Our guest today is a long-time associate of mine, Todd Caponi, author of The Transparency Sale: How Unexpected Honesty and Understanding the Buying Brain Can Transform Your Results. A self-proclaimed sales nerd, Caponi is passionate and deeply knowledgeable about the behavioral science behind the buying brain, and in this episode we delve into the concept of transparent negotiation. We talk about creating a foundational structure for sales leaders to scale revenue capacity while building trust and honestly aligned win-win situations. He is a huge proponent for ditching the complex (and often underhanded) sales techniques that give the industry such a bad rap, and talks us through why transparency is the single best way to speeds sale cycles and improve win rates. This creates a collaborative rather than confrontational situation in your sales pursuit and actually helps you save time by losing the deals you're going to lose anyway. If you have literally any questions about sales, Caponi's is the brain to pick, and today we get some incredible advice and wisdom from, literally, one of the top sales leaders in the industry today. Press play now to listen in on this exceptional conversation!
Key Points From This Episode:
“Transparency sells better than perfection.” — @tcaponi [0:03:58]
“I'm reading the subject line plus the first ten words, and deciding, is this here to help me or to sell me? If it's here to sell me, sorry, there's just not enough time in the day.” — @tcaponi [0:23:48]
“Why are we eroding trust at the goal line, instead of building it through.” — @tcaponi [0:27:16]
Links Mentioned in Today’s Episode:
Speaker 0 00:00:01 Coming to you from Orlando, Florida, Orlando, Florida, and streaming around the world around the world. You're not tuned in to the sales samurai podcast. The only B2B sales podcast, providing unfiltered unapologetic views and tactics directly from the sales trenches. Here's your host, Sam Capra.
Speaker 1 00:00:30 All right, well, welcome to another episode of the sales samurai podcast on today's show, we're going to be discussing effective negotiation techniques for sales professionals, with the one and only Todd caponi Todd, welcome to the show, man. It
Speaker 2 00:00:45 Is good to see you. My brother spent a while. I
Speaker 1 00:00:47 Was just thinking about this. I know we were talking offline, you and I got a chance to know each other. It's hard to believe it's been almost 10 years ago and exact it's 10 here.
Speaker 2 00:00:56 It's amazing. Yeah, I got there in late 2010, early 2011. So yeah, amazing.
Speaker 1 00:01:02 Wow. I still think fondly of those days, but when I think of a I'm thinking like it was like a year or two ago, I don't know what my COVID brain has me on disrupt. That
Speaker 2 00:01:11 Sounds about right.
Speaker 1 00:01:12 That's awesome. Oh, you know, obviously, Todd, you know, one of the things that I've gotten to know from you through the training back then, but you know, in a follow-up book, obviously the transparency sale, you know, I know that's what you've been doing since I know you've been doing a ton of things. I know you have an upcoming book sometime early part of 2022, the transparency sales leader, which I'm really excited about. Cause that's near and dear to my heart. Tell the listeners a little bit about yourself, kind of what you've been up to, all that kind of good stuff.
Speaker 2 00:01:38 Well, yeah, I think the story of the book, the transparency sale, you know, it started, I was the chief revenue officer of a company here in Chicago called power reviews. So after exact target IPO, and then we sold it to Salesforce for a little under 3 billion, which sounds crazy. It actually sounds small compared to the exits now, which is really weird. But I went on to be the CRO of power reviews. And we were in the space of helping retailers and brands collect and display ratings and reviews on their websites, right? So you're buying a pair of Crocs or a sweater on vineyard vines. You're looking at the product, you look at the reviews right under it, and those influence your purchase. And that was us. That was the engine behind the collect and display for them and a thousand other retailers. What happened though, which is only could happen to a nerd like me is we did a research study with Northwestern university that looked at all right, when a consumer is buying something online and on a website's acting as a salesperson, what do people do?
Speaker 2 00:02:41 Well, it turns out there was three data points, two of which changed my life. But the first one was that we all read reviews today. Didn't change my life. We know that if you're buying something you haven't bought before, that's a medium to high consideration. You're probably reading reviews first because we all do that. But the two that blew my mind and started me on this spiral of like a lunatic quitting my job and writing a book was that 85% of us skip the five-star reviews and go right to the negatives. First, I thought, all right, that's again. When a website is acting as a salesperson, why do we skip the fives and go right to the negatives? And the third data point? The second one that changed my life was that when a product has an average review score between a four, two and a four or five, that's optimal for purchase conversion, meaning that a product on a website, people bought it, they came back and they say, this product sucks.
Speaker 2 00:03:36 And that helped the product sell more like having negatives, right under the own product on its own website, help the product sell more than a product that has nothing but perfect five star reviews. And I'm like, all right, that happens when a website is acting as a salesperson. What about when a human is acting as a salesperson? And I started digging into the behavioral science and the research, and I discovered really quickly that transparency sells better than perfection. That when we go into an engagement and we disarm the buying brain by saying, Hey, listen, before we get too deep into this, here's something you might not like, here's something, maybe a competitor does something better than us. Here's a risk that we see in organizations like yours, that we should talk about upfront. Here's the price range around what the investment is going to look like.
Speaker 2 00:04:20 If we're way off. Let's talk about that. Now, embracing that for two to four or five upfront speed sales cycles improves win rates, partially because you're working deals, you should be working, but even more importantly, you lose the deals you're going to lose anyway, but faster, the results are magic. I decided I wanted to get the ideas out there. I wrote a book that I thought had a decent shot that it would suck. Cause I wasn't a writer. It's taken a new life. You're asking me what I'm up to now every week I'm speaking and teaching workshops on transparency on negotiation and presentations. And then the manuscript is due last week. Don't tell anybody for the transparent sales leader, which is taking these concepts and then creating a foundational structure for sales leaders to scale revenue capacity.
Speaker 1 00:05:13 That's awesome, man. You know, one of the things that I always love talking to people about what God, and I know we were just talking about it, you're a sales door. Like you love the historical aspects of sales, like the origins. So I always like to ask people like, first, what got you into sales? Like, oh, why sales? Like you have probably had a lot of other things you could have been doing. Just curious why sales for you?
Speaker 2 00:05:33 So, you know, my story of how I got into sales is like a lot of people it's partially accidental, but it was having a model in my father who did it for 50 years had such great relationships. It was the best man at a customer's wedding, right? Like he always came home with a smile on his face. He loved doing what he was doing and he was selling fricking boxes. So like corrugated moving and then, you know, your cereal boxes and not like that kind of stuff. So like Kellogg's was one of his big customers, right? Selling like millions of dollars
Speaker 1 00:06:05 Of boxes. He was selling something really sexy.
Speaker 2 00:06:08 Exactly. And he loved it. Our garage is always filled with boxes. Like if you ever needed moving boxes, we were the people that call, but that was the foundation like that for me, made it okay to be in sales. But like when I went through college and everything in sales, it was like sounded kind of gross. Like I wanted to get into marketing, like advertising. That would be cool. And then I graduated and I was like, you know what, I'm going to try the sales route. And I got into it and I found a passion for it. And then being the nerd that I am for the behavioral science, I started like figuring out, Hey, you know what? I can use this stuff for good, not evil and started like building a career around it. And it's like, we talked about before I literally on the weekends, I read books on sales that are a hundred to 120 years old. Cause like that's, I just find it fascinating. So it's become a real, a life's work and a life's passion for me.
Speaker 1 00:07:00 That's awesome, man. Hey, what was like very first true sales job? Like what was it just out of curiosity?
Speaker 2 00:07:06 Well, I sold advertising for the Indiana daily student at Indiana university. So, you know, go into the liquor stores and the restaurants and all that, trying to sell advertising space and it just, it paid the bills, but it was a sales job. Right. And it's amazing because when I graduated, nobody had sales experience and I, I got every offer I walked into cause I actually sold something. But yeah, selling advertising for a school newspaper.
Speaker 1 00:07:35 That's awesome, man. Yeah. It's always funny to your point I've yet. And I haven't done very many pods. I've done 30. This will be the 30th episode once it's released, but I've talked to 30 people now and obviously I have a network of salespeople. I've never met someone that said, Hey, when I was six years old, I always wanted to be a salesperson. Like I've never met it. It's always, my dad got me into it, a friend of a friend, like, is that wrong? Or right. Like, should there be more focus? I don't know.
Speaker 2 00:08:02 Well, that's the thing, right? So I have this just for fun sales history podcasts. One of the episodes is about the age old argument about whether universities should teach sales and whether it should be a focus. Right. And you would think on the outset that, well, first of all, universities not only had sales taught in the early 19 hundreds, but high schools did the Boston public schools, 11 Boston public schools taught sales. Right. And you know why? Because back then sales was trusted. It was admired. It was something that like it was respected. And as a result to your point, people wanted to go into it. You can make good money in it. And when you looked at the most successful people at the time, you know, people like Charles Schwab or JP Morgan, those guys, their foundation was sales. Like everybody knew they were sales people and now they're billionaires.
Speaker 2 00:08:58 And I want to be like that. Right. And so when you looked at today, we went through a valley, right? Where there was tons of them. And then world war one came and there was the depression and all of a sudden sales was not what people wanted to do. It went away, not in the universities in the 1970s. It came back very slowly. And today, you know, there's a couple hundred schools that have it, not only as a major, but they certainly have curriculum around it to your question, should it? Or shouldn't it, the core always comes back to supply and demand that if you're going into a university and you're looking at your electives and you're like sales, or I can take frickin underwater, basket Weaver or something, you know, like, I don't know. I just, I don't, I'm not convinced that there's still enough demand coming out of high schools that tell people that, gosh, this is a career I should get into.
Speaker 2 00:09:53 Now. I'm hoping that it is transparency takes heart. And that we start to get sales back to a respected and admired profession. That'll help combined with the fact that as of may, ZipRecruiter is reporting that there are over 700,000 open sales roles right now. And that's not real estate. That's not retail, that's not car sales. That's like B2B salespeople, 700,000. So you've got this huge demand. You've got very little supply. You've got a great opportunity to make money and be successful in your careers. If we can match that up with it being a respected profession that people go, oh, you're in sales and not respond. Oh gross. But I think that that's where you can start to combine these things and start to see a lot of this back.
Speaker 1 00:10:41 That's awesome. Yeah. You know, it's funny because as you're talking about that, I used to think that all the time I knew Purdue used to have a program. Like I was thinking through, I was trying to really, and I have a recent guests. He's actually a professor of sales at the university of Portland, if I'm not mistaken. So I'm actually hearing it coming more and more full circle. But to your point, like every school offers marketing, like that's just a foregone conclusion. So I agree with you. I think there's some aspects like the profession has to be cleaned up where you're talking about who are to be in one of those professions hen you actually consider that being a long-term career path for you,
Speaker 2 00:11:16 You know, back in the early 19 hundreds, there was a relevance gap too. So you'd go to school, you learn sales and then you get your first day on the job and they'd be like, what have they been teaching you? Right. And so I think that that's one of the really powerful things that like, as you talked about that professor from university of Portland and as I've talked to different professors, like I've spent some time with the university of Texas, one of their professors on it. I mean, they create labs, they've got people cold calling. They're teaching you how to use Salesforce and slack and gong. And like it's, it's really impressive. The investments that these universities are trying to make so that it becomes relevant. And the goal of a university education is to prepare you for post-college. So you get a job and you make money and off you go. And I think they're getting a lot closer, which is great.
Speaker 1 00:12:06 Awesome. Yeah. I didn't know. It was that granular to be quite candid with you. I thought it was really more philosophical methodology, but if they're actually giving you real world training, that's even better in today's new landscape, if you will. So I was going to ask you, I love this because you've been doing this a long while. I was thinking back, I've been now doing it for two decades, B2B sales. I don't know how successfully I've been doing it, but I have been doing it like in your tenure. Tell me what you think from a sales perspective has gotten better. And for the worst, like from a sales perspective, what you've seen is just, Hey, we've made a lot of strides in the right direction, but on the vice versa, this is actually where it's kind of gone down the wrong track. I'm just curious what your thoughts are on that topic.
Speaker 2 00:12:48 Yeah. I'm wondering whether I should start with the end or not because I've got a whole rant about where we've gone wrong. And it starts with that idea of sales being trusted, admired, and respected. So if we go back to 1916, there was something called the world sales Congress 105 years ago in Detroit, 3000 sales professionals attend this thing. You know who the keynote was? So 1916, president Woodrow Wilson. So imagine a sales conference today and at the sales conference like outbound or whatever it is. And like the fricking presidents, the keynote, you couldn't imagine that, but 105 years ago. Absolutely. It was because at the time, like I talked about sales was trusted, admired, respected, but the country was looking at salespeople as either the success or failure of us as a country. Because during the progressive era of the industrial revolution, you've got all kinds of manufacturing happening.
Speaker 2 00:13:47 You've got a world war that's kicking off in Europe right now. So we've got an opportunity to take advantage of some stuff. So salespeople selling the right products to the right companies at the right time at the right prices, uplifts the whole country. And when the country raises, we've got a strong economy and we can start to create the powerhouse that the United States became. Now, what happens? Well, if you imagine back then every single sale was face-to-face like, you could send a catalog, like Tiffany's had a catalog in the 1840s. Right. But your sales had to be, I need to come to you. I'm going to show you stuff. We're going to have a conversation. We're going to shake hands. Maybe we have a martini and then you're either going to buy or you're not, it was always face to face. Now over time we were given incredible gifts, like think about the telephone, what an incredible gift that is to sales.
Speaker 2 00:14:46 The fact that instead of me having to even leave my office or wherever it is, I could just there and make calls like what an incredible gift salespeople ruined it. Right. They, they ruined it by all of a sudden going, Hey, how do we scale this crap? Right? Like how do we pound the crap out of people when they're eating dinner and do robo calls and like, like how do we take this and ruin it? And so it got to the point where technologies had to be created to prevent salespeople from overselling, right? Like do not call registries, which by the way, had like 22 million phone numbers on it. Last time I heard some crazy phone and those people aren't on there because they don't want a call from their buddies. They don't want a call from salespeople. That's why the do not call registry exists.
Speaker 2 00:15:32 That's the government. And getting involved like caller ID being developed was developed because of salespeople. Right? So like salespeople ruin that technology fast forward to email, same thing. What happened? We were given this incredible gift or I could send you a note, hit, send, and it shows up in your inbox instantly, like what a great gift for salespeople. And we ruined it by scaling again, right? That we decided that we're going to pound people with emails and just pound them and pound them with generic stuff. That's going to jam up their inbox to the point where technologies again, had to be created to prevent salespeople with a spam functionality and like you, and I know from exact target, IP blacklists and all that. And then again, that didn't work. So the government had to get involved again and they created the canned spam act of 2003 or 2005, eight.
Speaker 2 00:16:20 Like the government had to get involved to prevent salespeople. Now you fast forward to like LinkedIn incredible gift. Right? I can see your resume. I can see you. I can hyper target. I can see who you're connected to. I can see what you write about and what you're interested in, how amazing. And like you've looked at my LinkedIn connection request and you're like, we're ruining it again. Video, video, credible opportunity for us. And I get these video, email prospecting emails that are, Hey, you I'm really impressed by what you're doing. I'm like, come on, like, you've got this incredible gift. So when I say like, where we've gone wrong, I think at its core, we've got to remember that sales was trusted, respected, and admired at a time where it was. Face-to-face where we had to look people in the eyes and be human beings with one another and technology with all the great gifts that come along with it.
Speaker 2 00:17:15 We've ruined it by forgetting this idea that it's our human to human connection. That creates a relationship where customers buy, stay, buy more and advocate. And as I look at these charts that come out that show the new tech landscape of sales, the chart is so such an eye chart. There's so many tiny little icons on it that I just think, you know, what if the word scale comes into your head, stop it. That like technology, like let's use it for all. It's good, but stop getting blinded by this idea that we scale stuff. Because I think that that ruins the profession. It makes it harder for us to sell not easier. And like you might get short-term spikes, but longterm getting customers to stay, buy more and advocate becomes a real problem when we overuse technology and we under-use our humanness. Right. That's where I think the difference is in the last hundred, five years.
Speaker 2 00:18:12 So on the other side, when I think about like what we've done, right? And like where we're going in the right direction, you know, I spend time on LinkedIn and I scroll and I, I read the stuff that people post on there and you know, about 98.9% of it is meant to help people and to make the sales profession better. It's rare that I see something on there that I'm like, dude, somebody's got to delete that. Like I love the fact that there's community and there's people that are helping people. I know they're doing it selfishly in the name of personal branding. That's cool. But the idea that we're out there and if you're on LinkedIn on a regular basis, you're probably a better sales person. And you're probably doing things for the most part the right way. If you're really, truly spending the time to absorb and learn. I don't know if that, like when I started in sales in the 1990s, there was no way for me to learn like that. I would just learn from others. And if that other person sucked, then I suck. Right. You know, I think today there's just so many opportunities for us to get the best of and make the profession better as a result. And I think platforms like LinkedIn helped that. So that's one of the things I look at and go, LinkedIn can be annoying, but I think overall it's raised the profession
Speaker 1 00:19:31 Without a doubt. You know, it's funny as you're having that dialogue around the negative and the positive, I hear a very similar story throughout, right? I've heard that technology is good. It's allowed us to drive efficiency to your point scale, whatever you want to call it to most that's positive, right? Where I can only make 30 face-to-face calls a day or 10 calls a day. I can make 484 touches through email phone and face-to-face right. But the other side of that is there's just so much noise. Like it's all there is there's noise. I'm getting hit with email phone call now, chat, WhatsApp, LinkedIn. And the people are just being desensitized to all this noise that we can't keep up. Right. But yet the quotas keep escalating the deal size keeps shrinking. The average sales cycle keeps LinkedIn and the whole nine yards. It's kind of a vicious cycle, right? Todd, to some degree.
Speaker 2 00:20:23 Yeah. I mean, I think about my last role as a CRO, I think it's important for people to understand that, you know, I was getting a hundred to 150 emails per day. I was in 30 to 35 meetings per week. Now when I think about my phone, like, sorry, I just, I could not guide my day via interruptions. So I never answered a cold call. And that's, that's me. Sorry. But I think if we truly think about it from an empathetic perspective, that if you're calling higher and organizations, that's probably the case that nobody's sitting there going, I got 4 million things on my to-do list, but I'm going to answer this random call from somebody. I don't like, that's not going to happen. When I look at my inbox, a hundred to 150 emails a day, and a chunk of those are cold outreach right now, the thing that stood out to me is our sales reps optimizing for the first 10 words of those emails.
Speaker 2 00:21:18 Like we used to teach at exact target. We publish blog posts about how you optimize the subject line. Right. Nobody's looking at the subject line from like, at least I did, I would check my email kind of like I would check the, like an instant lottery ticket. Somebody would send me. Right. But like, I it's probably a loser, but I got to check because if it's something important, like something from a customer, from a prospect, from my team and investor or board member, like I gotta be on top of that. So I'm always checking, but it's just amazing to me that if you are a unknown potential vendor and you think about my priorities on during the day as I'm checking my inbox, right? My priorities, again, my team, my customers, my prospects, my investors, my board, my peers, my coworkers, my recruits, all the way down to, you know, known potential vendors, partners, that sort of thing.
Speaker 2 00:22:07 Unknown potential vendor on my priority list is number 14. Now, if you start an email with the words, I wanted to guess where you stay number 14, right? Like you haven't moved up. Like you could be saying, I wanted to give you a million dollars. I would never get to it. Cause I got to delete those because I just, there's not enough time in the day. And so for anybody who's listening, that's thinking about like, how do I truly clinically empathize with an executive that I'm trying to reach out to be a giver. Number one, number two, get rid of the eyes and weeds from the beginning of your emails. That combination of, instead of I wanted to, I wanted to see if you had 15 minutes available. I wanted to see if you read the last email that I sent you. I wanted to, I want to, I, I don't care what you wanted to, sorry, love you.
Speaker 2 00:22:53 But I don't instead, can you flip it and go, Hey, here's something that'll help you with what your priorities probably are. Your priorities are probably your team, your customers, your prospects, right. You know, here's the salary study of what STRs are making in your market. Here's a board deck template that potentially will help you develop your board meeting. Cause I, I understand you probably just finished your quarter, right? Give, be a giver, contribute. Make me smarter about my own business. Help me and guess what, if you do that effectively and I see you're calling on the caller ID, I might pick up that cold call. And so like, that's just a perspective that I have from the poundings right. Is if you're an executive, you just, you can't guide your day by random outreaches. It's impossible. And if you're filling an inbox with, I wanted to use you're at number 14 and you're staying at number 14, I'm reading the subject line.
Speaker 2 00:23:50 Plus the first 10 words and deciding is this here to help me? Or is it here to sell me? And if it's here to sell me, sorry, I just, there's not enough time in the deck. And I think that mindset shift for anybody who's listening, hopefully at least helps build relationships. There's a guy, Josh Braun, I think who always uses the analogy that you would never go to a bank and make a withdrawal before you've ever made a deposit. Yet we do it in sales all the time, right? Like can we switch that? Make deposits give, and then when you go to make the withdrawal, it's more likely there's going to be something there to withdraw from.
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Speaker 1 00:25:03 That's a good call. You know, it's funny. It makes me think of the old Gary V book, Gary Vaynerchuk, jab, jab, jab, right hook. Right? Give, give, give. Before you go for the knockout punch, it's all a part of that. Hey, I want to transition because this is something that I think reps, sales professionals, wherever you want to call them is top of mind for them. So I see in today's landscape because we talked about this, right? And I think you, of all people talk, you've seen the landscape. I was just listening to a podcast the other day, like the number of touches that takes to get to someone, the average deal sizes, the close rates, all of these things are actually not going the right way. They're going, they're going diff they're going down to, to some degree. And you know, negotiation is a part of that, right? The natural evolution of sales in that process is negotiation, which I actually want to start with that because I want to get your take on this. Do you actually think negotiation is a normal part of the sales pro? Like, is that normal? Is that a red flag that something didn't happen earlier in the sales pro? Like what is your thoughts on just the negotiation component of the sales cycle?
Speaker 2 00:26:05 So here's the thing, you know, back at exact target. I taught everybody negotiation and now like not a week goes by where I'm not doing a workshop for client on transparent negotiating. And here's where it started for me because of my personality. I guess maybe that's where it started. I just always thought it was weird that we require a different personality to negotiate than we do to sell. Right? Like we build a relationship with a customer's trust. Like, oh, I love you. And you love me. Oh, great. We've got a good partnership here. And then the customer says, yeah, I'm going to buy from you. And we respond subconsciously with all right, cool. I'm going to start lying to you now. I'm actually, I read a book from a former FBI hostage negotiator. I'm going to use those techniques on you. Like I'm gonna use word games and tricks, and I'm going to look for eye twitches like that to me, like by the way that book never split, the difference is it's a great book.
Speaker 2 00:26:56 I freaking love it. Like Chris boss, don't send your head, spin after me. But the point is we are not negotiating the release of hostages for a bank heist. And when we get done with the negotiation, we need to have a relationship with this person, right? They're not going to get shot in the parking lot or taken the jail. Right. That always drove me crazy as why are we an eroding trust at the goal line instead of building it through. And so this concept of transparent negotiation was born exit. That way, when I was walking into, it was a four and a half million dollar deal negotiation back in 2008, I walked in, they had the whole fricking procurement team there and I was just like, ah, crap. Like I I'm going to get crushed. And I was the VP of sales. I had my rep there. We weren't well prepped. And so I just decided I'm going to throw my cards face up on the table and see what happens because I got nothing to lose and I'm screwed either way. And so here's the concept for everybody. Like it's super easy. Like, I don't know if you remember this. It was known as Todd Capone. He's famous 20 minute negotiation skills class at exact target because negotiation shouldn't be this hard. We're negotiating SAS contracts, not the release of bank heist hostages.
Speaker 1 00:28:09 I'm going to pause you there for a second, but isn't that part of the problem with sales don't we always over-complicate things to the nth degree. Like we make things a lot more difficult than they have to be. Is that fair to say? Or my off,
Speaker 2 00:28:20 Well, that's everything like as a sales leader, it just always bothered me that every time I bring in an external trainer, it was like a two and a half day class. And I'm like, if it takes two and a half days to teach this crap, I'm going to be hiring and firing. And two months from now, 80% of my team will have gone through this program two months from then it will be 60. And at some point we'll have convoluted and I'm going to have to, like, this is stupid. And so everything that I've tried to design in the book and in my workshops is meant to be, if you can't learn it in 20 minutes, you're probably never going to use it. And like that's at its core. And so like the negotiation thing here it is, I walked in and the customer asks for a discount, right?
Speaker 2 00:29:02 Like that's what they did in this instance. And basically all we did is to say, Hey, listen, as an organization, as a company, can I just share with you the four things that matter to us, if there's four things that drive our business. And I think they're going to be really useful in this conversation. The first one is volume. The more stuff you buy from us, more product service technology licenses, the better it is for us. And the more we're willing to pay you in the form of a discount for that number two, the timing of cash. So it turns out we'd like money, the faster you're willing to pay us the better it is for us. And the more we're willing to pay you in the form of a discount for that number three, the length of commitment, the longer you commit to our products, technology services, licenses, the better it is for us.
Speaker 2 00:29:47 And the more we're willing to pay you in the form of a discount. And number four is the timing of the deal. Meaning our ability to forecast our business is highly valuable to us, not only from an investor perspective, but a resource perspective. And guess what we got quotas who knew our ability to forecast our businesses valuable. And if there's an opportunity to mutually align around timing, that's something we're willing to pay you for in the form of discount. The customer then looks at you. Like, what's the thing that's amazing is that nobody does this, but then they're like, well, Todd, we need 20% off. And what do you do? What do you go into your ping-pong mode of? I can do 10 before I got to get my manager's approval. And now you've just lost or get it done by the end of the month.
Speaker 2 00:30:33 And I'll help you out like the fake expiring discount, which I will rant about all day long at the irony of fake expiring discounts and how it actually drives the human mind to wait. Instead of accelerate is a side note, but you either could go those routes or you go the route of, Hey, listen, I think we might have a way to get you there. You know, that other division you were looking at, if you accelerate that more volume better for us, we'll pay you in the form of a discount to do that. Hey, you know, you're paying us quarterly and net 45 in this thing, there's value in upfront annual payments to us, the faster you pay the better. And if you can go to net 30, those are two things that we're willing to pay you for in the form of a discount.
Speaker 2 00:31:15 This is a one-year deal. There's value in our ability to extend that out to two years or even three years. And those are things that for that exchange of value, we'll pay you for in the form of a discount. And Hey, here we are. It's September, October, or whatever. When do you think you might get this done? Like let's go through a close plan together. And if we're able to mutually align around the timing, there's value in our ability to predict, and we'll pay you to hold to it, give the customer skin in the game to do it. What ends up happening is your customer start negotiating their own deals. Like it'll blow your mind. How this sounds crazy. If the first time you're hearing it, but when you start trying it you'll find that the customers don't even know what to do with it.
Speaker 2 00:31:54 Like they're like given the tools to negotiate their own meal, you get something of value for every dollar you give away in the form of a discount. Your deals become more predictable because of that mutual alignment. And in the end, you build trust at the goal line instead of eroding it via traditional means. That's what transparent negotiating is. It's just simple. We're every for-profit company in the world cares about how much you buy, how fast you pay, how long you commit when you sign every single one. Why don't we play those cards face up and have a mutual conversation. You internalize those four things. It'll change the negotiation conversations you have tomorrow.
Speaker 1 00:32:33 So I remember this well before your book is that it was something I remembered exact target. The four, I remember the, the levers that you can pull, right? If you do want that allows us to do another thing, right? But if you give and take and the ebbs and flows, which I always, it made so much sense to us because it aligns so well. Right? Cause we did turn, we did have contract. We did, the timeliness was always important. Is there scenarios, Todd, where like, let's say you don't have a contractual solution. Like it's not contract. Like, is there levers that, does it have to be four? Can it be three? Can, can, Hey, can you model these things that are more proficient to your bit? Like help us understand that a little bit more?
Speaker 2 00:33:10 Well, if you are a for-profit business, I will bet you the four of the four I teach services business. I literally did. I got a decent shirt on and I don't look like a bum today is I just taught a consulting firm, the four levers, right. And their, their levers are based on the volume. So the amount of resources and like they're going to be taken on how fast they pay the commitment, length of those resources. And they've got resources sitting on the bench to that mutual alignment around timing is hugely valuable. Those are their four levers. Right? I think about like the last time I bought a car thinking about like, you know, what they care about. Not only the car that I buy, but like the ad-ons and all that kind of stuff. So the volume, they care about the cash, right? Am I going to lease it?
Speaker 2 00:33:57 Am I going to write a check? Am I going to finance it? The commitment length, which is them trying to upsell me on warranty and warranty lengths that a 35,000 they want the 70,000 and then they want you to buy it right then. Right. And then there's a couple other ones that maybe layer in, but at its core, the four, the four for every for-profit company in the world. And that's part of what makes it more effective is when you walk into any company you're selling to a retailer or somebody who's like CPG company, like CPG company, when they're selling, they care about how much the retailer buys, how fast they pay, how long they commit and when they get like, that's it. So it makes it relatable instantly for every for-profit company. So I would implore people like don't try to get creative with it.
Speaker 2 00:34:44 It'll wind you up pretty fast and screw you up with a procurement person. Number one, I'll answer a question before you asked it here that I oftentimes one of the arguments I have this morning, as a matter of fact was, Hey Todd, what about a fifth lever? And it's marketing and case study. Like that always drives me nuts because a, if you contractually obligated customer to a marketing case study and you suck, are you going to hold them to it? Like it has no teeth. If on the other hand, you create a great relationship with a customer and they're killing it and they're getting like their career, like they're loving you, right. Could you just ask, like, is that something worth paying for, is it worth paying for something in the form of a discount that will have no teeth? If you suck, you won't hold them to it. If you're fantastic, all you gotta do is ask. So like, just make sure that you just stayed at the core and start with the four. And I'm telling you it'll change the conversations that you have with potential customers.
Speaker 1 00:35:42 And I love the fact that you brought that full circle. Like, Hey, listen, once again, don't overcomplicate it, right? These are four universal things that apply to any for-profit organization out there. Not no matter how you shake it out, it is what it is. So let me ask you this though, Todd, because I think I know the answer, but um, we're going to play devil's advocate here. This isn't something you do after the fact, like I'm just going to throw out a proposal. Like this is something you say, Hey guys, we put together the proposal here, like you are fully transparent. Here's our lovers here. How I got to this? You're not doing this after the fact, once you get into negotiation mode. Oh, by the way, I got to that because I did this, this and this. Sorry. So just help me understand that a little bit more time.
Speaker 2 00:36:23 Yeah. I mean that first time that it happened, the company was Schlumberger down in Houston. That was the bad way of right. That was like waking up in the morning and going, Hey, there's a marathon going on. I think I'm going to run it. I think I'm just going to go run it. Why not? And like your toenails are popping off by mile seven. Like that's dumb, like negotiation is an event, but it is a process. And so to your point, when your first ask about the pricing structure, like, Hey, how do you, how do you price this? If you're in SAS, it's the four, right? It's just like, Hey, our pricing is based on volume, right? Like exact target world. It's CPM. It's like a commitment you commit to more and that's reflected in your pricing. And then to just dialogue that hit your pricing structure.
Speaker 2 00:37:09 Our model is based on upfront annual payments, a two year commitment. When you then layer of the proposal in and you deliver the proposal, you just make sure that it's clear that, Hey, you've earned a volume discount based on this level of commitment and the haters, another one here, if you want it. And if you want to go back, it goes up right? And by the way, it doesn't have to be pronounced. If you don't even a slide, it's just like this pricing, our pricing model is based on upfront annual net, 30 and a two year commitment or whatever it is. Then you can start to introduce that fourth one, as you get into the negotiation, right. Which is, Hey, I know you're asking for discount. We've got four ways to get you there, commit to more volume, pay us faster, commit longer. Or when we haven't talked about is the mutual value that we have in our ability to predict, like, if we're able to mutually, I use that word mutually a ton, but like if you're able to align and help us predict that prediction is valuable to us in our organization, and that's something we're willing to pay you for in the form of a discount.
Speaker 2 00:38:09 Now that's the answer to your question is if you do it right, and you lay that foundation at the beginning, it makes the event of negotiation so much easier, but I'm sorry, you're going to end up in certain circumstances where you've got the helicopter buyer at the end, that procurement person. I remember there was a deal I was working with as I was running, one of the regions of exact target. We got into this negotiation where like the day they're supposed to sign, we get a call from the CFO or CFO's office saying, CFO's the signer. And he wants to talk to you. All right, helicopters in. And it's basically, he comes in and he's just like, we need a discount. We're committing the less volume. What do you do? Well, if you have those four and the bullets start flying, it becomes really easy.
Speaker 2 00:38:53 It was an easy conversation for me to be able to go, Hey, I know you're kind of jumping in at the end. You probably can see this here, but let me just explain it. Your pricing is based on the commitment to the volume that you're making the upfront annual net, 30 payments. It's a two year commitment and we have mutually aligned around timing, which we're paying you in the form of a discount to hold to it. You're asking to change two components of that. You can, but I don't think you're going to like it. And here's why I take them through the four levers. Again, like if you want to commit to less volume, your per is going to go up. And then when you add those users, six months from now, the overall pie that you're paying for is going to be quite a bit higher if that's what you want.
Speaker 2 00:39:33 That's cool. We'll share the pricing. It's the structure by which we've created a profitable business model. Right. And he was quiet for so long. We were, I am in each other and he's just like, crap, crap, crap. And I'm like, he's, this guys needs to be the next one to talk. And sure enough, they signed for the full boat, the next step. Right? And so it will sometimes be an event, but as long as you've got those four levers to fall back on the better you've laid the foundation, the more successful you're going to be. But even if you end up in a situation where you're up against it, having those four levers will change the conversations you have with your potential buyers.
Speaker 1 00:40:11 You know, I love that. The fact that you said that from the standpoint of, Hey, right? I mean, let's say you're a great salesperson. Maybe at best 30% close ratio, 40%. I mean, if you're a phenomenal 40, like that's pretty high, right? That means 60% of the time you're losing. Right. But there's things that are going to be natural ebbs and flows that are going to come up, that you can only do what you can do the best to your ability to prepare for it. Right. So I like the four levers because in my mind has always given me the ability to not be confrontational, but be more collaborative in our conversation around, Hey, here's where this came from. So let's have a conversation on how to make you happy and us happy based on the parameters of this. And we'll both walk away feeling that we both got something from this win-win situation without it. It's kind of like, well, can you do 20? Like to your point earlier, no, but I can do 10. And like those things, that's all that you're left with. If you don't have that foundation, that's kind of my thought process and what you put together.
Speaker 2 00:41:06 Exactly. And there's two things I'll rant about on that. Like number one, I've always been an advocate for providing a range upfront. I think it's part of transparency, right? That if you're talking about a six figure solution to a four figure buyer, one of you is in the wrong discussion. You better figure that out early, right? It's like, Hey, based on your scenario, your pricing is going to be between here and here, likely now, based on the scenario as we see it, we're going to dig into it. But if we're way off, let's talk about that now. Right? And so when you can lay that foundation upfront, then when you get down to the goal line, you're going to have a lot less of the crazy weighted, 30% off, oh, there's a competitor. That's 60% off match there. But Hey, listen, that happens so much less when you've laid that foundation.
Speaker 2 00:41:55 So that's number one, but number two, something else you triggered for me, I live along a forest preserve here and I've got a whole pile of dogs. Right? And so you take the dogs for a walk. And my goal when I take my dogs for a walk is to get on the path, go, come back, get home right now in your sales pursuits. That's what we're trying to do with a buyer, right? Like we want them to get from point a to point B. Now imagine that you're walking though, and you see a rock and there's a little piece of paper under it. And you accidentally knock over the piece of paper and there's a $20 bill under it. Like, what do you do? Well, first of all, you might look around and go, can I keep this? But the second thing you probably do is you go, I wonder if there's $20 under, under other rocks, right?
Speaker 2 00:42:41 And now, instead of going down the path, you're going left, right. Left, right left. Right. You're checking every rock. And you've just slowed down the whole process because that free money was just, you stumbled on it. You did nothing. Right. We as sales professionals do this all the time with, Hey, we got a discount coming up the undo, get it done by the end of the month, there's free money. Here's just a rock. You didn't even have to ask. Right. Or customer says, I need 20% off. And you're like, I can do 10 before I got to ask my manager. Right? Like, well then what happens if you ask your manager? We are actually the minute we start giving away anything for free, anything it's little as, oh, you need net 45 payment terms. Cool. We can handle that. The minute you do that, you have driven a buyer to go, gosh, that was easy.
Speaker 2 00:43:31 What else should I be asking for? Now? The, the fake expiring discount that I ranted about a little bit earlier is that the one where it's like, Hey, if you get it done here, by the end of the month, we're given 20% off. Cause like we're trying to rally the organization around this and 20% that ironically wouldn't drive you as a buyer to go, well, there it's the beginning of the month. And they're already telling me this. I was thinking about signing now, but I think it'd probably be better if I waited until the last possible minute, because it sounds like this is going to be a really important month. And all I gotta do is ask for more stuff. Like we are ironically driving people to slow down instead of speed up. When we just give away the end of month, end of quarter discounts to wrap all of this together for you is when you lay the foundation of the four things that matter to us, how much you buy, how fast you pay, how long you commit when you sign and that mutual alignment around signing.
Speaker 2 00:44:27 It's got nothing to do with end of month. It's got everything to do with, and us being able to align from a resource and investment perspective and all that. When you do that, you will have an easy way to handle every single request that comes up. I need a discount. I need slower payment terms. I need, you know, pay monthly. I don't want to commit to a year. I need termination for convenience. I can't sign by the end of the month where you hold the price. The next month you have that to fall back on and you stop giving away anything in the form of charity to their bottom line. And instead you are getting value for every single dollar you give away in the form of anything. And then again, the amazing thing is that like, that feels rough, right? Like, Hey, I'm giving, like I'm getting something for everything I give away.
Speaker 2 00:45:14 But the ironic thing is you're actually building trust through the process because you laid your cards face up and you did it early. And now instead of eroding your building, not only your deal values, but the relationships with your customers and then what's even funnier is when the customers come back to renew, they remember right, right. Like I had one customer that he called me cause he hated salespeople, long story. And I was just like, Hey, how long have you known me? And he's like, is it the effin levers again? I'm like, of course it's the levers. And he's like, remind me of what they are. And I gave it to him. He hung up called me back. He's like, we're going to do the renewal at this dollar amount. Instead of paying quarterly, I'm going to pay you annually. And I'm going to commit the renewal for three years. Like cool. Talk to you in three years jerk. But the point being that this helps you downstream really, really quickly to
Speaker 1 00:46:05 That's. Cause you know, I think it's all about, you know, expectations, right? In, in being collaborative expectations to your point. And that if you set those expectations early, as early as possible, right, that range you were giving, everything you were doing is really kind of level setting, setting proper expectations mutually, right? That it was a win-win for them. Hey, we both get out of there sooner than later, it was just not a fit. I don't want to waste your time. You don't want to waste mine. Let's figure out if there's something there. I love the whole transparency piece of it. And I know we've been talking there's a lot. I know there's a lot of rabbit holes you can go down from, uh, because I, I still find myself, I'll be alternately candid. You know that whole end of quarter, end of month. Those are one of those things you do throw out there every so often when you're up against it, the boards on your down, your throat, those types of things, but you're right. Those are things psychologically that it's more counterproductive than, than it's actually intended to be. Right. So I think those are all the good nuggets from Utah.
Speaker 2 00:47:02 Yeah. Yeah. I mean that, that's the one that I've been really ranting about lately is when you throw a unsolicited end of month, end of quarter discount, you are ironically driving a buyer to wait and try harder. It has the opposite impact that you want it crazy.
Speaker 1 00:47:19 So Tom, how do people get ahold of, I know you've got the book coming out, transparency sell obviously the whole nine yards. How do people get ahold of you? How they connect with you the whole, the whole kitten caboodle, if you will. Yeah.
Speaker 2 00:47:29 I'm kind of hard not to find. I think that's the good news. So yeah, I mean the book, the transparency sale, I have the chapter that talks about transparent negotiating. And then I go into all these other pieces. It's, you'd find that wherever you buy books, of course, but you can find me on LinkedIn follow connect. If you connect, let me know that you heard me here on samurai. That would be cool to now my website transparency, sale.com links to blog posts and videos. I just rant about stuff all day long. So you just want a bunch of free stuff go and again, for your company, I do workshops on transparent messaging and positioning and presenting on negotiating and then a lot on the sales leadership stuff too. So I'd love to be an asset or a resource for you and your teams if there's so alignment there. So let me know. Awesome. Okay.
Speaker 1 00:48:18 I'm going to put all that guys in, in the show notes as well. Todd, I sincerely appreciate you taking the time. It was an absolute pleasure, man. Thanks again.
Speaker 2 00:48:27 This is so much fun. My brother, you can tell, I could rant about this stuff all day. So thanks for having me on.
Speaker 0 00:48:33 Thank you for listening to the sales samurai podcast with your host, Sam Capra. Be sure you subscribe to our podcast and visit sales samurai.io and join the conversation. Access show notes and discover bonus content.
Todd Caponi fell into sales, then fell in love with the decision science surrounding it. He turned that into a career encompassing multiple sales leadership roles, including building the revenue capacity of one tech company from the ground-up into Chicago’s fastest-growing, another where his efforts helped drive the organization to a successful IPO followed by an acquisition worth almost $3B, and another where his turnaround efforts were rewarded with the American Business “Stevie” Award for Worldwide Vice President of Sales of the Year. His first book, The Transparency Sale, has earned international best-seller status and has won three best sales book awards. He now speaks and teaches revenue organizations on leveraging transparency and decision science to maximize their revenue capacity. His next book, The Transparent Sales Leader, is planned for February of 2022.