Looking to bring a deal over the line quickly?
A discount might sound like a good idea, but my guest today
would like to convince you why it’s not.
Let’s hear all about his perspective in this episode
of Closing Time.
Thanks for tuning in to Closing Time, the show for Go to Market Leaders.
I’m Val Riley, head of marketing for Unbounce and Insightly.
Today I am joined by the one and only John Barrows, CEO of JB Sales
Training and author of the book, “I want to be in sales when I Grow up.” John,
welcome to the show. Hey, Val.. Thanks for having me.
So we’ve all felt that pressure to bring a deal over the line early.
Why do you feel like offering a discount
often causes sellers to lose credibility?
Yeah.
So let me clarify on this, because I think there’s two components of the discount.
One is the one that the client asks for, and then the other
is the one that is proactively given without the client.
And I think that’s the worst one.
And by the way,. I’m not going to blame reps for this.
I’m actually blaming managers for this because inevitably what happens
is, you know, the pipe you know, pipelines decent.
But the
you know, you got to get that one extra deal in
before the end of the quarter so the team can hit their quota.
So the boss comes in and says, hey, Val,. I know you were going to close that deal
probably in the next month or so.
But you know, hey,
if they sign today, they’ll get, you know, and we’ll give them an extra discount.
And then the sales reps sends that email.
And after all the rapport they’ve
developed, all the the brand equity, if you will, the relationship
they have gets erased in a second when that email goes out.
Like, because you turn into the typical sales
rep, hey,. I know we were going to do something,
but if you close today, we’re going to give you an extra 20% off.
Psychologically, that does a bunch of things.
A, it devalues you and the relationship that you had with that person.
It cheapens the whole thing.
B, if I didn’t ask for a discount, what happens now when I ask for one?
So now I’m like, you just put me in a position
where I’m like, wait a minute, you gave me a price
that I thought was a reasonable,
you know, whatever price it was,. I didn’t ask for a discount.
Now you give me a discount without me even asking.
That means your pricing structure is a joke.
And so you’ve built in discounts into your pricing structure.
So therefore I know that if I just wait a little bit longer, it’ll, right?
And so that’s the danger of the proactive.
Now the reactive one to when somebody because that’s all they’re
always going to ask for the discount which I understand.
But unfortunately too many reps don’t leverage it the right way.
They just say sure. And they drop
their pants to get to that point so that they can get the deal done.
But if you can actually leverage discounts, and I encourage people
to remove the word discount from their vocabulary
and instead change it to creativity or flexibility,
because price shouldn’t be the main driver for your decision.
Unless you’re the low cost provider.
But if you’ve done some value, you know, building and you have a real
you know, they have an impact, the problem that has an impact to it
and your solution can solve it, then yeah, price is a factor here.
But also what’s really important to them.
For me, I do not discount at all, but I will give extra support.
I will give extra remote sessions.
I will give extra licenses to my platform so that they can help with onboarding and
reinforcement and those type of things, which are usually far more important
than the extra 10% they’re going to get off at the beginning.
You know, just to get the deal done.
So and it gets dangerous in a lot of ways.
I understand why it’s leverage, why it’s needed, but I beg people to stop
with the proactive discounting and instead use reactively,
but use it as flexibility and creativity to get away from the dollar figure.
you touched on this a little bit, but let’s let’s nail the point,
because a lot of times, reps hear time kills deals.
And it does.
I’ve seen it.
But also don’t discount to move deals along.
So let’s talk
about ways to expedite a deal or just keep it moving without a discount.
And you started to touch on some of those tactics just now.
Yeah.
I mean, again let me be clear on this one a lot.
One of the biggest questions. I get a lot of times
from reps is a hitch on how do you create urgency.
And let me be very clear on this.. You can’t.
As sales professionals we can’t create urgency.
Well I’ll take that by.
We can manufacture it with discounts. Right.
We’ll try to push people over the line.
But here’s another part of that danger is,
everybody knows the discount doesn’t go away, right?
It’s like.. So you say you use a Friday, right?
This is a typical scenario.. It’s like, oh, you know.
Yeah, John will sign it.
You know, if we get that discount rate, we’ll sign by Friday.
Fantastic. Right.
Well, then Friday comes and goes to say it’s the end of the month.
And guess what happens at the end of the month?
Your end of the month happens, but so does theirs.
So now legal and all this other stuff, like if I’m on the legal side of the house
and I have a contract that I could help
get through the process that’s going to make us money
or a contract that’s going to help save that, that’s going to cost us money.
I’m obviously going to focus on the contract is going to help us,
make us money.
So I’m going to, you know, do prioritize yours.
And so you put yourself in a position where it’s like,
yeah, if you close by the end of the month, inevitably
the person there Friday comes and they get busy.
And so Monday hits, right?
And they’re like, okay, so you know what?
We’re ready to go, John.
Just send us over the contract with that.
What are you going to say?
No, sorry.
The discount expired.
What did your profitability change over the weekend?
Like stop it. Right.
So now if you haven’t now this gets to the point of your question,
which is if you haven’t uncovered true problem and impact
and what they’re facing and understand
the impact that thing is having on their business,
if they don’t implement your solution or a solution to address it,
you’re going to be stuck in this.
Kick the can down the road.
And because now if you’re not going to if you’re going to take that discount
away from me arbitrarily, well then I’ll just wait till the end of the quarter.
Then I’ll just wait to the end of the year.
Because I don’t know that because you haven’t done
enough value generation in the discovery process to help you understand
why I need this and the impact it’s having on my business.
So I think the key is discovery, right?
Is if you are not at the end of the day when your C-level executive
stands up in the beginning of the year and says,
this is what we have to do to be successful this year.
If you cannot tie your solution to 1 or 2 of those priorities
and objectives, good luck selling anything of significance.
So this is why, instead of just selling what we have to
sell, nine times out of ten the rep says, oh cool, they need what I have.
Let me try to sell what I have.
We got to take a step back and start
aligning with the objectives of the business.
This is why the meeting prep is so important.
Like we have to understand what are some of the industry trends
that are going on out there that are impacting this organization?
What are some of their priorities for this year?
If we can find those out?
And then how does art and then the persona or the department
and the persona we’re talking to, like how does that all align
and what is the problem that they’re trying to solve?
And again, what is the impact that problem is having on their business.
And if you can find those things out then you can push
because somebody asked you on it.
Say it’s the end of the month, end to the court.
How hard can you push to get a deal done?
And my answer was it is in direct proportion to how much it is in their best
interest versus your best interest if it is in their best interest.
Because if they don’t do this, something’s going to happen.
And that’s not
just because they’re going to miss out on the discount
or they’re going to stay with their existing provider, it’s
there’s something going to happen to their business that is impactful.
Then you can and you should push as hard as you want.
But if it’s just in your best interest, because you got to close
the end of the month and the quarter of the year, you’re just a jackass sales rep.
And ain’t nothing I can do about that.
Yeah.
I mean, aligning to the goals of the company and goals of specific
members of the C-suite is certainly key.
I want to switch gears a little bit.
When you are coaching people or coaching reps or leaders
who work in particularly competitive spaces,
sometimes those can feel like a race to the bottom in terms of pricing.
So are there any specific tactics that you use or does it does
it just come back to that value creation that you’ve talked about already?
I think a lot of it has to do with yes, and.
You know, it also has to do with the criteria
they’re using to make this decision and what type of provider you are,
quite frankly, because if you’re a high value provider
versus a low cost provider, you know, obviously different structures
and different strategies associated with that.
But there’s always going to be a low cost provider, you know what I mean?
There’s always going to be.
So there’s actually these days with AI, there’s going to be something free
that you are competing with now.
So if you’re race to the bottom, if that’s the mentality, well,
then you’re already sunk
because AI can already do probably whatever your product can do,
at a certain level that I could figure out how to do for free.
So I think one of the things is helping people understand the criteria
they should be using to make a decision like this.
So here’s a tip for. I have for a lot of people, which,
is proven by just asking a simple question.
You know, we all gather information throughout the set,
you know, discovery and sales sprint qualification process.
One of the things we should be asking is, hey, what’s your decision criteria
like what criteria, objective criteria,
are you using to evaluate the different solutions here?
When you ask that question, my experience is 80% of the time
somebody gives you some vague answer,
well, we want to make sure it’s a good fit and it’s easy to use.
And it’s, you know, you know, it’s, you know, you have some experience with our.
So it’s like this. Wait a minute.
That’s what like that seems very subjective.
And is that your priority or is or those other people’s criteria is like a
the next person I’m going to talk to is that the same criteria that they’re using.
Nine times out of ten the answer is no.
So it’s a great opportunity for us to lead the charge here a little bit.
Well, the recommendations
I have for every organization and people listening to this is write down,
brainstorm all the different criteria that you want to use that that companies
tend to use to evaluate or should be using to evaluate your solution.
And don’t put things on there.
Don’t put everything on there that isn’t your benefit, right?
Put things in there that are not your benefit.
So for instance,. I put price on there three times.
I put monthly cost, total cost of ownership and ROI right.
So those are three different ways of of getting to price.
And then I’ll do stuff like, you know for instance,
for me in doing sales training, one of the things
people don’t really think about a lot is the personality of the trainer.
Right?
Training is 50/50.
It’s 50% the content and 50% of the person who delivers it.
And a lot of training companies, they’ll have a sales
rep sell the training, but then they’ll have a trainer deliver it.
And so the client will buy into the sales rep selling it,
but then they’ll get the trainer, and the trainer is a dud or doesn’t
resonate with their team at all.. And they don’t even think about that.
So I’ll put that on the list.
So brainstorm literally everything you can think of,
you know, get a list of maybe ten criteria of what people should use
or do use to evaluate you and other competitors.
Then, when the client gives you a vague answer to how you know
what criteria are you using, take the opportunity a little.
Challenge yourself here to say, hey, you know, Val, it’s cool.
I appreciate that.
One of the things though, it’s what I find is a lot of clients.
We’ve done a ton of research over the years and clients understand,
and here’s typically the criteria that they do use and kind of walk them through.
Like here’s some hidden stuff that you might not think about right?
So could you do me a favor and just walk through this with me
and just kind of force rank these 1 to 10?
What’s most important to you?
What’s least important to you when making this decision
and getting to your point on price?
If price is number one and you are not the low
cost provider, then lean into it.
Actually, I would actually walk away.
I would use
that as a disqualify or faster than ever, because I don’t want to waste my time
running to the bottom with a client who is looking to run to the bottom,
and it gives you an opportunity to go back from an objection handling standpoint.
So if they say one, I usually say, you know what, Val?
If that’s truly the case, if price like monthly cost, not total
cost of ownership, not ROI, but monthly cost is literally
your number one criteria for making this decision.
We can make this conversation very short.
We’re not the cheapest and I use the word cheap a lot.
We are not the cheapest, nor do I ever want to be.
So if that’s the case, why don’t you go talk to XYZ, blah blah blah.
But if it isn’t number one, if it’s two, three, four or 5 or 6,
now you have a chance.
Because later on when they say you’re too expensive
or it’s more than I was expecting, be like, okay, well, I appreciate that.
But you had told me your number one priority was this.
Your number two priority was that.
And that’s what I built this program around.
So I understand cost is an issue, but is it more important than those other two.
And I’m not saying it handles the objection.
It just gives you a conversation point to then unpack
a little bit more about what’s really important to them.
I’m so glad you hit on total cost of ownership.
Because specifically coming from the CRM space,
you know there are a lot of low cost providers out there.
But when you start looking at the total cost of ownership, that monthly payment
just diminishes in importance.. So it’s huge.
So let’s talk about that.
So you’re a great salesperson.
You haven’t discounted it.
Everything’s going great.
And you’re a champion.
Or the person you’re working with on
the other side is everything’s going swimmingly.
And then their procurement person comes in at the 11th hour and says, hey,
we want a discount.
So, you know, that procurement person that that could be a wild card.
It always is.
And it’s always, you know, good, good cop, bad cop scenario, right?
You’re champions. The good cop, the pro commits the bad cop.
And there’s nothing I can do about it.
Now, first of all, I think we need to define what a champion is.
To many, that’s another way overused word in sales.
People think they have a champion just because somebody is nice to them.
Look, you don’t
there’s not a specific definition
of every company has a different definition of a champion.
But I encourage everybody listening to this to actually define it.
For me, a champion is somebody who’s actually at the table
sitting, you know, when the door shuts to make the decision there, they’re there
and they can fight for you and they break rules.
They get things done for you.
Their actions show you they’re a champion, not what they tell you.
So first and foremost, you got and if you have one of those,
then when they kick you over to to procurement, you can just straight up
ask them, I’ve done this before where I’ve been like, hey, look,
you and I have gone through this.
I’m really excited to be working with you at this point.
You and I both know what procurements job is.
They’re going to kick my teeth in here.
So I’m going to ask you.
I do have a walk away line,
and there is a line that once it goes past that line, I just walk away.
So let me ask if it gets to that line, can I.
Can I pull you back in?
Can I pull you back in? And will you help me make this happen?
Or even better, could you just go fight that fight for me?
Right.
Because you know them better than I do, you know?
And look, if I have to inflate my prices,. I’ve done this before where I’ve had such
a strong champion, where I’ve asked them, hey, is procurements like, is it 10%?
Is it 20% that they’re metric by like, what’s that number?
And they’ll be like, yeah, it’s like ten, 15%.
I’ll be like, do you mind if I just actually inflate my price by 10% here?
So everybody wins.
You get the training that you want,. I get the price that I want.
I procurement gets the 10% off that they want I can we just do that.
That’s dangerous
because you have to make sure you have a real champion
because otherwise they’re going to use it against you.
So a leverage your champion be you know, try to get involved
procurement involved earlier.
That’s actually a give get for me.
And like so for instance say somebody ask for an NDA early on because whatever
that’s a that’s a indicator to for me that they are procurement heavy
which means. I need to get legal involved early.
So I’ll say to them, hey Val, you know, happy to sign off on that NDA.
Sounds like there’s
a lot of contractual stuff here that, you know, you guys
probably have to go through to get this done.
Would it make sense
to bring procurement in early so they feel part of this process?
Because when you can
bring procurement in early, they actually become your advocate.
If they if they’re late, they’re going to be an adversary.
Because nine times out of ten what happens is the champion does their thing.
They go through the process,
and then they literally just dump it on procurements desk and say, get this done.
And with no context or no involvement, procurement is going to do what
procurement does.
They’re going to cross every t-dot, every cut, every.
You know what I mean?
But their job for for everybody listening, it’s not to get the best price.
Their job is to get the biggest, most value.
It’s not
because if they take the price down to the point
where you have to take some things out because, you know, to get to that level
and then the product doesn’t do or the service doesn’t do what they expected it
to do because of that, procurement is actually on the hook for that.
So that’s why it’s important to not just like just say, okay, now
the last part of this is there is something called nibbling,
which is procurement.
They will get you all the way to the end.
Okay.
And then right at the end they’re going to say something like,
you know, so you’re going to close by Friday.
It’s the end of the month.. You know, it’s your.
Yes. Sweet.
You’ve given them a three year contract
at a deep discount to get this all in the door.
And then right at the end they’re going to just ask for something
or they’re going to ask for something seemingly small,
but they’re going to leverage the fact that you’ve spent so much time on this.
So it’ll be like, hey, Val, you know what?
Yep, we’re ready to get going here.
Just do me a favor.
Could you change the contract from a three year to a one year
and send it over to you, and you will sign it today?
Now, mind you, that three year contract was based on a heavy discount.
And most reps, quite frankly, they’re going to fold at that point.
But when that happens, when you know you’re the preferred vendor,
you know they you’re champions on your side
and they’ve kind of mentally committed to going with you.
And then procurement tries to pull that up.
You just say no.
You just straight up say no. I’ll be like, nope.
Here’s and by the way, that’s important to document your your discount process
here to say, hey, we started here, we went here, we went here, we went here.
This is where we are.
You agreed to it at this point it’s three years or bust and that’s scary to do.
But 95% of the time they’ll fold.
If you are the preferred vendor.
You know, I’ve seen that tactic work with getting procurement involved.
Even, like, emailing the person personally, calling them by name,
greeting them, you know, bringing them into the fold.
Really can make that person more of an advocate for you, rather
than just that last stop before we get a signed contract.
So some really good tips there.
one more point on that.
There’s a big difference, people.
Everybody knows the decision process.
You got to ask about the procurement process.
The procurement process is not the decision process.
The decision process who the executives are involved
and who’s going to ultimately sign off on this.
Like the executive sign off.
But that has nothing to do with the legalese.
That has nothing to do with when you get to that point.
So as much as we all ask, hey, what’s the decision process here and who’s involved?
Hey, what’s the procurement process like?
How hard is it to get through?
How long does it tend to take?
When was the last time you made an investment in a software solution
like ours, and what did that look like once we agreed that, right.
Because if you don’t understand that,
you will forecast something because somebody will tell you, yes,
we’re going to make a decision by the end of the month.
And so you will forecast it for the end of the month.
And they will tell you.
Yep, we decided to go with you.
Now go talk to procurement.
Three weeks later.
Three months later you’re in procurement hell yelling over,
you know, gross negligence over negligence and the whole thing blows up.
Yeah.
Does that mean sometimes procurement
just isn’t used to seeing something with quite this many zeros in it.
You know.
So. And that, might kick off a policy that you weren’t aware of that
you know, that or a procedure that has to be added into the process.
And there goes your end of the month close, right.
There it goes. Nope.
So let’s talk about how much the average sales rep
needs to understand the details of what goes into a company’s
pricing strategy, because on the one hand,. I feel like our sales reps are
they’re working in the CRM, they’re bringing in leads they’re talking
to, they’re having their pipeline reviews.
They’re working deals, they’re working leads.
They’ve got so much on their plates.
how much do they need to understand of the high level pricing strategy?
Or do we just need to keep them at like, you know, a
10,000ft level and say, hey, just go ahead and execute.
I think as it relates to working with customers, I don’t.
I think we can keep them at the pseudo 10,000.
They have to have something to justify why their price is the price.
Right?
Because the answer is, well, it’s
none of your business or whatever is probably not going to go to go too far.
Although that should be the answer.
None of your business like that’s our pricing structure.
But again, your pricing structure,
if you have it like this and then you offer a massive discount,
you’ve just eroded all credibility on that one.
So that’s why I do think, it’s important,
but I actually look at it more from a business acumen standpoint.
I think CFOs should like CFOs
are the ones we, as sales reps, have the hardest time dealing with.
Okay, because they beat the crap out of us.
They’re better negotiators than us.. They’re super objective.
They’re not subjective.
There’s no relationships usually. Right.
So if I don’t understand
why more CFOs of organizations don’t sit with their sales teams
and educate them on finance, on a P&L, on
CapEx versus opex, on why
certain SAP because you and I like the SaaS right.
It costs
Salesforce $0 to give me another license
that they’re going to charge me $15,000 for, you know what I mean?
Like, and I look at it, I’m like, you know, back when I used to use
them, I’d be like, it doesn’t cost you any more.
Why is it so I could beat up a rep
who has no confidence in understanding that because it’s SaaS.
So it’s like there’s no extra cost of you turning that license on.
So I’m going to fold because I have no confidence
on where this pricing is or why is price.
And I just know everybody always ask for a discount.
I know we always give discounts.
So that’s why I’m always going to drop my pants on that.
But if a CFO educates me on, hey, here’s our here’s what we’re investing in
and here’s, hey, have you seen our our recent annual report?
Let me show you the investments we’re making to do this.
And if we didn’t do that, we wouldn’t be able to do our roadmap of things here.
So if you just have that as just again,
I think the biggest thing that any sales rep can invest in, right
now, as far as tactics and tips and those type of things,
if they want to stay relevant in today’s world of AI is business
acumen is just understanding business so they can have the conversation
and not just immediately like, as soon as the finance conversation comes
up, throw their hands up in the air
and either bring in reinforcements for their manager, which devalues
them, or offers a massive discount just for no reason at all.
I mean, it is so easy to get a discount from from people right now.
It is insane.
Like it’s insane.
All you have to do is wait.
All you have to do is ask.
Sometimes you don’t even have to ask.
I told you this product,. I will give it to you.
So I think it’s more on the business acumen side than it is a tactic side.
But I think it’s critically important for CFOs to help educate
also sales professionals on how to have the conversation, at least.
All right.
Feels like it’s also a good time to say.
If you wanted to add
on a license of Insightly CRM in cost you much less than Salesforce, right?
Well, see, that’s my point, right?
It’s like Salesforce.
Like what the what am I getting charged for here?
Insightly okay, that makes sense.
But I still need to understand
a little bit right of of where this is and why it is right.
Goes back to the core cost of ownership,. ROI and all those different things.
John, we’re going to stop there.
You’ve given us so much to chew on.. Thank you very much.
Where can folks find you
if they want to learn more about your work or, or follow your, social media?
Yeah, I appreciate it.
So LinkedIn is always kind of probably the most the easiest way to find me.
I will say it’s a humble brag, but it’s a pain in the like.
I’ve reached the 30,000 limit, so I can’t accept any more connections.
But you can follow me and everything else.
But if you go to my website Jbarrows.com, that’s
where you can get all the other social channels.
Actually, Instagram is where I do a ton of free stuff.
So John M as in Michael Barrows, that’s my handle there.
And if anybody has any questions, they can hit me up on Instagram
and I’ll typically get right back to them, like,
you know, DM or something like that.. I’ll get right back to them.
But yeah, there’s all sorts of fun stuff you can newsletter
or free content on YouTube, everything else.
So Awesome.
I mean, feels like hitting that 30,000 limit.
That’s, you know, certainly an accomplishment.
So congrats.
I’ve been at the game a little bit longer than most, like I think I was
member 32,143 on LinkedIn.
So I was like a super or like 2003 is when I got on the platform.
So, you know, 400,000 followers.
I think it’s just more longevity than anything else.
Gotcha. All right. Well, thanks for joining us.
Really appreciate your time.
awesome, thanks, Val, I appreciate it.
Thanks to all of you for tuning in to Closing Time.
Remember, if you sign up for the Closing Time
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Click the link in the show notes right now and you’ll find clips
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