is going to be good.
[00:05:09] Speaker A: Oh, my gosh. That is funny.
[00:05:12] Speaker B: Gosh.
[00:05:13] Speaker A: Do you ever leave Costco without spending, like, 250 minimum?
[00:05:17] Speaker B: It's a minimum, Karen. I mean, I spend, like, $98 on a pack of ribeyes, so, I mean, I'm a third of the way there already, so, yeah, Costco is always expensive, but I love it. I just love the experience.
I'm a Costco junkie.
[00:05:34] Speaker A: Do you eat all the snacks throughout?
[00:05:36] Speaker B: Ten years ago, I would almost never miss a snack. I learned the hard way that I don't like beets by going through the Costco snacks, at least the Costco beets that they were sampling that day. But now I'm not. I kind of skate ever since COVID I kind of skate past the snacks. Unless there's something I really see that I would like. I've kind of toned down the snacking, but the special events. I used to drive by the special events as fast as I could, but now, like, there was some love sack event, and I. And I had to, like, I had to go see it. I had to. How do you design this? What's the deal? Why is it different from the store? You know, getting into that whole negotiation thing with the love sack person there? But every time there's an event now, I'm usually drawn into what those events are and what they're selling.
[00:06:20] Speaker A: Wow. I think only older people like events like that, huh?
[00:06:24] Speaker B: Maybe that's it. You know, your old when you stop for the massage chair event for the third time without buying the massage chair.
[00:06:35] Speaker A: Oh, my gosh.
[00:06:37] Speaker B: Okay.
[00:06:37] Speaker A: I want to see if you resonate with this particular piece about negotiation.
I love it. Okay, here it goes. When you are negotiating with someone in person or on the phone, the first person to speak loses. So the psychology, though, behind this, Kevin, is people are uncomfortable with silence. So let me say, hey, Kevin, I'm going to sell you this car for $10,000. And then there's silence. People, for some reason, the psychology behind this is they want to fill the silence as fast as possible, so they will throw out something that they don't really even believe in just to close the gap. And it's very, very interesting. It works almost all of the time, but you have to be comfortable with the silence, and you have to be able to, like, sort of stand your ground. Have you ever used that tactic before?
[00:07:39] Speaker B: Yes, I have. In fact, I used it. I tried to use it unsuccessfully once. So I'm going to tell. Tell this quick story in Arizona. There's a very large retailer in Arizona named Spencer's, and it's led by a prolific leader. His name's Rick Biederbeck, and I think he's probably retired now. But when he was leading the group of stores, Tony and I, my TSM and I went in to negotiate with Rick, and we were negotiating a program. And you kind of got to know Rick. He's a really hard negotiator. When you go sit in his office, and when you sit in his office, your two chairs are looking at him across this massive desk, which has everything on it, and right over his left shoulder, just an eye shot is his master's in psychology. So it's not by chance that you're looking that he's got a master's in psychology right over his shoulder, and you're sitting at his desk. And we were going back and forth, having a pretty tense negotiation in this situation.
That company was a long term customer of ours. We were a manufacturer, and we were kind of negotiating the annual program, which can get pretty intense as it is, but then you can dial it up when you know you're going to meet with Rick, the leader of Spencer's. And so we were going back and forth, and each time we would go back and forth, the time distance between each response got bigger and bigger and bigger. And it was a volley. It was. It was like dinking back and forth in pickleball. There you go. And sure enough, the dinks got quicker and the space in between the dinks got longer. And I said something to Rick and he just sat there quietly, and I'm like, okay, this is the moment. This is the time when he's going to test me and see if I speak. And we're sitting there, and it was about 30 seconds. And then to my left, the guy that was with me, Tony, he just had to talk. He couldn't, he couldn't handle it. He had to talk. And that kind of broke the silence, and it kind of directed the negotiation in a different way. And so after that call, we kind of got out of there was like, Tony, this is what was happening, right? We were going back and forth, and we were in this trade, and this was a time when the first person who speaks loses. And in this case, it really wasn't really a loss as much as it was who's going to back down, who's going to back away. And I guess if you start backing away, that could be perceived as a loss. Right? So it was a great coaching moment for Tony and I to see how that played out in that particular situation. You know, I can say from there, we still had a great relationship with that company and still found ways to make our, our program, our annual program, worked for them, but we probably maybe gave them a little bit more than. Than we could have had we not spoken up at that moment and lost some of our momentum in that volley back and forth.
[00:10:29] Speaker A: Yeah, I don't know how long people are comfortable with silence. It is odd when you first try to engage with that, especially face to face with someone on the phone. It might be a little bit easier there. But I used this very tactic when I was purchasing a car about, I'm going to say three years ago, and this sales manager comes and sits down with me and we're kind of going back and forth on a used car, a price, and he sort of just places this paper in front of me on the desk with the number. And I looked at it and I smiled. And he was waiting for my response. I didn't respond. I just smiled, looked him in the eye, and 15 seconds, 20 seconds, 45 seconds, I would say at least a minute went by and he said, I see this number doesn't work for you, so let me come back and see what I can do. I didn't even say anything. All I did was observe and wait for a response. So that tactic has been really successful with me when I'm transacting with somebody live right there, and we're trying to get to an agreement. So I'd encourage anyone out there who is going to buy a car, in particular, used car. I think nowadays the negotiation is not as much as it used to be.
[00:12:03] Speaker B: Right.
[00:12:03] Speaker A: Everything is available online, but I would definitely suggest giving that a shot. Next time you are negotiating something, I would recommend that.
[00:12:13] Speaker B: In fact, I think that if you want to negotiate something, you have to first have the mindset that you like the negotiation. I think there's a lot of people who go into a negotiation not wanting to negotiate at all, and then they're surprised that they didn't have a good result. So if you go into a negotiation and you have this mindset that I don't like doing this, I don't want to do this, but I'm going to do this, your likelihood of success decreases significantly. But if you go into negotiation and you say, hey, you know, I know my, and I'm going to use some negotiation words that we use that I use with my team. Reservation point, the minimum amount that I'm willing to accept. Right. I know what my reservation point is. If I know what that is going into it now, I can adjust my mindset and I can treat this like a game and see how much better I can get from there. That's one aspect that you can change the way you're thinking before you go into the negotiation so that you can bear the silence. Right. You know that if you're going to, you're just going to sit there and you're going to wait and you're going to see what the person on the other side of the table does. And I do think that as you're negotiating different things, there are single transactions, like an automobile, that you're probably not going to go speak to that sales manager again for your next automobile. Maybe you will for your next car or suv, but probably not. You're probably going to next time you find one. Maybe it's at a different dealer or something like that. But if you have a negotiation where you're in with somebody who is a regular customer that you're going to meet and see with on a regular basis, that type of adversarial almost, in a way, gameplay may not be the best strategy for that long term. Win win. Right. That's where you're really looking long term and, and where you really want to understand what their reservation point is or their minimum floor is that they're going to be willing to go. And then you can start moving to what I call the aspiration point, where we. Where I want to be and understand what the other person on the other side of the negotiation, what their aspiration point is and where they want to be.
[00:14:22] Speaker A: Yeah, that's actually, I think, such a good point. There's transactional, one time negotiations. You'll never see this person again. And then there's the long term relationship building with, say, ongoing customers. And that sort of leads me into one of my next negotiation points that I have personally picked up through my career and going through hundreds and thousands of contracts, lots of different clients. And it's the most basic thing, but it. It just pays dividends. And that is people want to work with and do business with people they like. It sounds so basic, but it doesn't help to be a jerk. People don't want to help a jerk, but they want to help a nice, cheerful person who is giving off good vibes. And I asked a friend of mine who worked at an airline, you know, the check in, and I said, do you really sometimes just give upgrades to people? And she said, you know what? Yeah. When I really like them, I'll stand there and I'll see what I at least can do. So, Kevin, I can't get you in first class, but I can get you in, you know, the exit row in the aisle. I think you'll like that. So I just found that being nice and likable is really, really helpful instead of being an absolute jerk and, like, expecting things. Right.
[00:15:59] Speaker B: So, yeah, I think this is really important. And I like when you told the story about when you were making a car purchase, when he slid the paper across the way with the price, you didn't give him a scowl. You know, you didn't berate him anyway. You smiled. Right? You gave him a smile. And I think that, you know, we've talked about this before, but a smile can do so many things. And when it comes to negotiation, having that positive mindset that, you know what? I'm not going to accept anything less than what I. My reservation point, anything less than that. But no matter what, I'm going to make this a positive interaction, right? I'm going to do everything I can to make a positive interaction. And I can tell you that not every time, it will be a positive interaction, right. You'll come, you may walk away and go, well, that was kind of a bummer. But you know what? It was a bummer because the person on the other side made it a bummer, not because I made it a bummer. And I think when you have that mindset, that is what opens the door for the person on the other side to say, hey, I want to be part of this. I want to see this deal, this sale, this agreement. I want to see it go through in a positive way. And more importantly, after we make the agreement, I do want to see it be successful after we make the agreement. And I think that that's so important, too, because you can, if you go into this, the opposite, if you go into a negotiation, kind of with that scarcity mentality that there's a winner and a loser that comes out of here and you negotiate a deal that you won on and the other person lost on, you might end up having a bad experience after that. In the building industry, where I've spent most of my career, many contractors will say, if I subcontract a job, I don't want the lowest price because I know the lowest price is probably not going to get me the end result that I want, and it's going to cost me more in the long run. I want to make sure that the subcontractor I'm working with, it's a win for him or her so that they can provide the level of quality that I want. And I think that, that I'll go back to that mindset, having that positive frame of mind. When you go into the negotiation and almost treating it like it's a game, you're going to find people that like the game on the other side, and you're going to like playing it. I've got a customer today that I can call and be like, hey, let's negotiate on something, and he'll love it. Does he need an extra, you know, one or 2%? Probably not. Do I need to give an extra one or 2%, you know, no, I want to keep all I can. Right. And make the most money that I can for my organization. But there's this enjoyment that we have on seeing each other win. And so if you set yourself up for that in the pre planning stage, then your likelihood of gaining that in the end is so much higher.
[00:18:39] Speaker A: Yeah, I think you're right. And back to that car negotiation where the gentleman put the paper in front of me. I knew that he was motivated to close the sale that day. So a win for him was to transact with me that day. Now, why? Because it was the last day of the calendar and fiscal year for this particular type of vehicle. And so a tip that someone gave me and that you and I know, having been in so many sales situations, is we have numbers, we have targets, and we are more likely to negotiate when we're trying to hit an overarching goal. So you may not win on the price point right now, but I've won on my overarching sales goal. So going in to purchase a car on a holiday weekend, when there are special incentives for dealerships to move a certain amount of vehicles, is key. The last day of the year, New Year's Eve is typically the best day to negotiate a car deal. I don't know if you knew that.
[00:19:56] Speaker B: I did know that, and I think that's probably the negotiating spirit that's in both of us. And there's, like you said, there's other days, you know, the end of the month or the end of the quarter. And maybe even understanding what dealership might be in a position that they want to move more vehicles and understanding their motivation can significantly help you, because, like you said, you're bringing something to the table that they want and they have something that you want, and that's how you can produce that. Hokie. Win win opportunity. Right. And I jokingly say it's hokey. I subscribe to it. I love it, because I think that win win is what makes the deal. That's after it's consummated, a sustainable deal. Right. A negotiation that was positive for both people in the long term. And that preparation, whether it's your mindset or understanding the person that you're going to negotiate with and what is their motivation? What do they want? Why do they want it? It is so important. You know, one of the things that when we, you know, in a sales leadership aspect, one of the things we talk about with our entire sales organization is how do you make sure that you're preparing enough to give yourself the best possible outcome in the negotiation. And there's so much today that you can do through research and fact finding and opportunities to uncover what your client really needs and understanding what you need, while also understanding the tools that you have and the unique capabilities that you have that you bring to that negotiation that can help you be successful. I think you can't underestimate that power of preparation when it comes to any type of negotiation. And sometimes, if you're negotiating a hotel contract for an event, that level of preparation may just be 15 minutes before the call. Right. You may not need that much preparation for that type of negotiation. But if you're negotiating a long term contract or you're negotiating with a new prospect to try to bring them on board, that may take significantly longer to prepare. But the point is, is preparing so that you understand what their motivations are, so that you can meet those with your offer in terms of the negotiation, so you can ultimately get what you want.
[00:22:08] Speaker A: Yeah, you know, funny you mention events and hotels. You know, in my day job, I work with hotel contracts, multimillion dollar hotel contracts on the regular. And one of the things that I have found is most helpful, Kevin, is simply being upfront in a nice way. So, Kevin, thank you so much for your contract.
This looks great. I'm working with the Hilton. Their room rate is actually 299, and I see yours is 320. So I'm looking to fill the gap there. And they've also offered me 200 suites as free upgrades. And I don't see that in this contract. Can we get there? And just being frank in a very nice way, and then everyone knows what's on the table and what can be negotiated. So I do come to phone calls very often.
I use this exact line. I believe in the spirit of frankness and not dodging around here to save everyone time. So here's where I'm at. So I normally come to the table very honestly about what I'm hoping to get out of the negotiation, out of the gate. And that's helped me.
[00:23:29] Speaker B: Yeah, I think that's really good, Karen. In fact, I think that sometimes folks who maybe may be more timid or not used to negotiating things, they may be in a fact finding mode to try to understand what prices are available or on that first cut, and they may prematurely jump into negotiation before they're ready to commit to an agreement. And oftentimes that can end negatively because the person on the other side, ultimately, they want to get that commitment. And if you can't get that commitment to them, then you may not have as much ability to negotiate in that particular instance. And so I think it's really important if you're just getting into the negotiation game or it's not a strength of yours naturally, or something you want to work on to understand that you can do this preparation beforehand. You can still talk to the person and find out what their prices are. I wouldn't recommend negotiating that upfront. I would save that until after their first offer is given. And then once the offer comes in and you are now in a position to make a commitment, once you're in a position to make a commitment, then you can start to negotiate confidently because you know that you're going to be in a position to make that commitment. Now, there are some additional aspects to that because you may not be the ultimate decision maker. Right? So how do you, you're gathering the information. You have to go to somebody else who's going to approve of the final amount for the hotel contract. And so you might gather the information. And one way to give yourself that decision capability would be to gather that information, take it to the decision maker and say, hey, here's all the information I would like to negotiate to x. If we get there, will you approve that? Yes, we will approve that. Now you've got the ability to commit to making that decision, and you can negotiate with confidence and do exactly like you said and say, hey, I believe in being frank and upfront. So I'm going to tell you, here's where I need to be. If you can get here, we have a deal.
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You know, one of the things that also works with negotiation is being open to creative solutions. And by that, I mean there's a lot of different paths to get to what you want. And I'm going back to this car negotiation constantly. Because I've negotiated for so many cars, this one particular car, I knew that I had gotten the dealership to the lowest price. I mean, I had gone in five times. They knew that I wanted this car. And I just felt like it just was a little too much. And you know what I asked for there was a car next to it that was the same model, but it had beautiful wheels, really, really nice rims. And I said, you know what? I will buy this today if I can have the rims from that car. And what do you know? Within a minute he's like sold. And so it was a creative solution for me to feel like I had a winner and he got the price point he needed. So I definitely encourage people to think outside the box and ask for a blend of something that may be a little bit unique, but will work for everyone. Have you done that for clients before? Kevin?
[00:27:42] Speaker B: Absolutely, Karen. So in our sales organization, we call these sweet trades, and the sweeter the trade means that the value to me is different than the value to the person I'm negotiating with, right? So maybe it doesn't cost me that much. Perhaps the wheels on the car that you wanted, maybe the wheels to them were not that big of a cost difference, but to you, that was value that you really saw. That was a big deal for you. So we love working with these sweet trades. And the only way to identify the sweet trades, it goes back to that preparation, understanding what you can and can't do, understanding your customer, understanding the person you're negotiating with, and then looking for creative ways to get to where you want to go. There are times where I've been in a zero sum negotiation where we're just going to negotiate on your number and that's it. And those are the most difficult ones, and typically those ones end negatively. And the only way I've found to be able to turn around those, to be positive, is to bring a positive mindset like we just talked about, and then find these sweet trades and enthusiastically look for. Well, what else? Well, what about this? Is there, if we could, if we could do that, would that help you get to where you want? And I am confident that every time you go down that path to find those sweet trades, you'll find things that may not be as high a value to you or high a cost to you that you can give to the person you're negotiating with that might be wildly value or significantly higher in value. And that's where this real win win comes from. Because now you're finding ways to work together and find that win win.
[00:29:21] Speaker A: You know, I have a good story for you. A sales executive at a Fortune 500 organization is a very close friend of mine. And I was asking him about his hiring processes and how does he know that he has found a good salesperson to join the organization? And I thought he was going to give one of the he has charisma or she is, you know, X, Y, and Z. He said, I'll tell you what, there's a lot of ways to determine how a salesperson might be successful, but I won't hire them if they don't negotiate their contract. And I thought, that is so interesting. So, Kevin, you know, I'd like to offer you a job at $100,000. You're going to be the sales manager for this store. And he would not actually bring them on board if they didn't try to negotiate something better. He thought, if you won't negotiate for yourself, you won't negotiate for this company. I thought that was really unique.
[00:30:27] Speaker B: Yeah, I think that's really good. I think that's one of those things that you could get yourself in a tough pickle because you could really like the person for their charisma and all their answers. And then they don't negotiate and they're like, oh, well, I guess they're not going to have that kind of it factor that that I want, and you're going to have to move on. I do like that. In fact, I had an experience just last week that was similar, only it was on the other side. We were the ones extending the offer, and the candidate negotiated. And I told the hiring manager, I said, hey, first of all, I think it's great that the candidate's negotiating because that means that they have the confidence and the will to fight for something they believe in. And just like your sales executive said, if they do that for themselves, they're going to do that for our company. Right. They're going to do that for us when they're out in the field. So, one, it's great that they're negotiating. Two, just because they countered with a negotiation doesn't mean that we have to meet it. Right? We can still find sweet trades. And so maybe there is, in some cases, it might be a salary portion or a reload portion. Right. There might be other things that are of value that you can say, hey, we can do this, and a signing bonus. And so I think having that negotiation on both sides and expecting it is going to set you up for a much better outcome because there are folks out there that if they don't expect a negotiation, they become offended when someone wants to negotiate with them. And I think that the offense would come not that they are negotiating, but potentially how they're negotiating. And so it goes back to what we started talking about. It's not that you're negotiating, it's how you're choosing to negotiate that makes all the difference in the world. And I think that's what this executive's talking about is how does the person conduct their own personal business? Because if they do it well on their end, they're going to do it well for me as well.
[00:32:21] Speaker A: What do you think some areas of low stakes negotiation would be for our listeners who are not comfortable negotiating like you and I are? What would be some good areas for them to test those skills?
[00:32:33] Speaker B: I think if you are in a store that's maybe a national chain that has a lot of processes set up and you try to negotiate at Best Buy for an Apple product, you're probably not going to have a good experience.
[00:32:48] Speaker A: No.
[00:32:49] Speaker B: Okay. But if you wanted to try a very low stakes negotiation, you might try a convenience store that's operated by an individual owner. And you might think about some of this, hey, how about if I buy a couple of these? Would you throw in that? Just try it and see what they say? Now they know you're there and they might absolutely say no. And I think if you talk about a low stakes negotiation, your reservation point is, I was going to buy this bottle of water in this protein bar. I was going to buy them anyway. Throwing in the candy bar was a sweet trait. So I'm already going to buy these. If this person says no, I'm still going to buy them. Right. And that's a really great way psychologically to prepare yourself to lose a negotiation so you can see what that's like, and then your likelihood of actually winning in that starts to go up. So if you take that bottle of water and that protein bar up to the counter and you say, hey, I like to buy these, and, oh, would you throw in that? Tell you what, I'll buy these. If you throw in that twix, I think you got a pretty good shot at them saying no. But I think you also have a shot at them saying, sure, why not? And if you think about something like that where you're negotiating with somebody who owns their own business, who's running their own business, and you do it in a positive way, where you're willing to make sweet trades, I think you're going to find a success.
[00:34:09] Speaker A: I was thinking about garage sales. I know those aren't very popular anymore, but everyone who goes to garage sales is always negotiating everything. You know, the records are a dollar apiece. No, $0.25. Will you take 25? And everything is sort of a negotiation there. And I do think some of those smaller, privately owned businesses out there, whether it's appliances or furniture or even services. I think services, like maybe a plumbing job, for instance, hey, this is going to cost $1,000 according to this. But would you also be able to throw in my two toilets that keep on, you know, messing up over here? Could you replace them for that thousand dollars? I have done that pretty successfully for service based businesses. Do you negotiate anything like that at your house?
[00:35:03] Speaker B: Everything at my house is a negotiation, whether it's landscape lighting or flooring or installation of basically anything. But I always go in with the negotiation of, okay, I know I'm going to ask for something. I know I'm going to, depending on the price that I get, is going to determine how much I'm going to ask for. And if the person says no, I want to be really careful because if I have other people who are lined up who could do the work, then I can be more aggressive in what I'm asking for. And if they say no, I can move on to the next person if they're the person. And I'm not changing. I'm not changing that. I'll go back to my example that, hey, I'm going to ask for the $50 off, or better yet, I'm going to ask for something else in addition to and maybe even tie some money to it that's valuable to me. Hey, oh, by the way, like you said, can you install that ring light that I just got in? Can you throw that up for me for an extra $25? Sure. I'm already here. I'm at your job for $25. It's totally worth it. Right. So I think it's important that, you know, being I'm in the plumbing industry, my role is in the plumbing industry today. And I would tell you that depending on your need, like if you need a hot water heater and you're out of hot water, your ability to negotiate that hot water heater is pretty low. Right. And the plumbing contractor is probably not going to be very interested in saying, well, let me, let me knock a bunch of money off. But if you had, say, a tank type water heater, which is the least expensive type water heater you could have, and you want to upgrade to a tankless water heater, and now instead of negotiating just on the price on the tank, you say, well, what if we could do a tankless for this much? Now that contractor has an opportunity to increase the ticket that they're going to get, you have the benefit of receiving more from the product they're installing more value from the product they're installing. And I think that's a good way to take a situation where you probably couldn't negotiate. But maybe you could add a little bit of the negotiation element if you're willing to pay significantly more, because it is significantly more to move from a standard tank type heater to a tankless water heater.
[00:37:11] Speaker A: So here's another interesting negotiation piece that I have found, and this is just psychology based, is if you are selling something, you should give at least a minimum of three options. Most people or businesses won't choose the most expensive. It just, it is the most expensive. They don't want to be the one who's, you know, paying too much. And most people do not want to do the cheapest option. Like you said, I know that if I go with this cheapest option, so if you provide three to four options, almost 99% of the time someone is going to select one of those in the middle. And so if you are trying to bundle, say, more services or something, I'd encourage you to work with your pricing. And this is you negotiating your own deals, right, for yourself for some reason, or for your own business. Do you guys do that over at your organization?
[00:38:14] Speaker B: So within our organization, as we buy product, we have an expert negotiator, and anything over a certain dollar amount, he gets involved in negotiating because he's so good at it. So it almost, it goes over to him if we're going to be the purchaser, but on the sales side, if we're selling something, we will almost always provide multiple options, like you said, for a customer to choose for pricing. Now, I will say this, though, in my experience on, say, a showroom floor where a customer has to make multiple decisions, you want to be careful in how many options you present, because people can be overloaded by the amount of choices that they have. So in a situation like that, you might actually be better to give them a, this or that, right? Do you like this or do you like that? And then once they've made this selection, kind of like your optometrist says, hey, which lens do you like better, a or b? A or b? And then he goes through, or she goes through all those different selections until you finally land on the one you like the best. They didn't say, let me flip through six lenses and you tell me one through six, which one you like? Because you're like, go back to four. No, wait, go back to two. So this a or b type option can be a really effective tool in helping people narrow down their decision base to having one final option that they've got. So I love the idea of presenting different options to choose from. But if you're in a world where there's a lot of options that are out there, instead of presenting them all at once, go with that Ab style and say this or that and then compare the next one, this or that.
[00:39:53] Speaker A: I love it. Okay, I'm going to put you on the spot here. So many people, in particular, executives that I've had the privilege of coaching. One of the biggest things that everyone wants to understand is how to negotiate their salary. I've been working here for five years, Kevin. You've been my boss and I believe I'm underpaid. I'm going to have my review with you next week. What are some ways that we can give our listeners some tips on how to better negotiate their salary?
[00:40:25] Speaker B: Wow. Well, now the question is, are any of the folks on my sales team going to listen to this? So first I would say if you want to negotiate your salary, I think you need to go back to that preparation and understanding sweet trades. Every position that you're in, you can provide more value. And for the additional value provide, you can ask in a reasonable, respectful way to be compensated for that value. If you're in a position where you are just underpaid and the work isn't changing, your likelihood of a successful negotiation in a very positive way is pretty low. Right. If you're not willing to provide more value and all you want to do is ask for more money to keep doing what you're doing because of inflation or because of whatever reason, then I think that the employer, right, your manager or boss has a tough time with that. And I was coached very early on in my career that you could go to the card of, well, if you're not willing to provide me that value, someone else is, and I can go somewhere else and get that value, and that's going to create pain for you. You're going to have to train somebody new. It's going to take you long, a while. You're going to miss opportunity during that training period. Therefore, you should just give me what I want now because it's going to cost you less in the long run. That's a card that you can play only once. And I believe that if you play that card, you will limit your upward mobility, your future upward mobility, because that's kind of how you went after that. But if you're in that situation and you can find value that you're maybe already creating, that hasn't been recognized. You can say, hey, I've been doing this job, and now I'm also been doing this. And here's the results of what I've been doing here outside of my normal scope. I would like to get compensated higher at the next interval when you're doing budgeting. This is what I would like. Right. And I think you can put your manager into a position of planning for it for you. Not by immediately laying it on their lap and asking for raise right now, but saying, I've been doing this value. You've been seeing the value. I've created value in it for you so that you recognize it when you go through the next annual review or when you're budgeting for salaries. I would like to increase my compensation as a result of providing this value. I think that that's a much more positive way to go through that negotiation. I would caution you, though, because if you go through that, you may not get the response you want. So think through what happens if you're told no. Because if you're told no and you really like your job and you like the people you work with, you could put yourself in a kind of an awkward position. Well, how am I going to do this? It all comes back to, did you go to the negotiation with the right preparation, the right mindset and attitude, and communicate clearly, respectfully, and in a positive manner so that if you're told no, that you can continue doing your role, and I guarantee you that if you're told no today and you take that in stride and you continue to provide value, that it will become a yes at some point. Whether it's at that organization or whether it's at a different organization, it will always be to your positive benefit eventually.
[00:43:49] Speaker A: I think that's really great advice, Kevin. I will add on to that that this is where you can get creative. You might not have an increase in salary, but maybe you can get an extra week tacked onto your vacation time. Maybe you can get an increase in title. So instead of director. I know you can't give me my $20,000 raise, Kevin, but would you make me a senior director? So get something out of it, even if it's not the financial piece. I've also seen folks negotiate what kind of teams they are representing. So, hey, I'd really like to be on this executive team from our marketing group. It's more visibility with the CEO and the CMO, and I want to make sure that I'm getting exposure internally to the leadership team. I've seen people do all sorts of interesting negotiations, but you can find what's worked if you can look around and ask what other people have done. But I don't like to have people go through a single review without getting something out of it.
[00:45:01] Speaker B: Yeah, I think that's really good, Karen. In fact, that goes back to sweet trades and understanding what's of value on one side and maybe lower cost or lower expense on the other side, and asking for those sweet trades, especially when they're for an opportunity basis, you might find yourself negotiating for more income or for a different title. And if you were told no on both of those, the manager that you're negotiating with may have a development opportunity that now it's in their head. You know what? Karen wants to level up. She wants to be seen by the CMO and the CEO, and I'm going to give her, when that next opportunity comes up, to level her up, I'm going to level her up. And it all works. When you go back to preparing for the negotiation, going in with a positive mindset, and then understanding the outcome, right. Understanding all the different types of outcomes that can be there. And I find for myself, I like to wrap my head around those outcomes, not that I'm okay with them, right, but that I understand what they are and what they can be so that I can properly manage my own emotions, given whatever the response is.
[00:46:08] Speaker A: Coming back to the positive mindset, being friendly, being positive and easy to be around when you're doing these, it makes it so much easier when you don't get what you want. And this is a really great example. I was just negotiating with a really large hotel chain just the other week for a client, and this was a multimillion dollar contract, you know, big stakes for them to win it. And I have the mindset of, it's better to ask. The worst they can say is no. So I asked for something, and they said, this is out of policy. This is not something we ever negotiate. We're really sorry, we can't do that for you, Karen. And I said, that's okay. I needed to ask to make sure I was getting the best deal for my client. And I said, I'm going to review these documents and I'll get back to you on our decision. And a couple of days later, they came back to me and they said, hey, we can't do that. It's still out of our policy to go that low on a room rate at this hotel. But you know what we can do? We'll throw in a $50 credit on everyone's room so they can get breakfast or drinks or lunch or coffee, whatever they want to use that for. You're happy, we're happy. Everyone's happy. And so they came back after the no with an alternative, but I was a graceful acceptance of the no. Okay, I understand. That makes sense. So it's interesting. I think we fail in negotiations when we're in a rush as well. I will say, don't do any kind of serious negotiations when you don't have time to do the research to get into the right mindset, when you don't need something this moment, like the water heater breaking down, you're not about to get a good deal on the services for your, your install. If you need the water now, you're just. You just want it now. So I think using time on your side is, is also a good tip for our listeners.
[00:48:19] Speaker B: Yeah, I think it's really. I think that's really a really good tip. And I love that you were told a no and you didn't overreact or react in a way that was negative, and it allowed the person on the other side to think of those sweet trades or think of things that they could do to earn your business. And I think that that positive attitude is on both sides. Right. I think the hotel chain had that positive attitude to find that sweet trade, and you had that positive attitude to be gracious and be like, you know what? That's going to work for us. That's value that we've created together, that you negotiated well on behalf of the person who was entering into the contract. I think that time is an important part of every negotiation. And like you said, if you have the time to prepare and to put yourself into a situation where you can really reach and attain your aspiration point or get everything you want out of your negotiation, time has to be considered, because if you don't have a lot of time, that's part of your aspiration point. I don't have a lot of time. I need to negotiate as best I can in the time that I'm given. So that's part of the consideration in my negotiation. Right. And that's part of what's going to help both sides walk away with that win win attitude and feel good about what they did.
[00:49:37] Speaker A: What do you think is the hardest negotiation in life? Maybe your marriage, your partner that you're with or, you know, there's so many different types of negotiation, but everything is a transaction between individuals. You know, it doesn't have to have a nefarious motive. But I'm curious what you think about that.
[00:49:58] Speaker B: Yeah. First, I think that, you know, there are nefarious negotiators out there, and I think what we're saying in this whole episode is that being a nefarious negotiator doesn't set you up for long term success. But in answer to your question, who do we. What are our most difficult negotiations? I really think it's with ourselves. I think we negotiate with ourselves all day long, from the moment we wake up to the moment we go to bed. What am I going to do? How am I going to choose to spend my time? What are the trade offs of doing this versus that? There's a lot of great memes out there. Choose your hard right. There's all kinds of different hards that you're going to experience. You're going to have to choose one. And we're negotiating with ourselves whether we want to or not. And I think the principles that we've talked about remain the same. You go back to if I'm negotiating myself with myself, and I choose to approach it from a positive mindset, and I choose to do the preparation to say, what do I really want at the end of this road that I'm negotiating, right. Do I want immediate happiness? Do I want long term joy? How does that look in this particular negotiation, and how is that going to help me? I think that those are the most difficult ones, and they happen the most often, and they have the most impact on how we're going to be able to negotiate outwardly with others right from there. I definitely think our most closest relationships after that, after we negotiate ourselves, are the most important. And there are aspects of negotiation, you know, whether it's a spouse, a parent, a child, there's always a negotiation you don't have. I don't have control over what the other person thinks. Right. Or feels or reacts. However, I know them intimately, and therefore, I'm in a position to leverage those things in a very negative way or to leverage those things in a very positive way to help with a negotiation. Whether that might be, I don't know. Maybe it's buying some jewelry so that I can get a new traeger smoker. That might be what it is. I don't know. You're smiling that it probably is what it is, but it could be something like that. So I think that when we negotiate with ourselves, we're able to negotiate with those who are closest to us. Not in a. Not in a lose lose way where both people walk away unhappy, but really in a win win, sweet trades sort of way, where we can add to this world, add to the flavor, add to the variety and the diversity, and just add to the overall joy that we experience together while we're all here.
[00:52:30] Speaker A: Yeah. Guru Headley in the house. That was a really thoughtful answer.
[00:52:36] Speaker B: Well, Karen, you asked a thoughtful question, so I thought I would provide an equally thoughtful answer.
[00:52:43] Speaker A: Well, Kevin, as we come to the close of the episode, my favorite part of every episode is our game at the end. You know, your old when. So I've got one for you. Are you ready?
[00:52:58] Speaker B: I'm ready.
[00:52:58] Speaker A: Okay. You know you're old when you had a trapper keeper.
[00:53:07] Speaker B: Oh, man, that's good. I did have a trapper keeper. I love that thing. Those were the coolest things. My trapper keeper actually held my peachy folders. Remember those peachy folders with the little athletes on them? Yes. They might even had some times tables on it, too. Yes. That's a good one, Karen. That's a really good one. You know, you're old when you had. And I had a trapper keeper, so I guess I'm old. That makes sense.
[00:53:29] Speaker A: Yeah. I don't think our students nowadays have as many papers and things. You know, they're just walking around with their chromebooks and their laptops now. But, yeah, we used to have those. And they were your prized possession, you know, for the year you had the one, and it made that little velcro sound, you know, when you opened and closed it.
[00:53:50] Speaker B: Oh, that's good stuff right there. Yeah, I do. I have one for you. You ready?
[00:53:55] Speaker A: I'm ready.
[00:53:56] Speaker B: You know, you're old when you grunt to do things that you never used to grunt to do, and you actually feel good about grunting.
[00:54:07] Speaker A: Like, give me the grunt sound that you use on the regular.
[00:54:12] Speaker B: My wife and I were traveling this last week. We had a rental car. It's not the usual car. I'm used to getting in and out of. And I'm like, oh, you know, and it just afterward, we're kind of joking about it. I'm like, you know, I think, like, people who do, like, karate and martial arts, they make that noise to get that physical power. That's like, what the grunts become to do normal, everyday activities. I think, you know, your old win, you start to grunt to do a whole bunch of stuff, getting in and.
[00:54:39] Speaker A: Out of the car.
Yeah, you know, I do.
You would never hear a teenager do that with basic physical tasks. No. Or someone in their twenties.
[00:54:50] Speaker B: That.
[00:54:51] Speaker A: That is good.
[00:54:52] Speaker B: That.
[00:54:52] Speaker A: That is very good. I have one more. You know, you're old when you have a gray eyebrow. Piece of gray coming through.
[00:55:03] Speaker B: You know what? Um, that's good. I don't know that I have the gray eyebrows yet. I'm going to have to ask my wife to see if she can point them out for me. We'll have to look for them. I. I have quite a few more gray hairs than I used to have, and a lot of them are on my face. So I guess it wouldn't surprise me if I had a gray eyebrow. I guess if as a guy, I would just leave it. But maybe as a woman, you probably, you're kind of giving me the look that you definitely wouldn't leave it, that you'd take care of that thing.
[00:55:30] Speaker A: Yeah. Well, I know men that dye their eyebrows. I'm not going to out them on the podcast, but yeah, they go to a hairdresser and the hairdresser matches whatever hair they have with their eyebrows.
[00:55:46] Speaker B: Oh, my goodness. I think I have a problem because the hairdresser would be like, you got a lot of gray in your hair, so I'm going to put more gray in your eyebrows. Eyebrows be like, uh oh, we're going the wrong way on this one.
[00:55:55] Speaker A: Yeah, I think that's, that's hilarious. Well, Kevin, thanks again for coming. We can't wait to have you back.
[00:56:01] Speaker B: Awesome. It's been a great time, Karen. Appreciate you. Appreciate being on the podcast with you.
[00:56:05] Speaker A: And that brings us to the end of another episode. I hope you enjoyed the conversation as much as I did. Okay, so if you haven't already, make sure to hit that subscribe button so you never miss another episode. If you're loving what you hear. I would be incredibly grateful if you took just a moment to rate and review this show on your favorite podcast platform. It helps others discover us, and it's a great place to share your thoughts, suggestions, and ideas for future episodes. For even more exclusive content and detailed show notes, check out our website at. That's spelled out 3564 Dot. As always, a huge, huge thank you for spending time with me today during this episode. I appreciate that you tuned in. I'm going to leave you the same way I do every episode. Remember, it's not too late, you're not too old, and you're definitely not dead. Okay, until next time, friends.
