John Barrows is the sales trainer the worlds fastest growing companies call when they want to accelerate their growth even faster.
On today’s episode of The Salesman Podcast, John shares how we can smash through budget objections or better yet, take them off the table completely.
Featured on this episode:
Resources:
- JBarrows.com
- John’s online training platform
- John on Linkedin
- @JohnMBarrows
Transcript
John Barrows:
If you’ve done your job as a sales rep, all the way up until the end of where you’re presenting your solution and that type of thing, and you get the client bought into it, they’re buying that. They’re buying the value that you’re bringing to the table.
Will Barron:
Hello, Sales Nation, and welcome to today’s episode of The Salesman Podcast on today’s show. We have the legend is, and I enjoy these conversations with him, John Barrows. And on this episode, we’re diving into how we can break through that objection we’ve all had of, “I just don’t have the budget.” What that means, whether it’s our responsibility, whether it’s their responsibility, the mindset, and the weird money things that’ve all got going in our head that all affect this. We cover it all. And there’s a lot of value in this episode. I’m certain of that for you guys, Sales Nation. You can find out more about John over at Jbarrows.com. At now we talk about is linked to in the show to this episode, over at salesmanpodcast.com. And with all that said, let’s jump in to today’s show. Hey, John, and welcome back to The Salesman Podcast.
John Barrows:
Hey Will. Thanks for having me. I appreciate it, man.
The First Thing to Do When Your Prospect Brings Up the Budget Objections · [01:25]
Will Barron:
I’m glad to have you on set. I’m glad today. Before we click record, I said this and I’ll say it again. We’re going to talk about breaking through budget objections, but I’m confident by the end of the show. We’ll be talking about something completely different, but still as useful and valuable for the audience. So I appreciate that as a guest from your side, John, that we go into these conversations knowing that it’s going to be an interesting one. And with that, I want to tee up the conversation with this story, this tale, this experience that a lot of us have probably had.
Will Barron:
It seems like somewhat of an amateurish position to be in. And hopefully we can explain and reverse engineer why that is at the end of the show. But we go in, we’ve pitched a potential customer, we know that our product to service is perfect for them. We’re going to save them a lot of time or money. We’re going to make them look good internally. And then we get this dreaded response back of, “Well, sounds fantastic, but we just don’t have the cash.” When we get that response? Should we take it as that is the truth, that is the reality, or do we need to dive further into it at that point?
John Barrows:
Yeah. I mean, I wrote about this recently and the title of the post was The Budget Objection is Crap. I think you got to figure out, we got to dissect. Like you said, to figure out how we got to that point in the first place. If you’re pitching a solution that you think is right and they legitimately… And you’re at that phase where you’re like presenting your solution, you’ve done the qualification and now you’re about to present. And you go through this whole thing and afterwards you get that, “Yeah, we don’t have budget for this.” First of all, shame on you for getting to that level with a client without understanding if you were even close, right? And so, I guess there’s two things on that one that we can dive into. One is the person that gave you that objection.
“If there’s a genuine need, then you can find budget. You can find somebody with authority that’ll make this happen.” – John Barrows · [03:10]
John Barrows:
And two is how did you frame the conversation before you even got there? And I’ll go back to the typical BANT, right? Budget, authority, need and timeline. I think BANT’s crap. I’ve always thought it was crap. At set for one in there, right? Budget, authority, need, and timeline. The only thing I care about in BANT is the need, right? Because if there’s a genuine need there, then you can find budget. You can find somebody with authority that’ll make this happen. And you can expedite a timeline at least in my experience. And so for me, it’s like… Again, you got to make sure you know you’re talking to. Rarely do I get the budget objection from somebody above the power line, somebody in a real executive position who is a decision maker, because when we talk about champions for instance, everybody talks about get a champion, get a champion.
John Barrows:
Well, look, got to make sure you know what you’re talking about when you’re talking champion and you have a good vocabulary around that, good definition for it. To me, there’s fans, coaches, and champions. Fans are people that like your stuff, usually end users but have zero bearing on the decision. Coaches are people that help you navigate the political waters and tell you who you need to talk to. But you hear coach stuff from coaches like, “Hey, you didn’t hear it from me, but this is what’s going on.” So it’s like, “Hey, thanks for the info. But if I can’t use it, how good is it?” And again, they’re rarely invited to the table when it comes time to make that decision. Champions are people above the power line. And the two characteristics that I look for in champions are one, they can steal budget so they don’t need to be the budget holder, but they need to be somebody who can have influence on budget.
John Barrows:
And then the other one is they agree to be your champion. You actually have that conversation. Like you ask them, “Hey, will you be my champion? Or hey, you’re going to fight for me internally, right?” Because there’s really only two answers to that question. One is “Yes, John. Absolutely.” The other is pretty much anything other than that.
The Benefits of Finding Your Champion Early in the Sales Process · [04:49]
Will Barron:
And let me just jump in here a second, because this is super valuable in itself. Is that a question that we should be proactively asking at least once within… And I’m talking about larger deal size business projects here perhaps, but is that a question that we should be navigating and looking proactively to ask within the account? As in, we shouldn’t be getting ahead of ourselves in the sales process before we found that individual.
John Barrows:
I think we need to hunt for it, right? And yes, and the answer is we should ask for it. And I think you should be very direct in when asking for it. Now, there’s a time and a place to ask for it. You can’t just straight up, come out before you’ve even developed a poor relationship with anybody or done anything and say, “Hey, you’re going to be my champion on this.” And you also got to be careful of who you’re asking, right? Like, I sell to VPs of sales and CEOs all day long. So when I say, “Will you be my champion?” They know exactly what that means now. HR, IT, something like that. They’ll usually get a little weirded out by that question. I did that too at IT director once. So it’s like, “Hey, you going to be my champion on this.” And the guy was like, “What the hell are you talking about?” I’m like, “All right. Sorry, let me rephrase here.”
Will Barron:
It’s also a weird proposition at that point.
“Negotiation is all about gives and gets and the equality of those gives and gets.” – John Barrows · [06:12]
John Barrows:
Yeah, yeah. I could tell he was weirded out. So I was like, “Look, let me ask you. When the time comes to make a decision, you got to fight for me.” That’s what I’m asking for. And again, and I think there’s a time and a place for this. And it goes back to negotiations and what you’re giving away to get. Negotiations all about gives and gets and the equality of those gives and gets. And so for me, for instance, here’s a nice smooth way of asking for a champion, like a give and a get, right? A give would be somebody asking me for a discount. “Hey John. We’ll, this is ties into our budget discussion too. Hey, John, things are looking good here, but any chance you could get a little bit of a discount here before I really present this to the team or whatever it is?”
John Barrows:
So it’s instead of saying yes to that, first of all you just, “Hey, you know what? I’m happy to, it’s going to take me a little time. I got to go fight for you internally on my end to go get you that discount. We don’t just give discounts here. So I’m going to have to go fight for you internally on my end. Let me ask you, if I can go get you that discount. If I fight for you and can get you that discount, will you fight for me when it comes time to make this decision internally on your end?” Right? Now that’s effectively saying, will you be my champion without saying will you be my champion? And again, the reason I’m very direct with that is because there’s… Again, there’s only two answers there’s, “Yeah, John. Absolutely got to do this.” And the other is, “Well, anything other than that,” right? If you hesitate, now I got to figure out another way. What can I do to get you to be my champion, right?
The Fine Line Between Being Direct and Being Rude · [07:23]
Will Barron:
And they’ve been direct review, right? You are just giving it back as you’ve taken it. Because that’s a direct… If we were having a conversation about procurement and how to deal with sales people, we would be saying, you have to be confident and you have to ask for the discount. So, you’re only giving back to them as good as what that you’re getting, aren’t you?
John Barrows:
Yeah. And there’s a fine line between being direct and being rude in my experience. And I walk that line quite a bit, but across it every once in a while too. But I think the directness is to me, it’s all about expectation setting, right? You’ve set the expectation of, “Hey, look, this is how it’s going to go. I’m not pulling any punches here. I’m going to try to get you what you need. This is what I need from you. How can we work together with this?” And seeing if you’re on the same page with that person and ideally doing it front. And again, I’m going to tie this back to the pricing conversation. Like, a lot of people have different thought processes on pricing on when to introduce it.
John Barrows:
Some people want to talk about it right up front to just make sure you’re not going to waste any time, and then show value based on that. Or the other approach is you don’t talk price at all. And then you hit somebody… You show value, value, value, value, value, and then you share price, right? And that’s the scenario you brought up to start this whole thing off with is you show value, show value, and then you present, and then you tell them what the price is. But then a lot of times you get the, “Whoa, holy shit. Like, I had no idea what was going to cost that much.” And now you’ve just wasted a tonne of time. So, I’m a little bit in the middle of how to introduce pricing. I usually give ballpark pricing like upfront, like early on to say. Especially, if they ask. If they’re asking by the way, just want a little red flag here.
“If somebody asks for price on the initial qualification call or something like that, you’re either not talking to the right person or they’re just shopping for numbers.” – John Barrows · [09:04]
John Barrows:
If somebody asks for price on the initial qualification call or something like that, again, you’re either not talking to the right person or they’re just shopping and they’re just looking for numbers. And I’d call it column fodder, right? Either putting you on a column to say, “Okay, whatever.” But I’ll say, okay, look again, go back to give, get. “Hey, I’m happy to share with you some pricing here. Help me understand a little bit more about your scenario.” Right? So again, give, get. For me, it’s like, “Okay, so how many sales reps are we talking here? What’s your current? How many different locations? How many people? What’s your hiring schedule for next year? Okay. For companies like you, give or take a programme would probably be in the range of $30,000 to $70,000, something like that, right?
John Barrows:
Is that in the range? And yeah, because I do want to… And I’m going to give you a huge range here because I’m going to give you that low end of the range. If you have a heart attack on that low end of the range, then it’s literally not worth us having this conversation. But as long as we’re in the middle, like we’re okay there. Then I was like, “Look, I can give you much more detailed pricing when we get to the details of really what you need and those type of things,” because that’s the way it sets the stage for it. And then it gets to the point where now when we present pricing, we have some parameters here that we can work with.
When and How to Bring Up the Price Topic With a Potential Buyer · [10:20]
Will Barron:
So if we’re going to go through this process, John of perhaps give a little, get a little even. And we’re almost like prodding them and then get a response. And then we go back and forth. And perhaps over time, we’re narrowing down this price and this budget and we’re suss out where we are with it. At what point, or do we even say, this is the set price? Because we want to get out of here is especially for these more project led deals versus this individual product. So for me medical devices, it would be, “Hey, we want to rebuild these theatres and have all your gear in it. And have you do a turnkey solution for us versus this camera stack used in endoscopy, in theatres is 50,000 kind of thing.”
Will Barron:
I think there’s a different approach to both of them, but go and feel the more appropriate side of things. If we say it’s going to be within these ranges and we preframe it, we’re also limiting ourselves to that range, aren’t we? And obviously as we narrow down and narrow down, so should that range be ridiculous or should we… [Inaudible 00:11:17] is clearly your business acronym, your experience and nothing else falls into this as well. You’ve got to make a guesstimate of what you think they’ve got. Is there a process to put that in place other than just relying on experience and gut instincts?
John Barrows:
I think experience comes into it. I mean, I think you know. I mean, if your range is 10,000 to 2 million, then you don’t know enough. Then you don’t know enough. Like, if you genuinely don’t know enough to give them a quote, then you don’t give them a quote. You know what I mean? But I think most people know their product well enough and the parameters well enough with a couple of data points they can say, “Okay, give or take.” Unless something out of the ordinary comes up or unless you’re looking for us to do something totally customised or something like that. You’re in that ballpark range of… Again, $30,000 to $70,000 or a million to $2 million, something like that depending. I mean, I don’t really sell multimillion dollar deals.
“Unless you’re selling something that’s super complex and you have to customise every single thing for that client, you should be able to give them a ballpark price.” – John Barrows · [12:30]
John Barrows:
So I’m usually in the $30,000 to 400,000 range as far as programmes. And within that range, it’s pretty easy to check off a few boxes and say, “Okay, give or take you’re in this range.” So, I do think that… Again, and I’ll say, unless you’re selling something that’s super complex and you have to customise every single thing for that client, you should be able to give them a ballpark. Again, just to get the reaction. A lot of things that I do in sales is really to see what your reaction is to whatever I’m saying. Because if you react in a positive or negative way, then I can dictate where that conversation goes.
How to Talk About Price Without Scaring People Off and Allowing Room For Negotiations · [12:55]
Will Barron:
Yeah. Okay. And this might seem like an obvious question. We’re going to ask it anyway. Should we always be pitching the highest, most expensive offer to allow us to come back down as opposed to being in a situation where we’re trying to negotiate ourselves up the food chain of products or services or the implementation of it?
John Barrows:
Yeah. I don’t think always. Again, you don’t want to oversell it and you don’t… But I do think you want to pitch the right solution. You know what I mean? I think you want to put everything in there. I think what a lot of reps do is for instance, they’ll present their solution, their software or whatever it is. And they’ll hold off training, they’ll hold off customer success, those type of things. And then they’ll try to add them at the end. “Oh, well…” and then that never grows well, right? Because a client will say, “Oh, well, what about training? Oh, that’s an extra cost there.” And that’s where the client’s like, “Oh man, I had my head wrapped around this and now I got to spend extra for that.” So I think what you do is you present the solution, like the best case scenario for them.
John Barrows:
And again, this challenger sale type stuff like, “Hey, when our relationships go best, this is how they typically are mapped out, right? You get this, this, this, and this, you get training, you get onboarding, you get all these different things.” And then when they start to bulk on price, now instead of just discounting, now it’s about taking stuff away, right? So now it’s like, “Oh, okay. Well, we can reduce the price if we take away the training.” And now you’re a little bit more in control than they are because nobody wants to have stuff taken out of what you just developed from a value standpoint and presented to them if they buy into it. But then when they really argue on price, you can be like, “Okay. Well, all right. Well, then we can just remove this and we can remove that.”
John Barrows:
And they, “Whoa, I don’t want to remove that.” You know what I mean? So it gives you a little bit more leverage there. And another point that I want to make on this is something that I’m going to beg sales reps to remove this… I want just remove this word from the vocab… Remove discount from your vocabulary. Instead, replace it with flexibility and creativity. And that’s where I go back to framing the conversation up front. So somebody says, “John. Hey, you know what I appreciate… Thanks for the cold call. Sounds like you got an interesting product. What would this cost me?” It’s like, “Wow. Help me understand a little bit more about your situation. Okay. Give or take, you’re probably in the range of $30,000 to $70,000, something like that. Is that in the ballpark? Well, yeah. I mean, it’s a little bit pricey, but do you guys get offered discounts or something like that?”
John Barrows:
Immediately, I remove that from the equation and I say, “You know what? Look, yeah, we do have some flexibility and we can get creative with our pricing. Usually, that comes in the form of length of contract or size of deal. So when we get to that part of the conversation, I’ll be happy to address that with you.” Right? So you address the concern, you’ve framed it, and now you have something to go back on. So then when they start asking for discounts at the end, you say, “Okay, great.”
John Barrows:
Again, give, get, I’ll give you a discount. And so do you want a two year or three year commit on that? Because if we do three year, I can get pretty creative with this, or do you want a 100 licences or you want 150 licences, because I have some flexibility if we take it up to that next level there. And now you’ve set the stage for, again, the framework of the pricing discussion, the framework of the “Discount discussion.” And that’s where I think you… Again, you can have a lot more control as a sales rep being in that situation if you frame it the right way, going into it.
Why You Need to Eliminate the Word “Discount” From Your Sales Vocabulary · [16:26]
Will Barron:
Why is that word in particular discount so toxic, other than the obvious of every salesperson, like 99% of them drop their pants as soon as they think there’s a deal on the table, they’ll discount 10% immediately. So the purchaser assumes that. So putting that to one side, even like linguistically or the framing of the conversation that comes with the word discount. Why is it just so such a horrible toxic word for us?
John Barrows:
For various reasons. I think discount, a lot of people associate with price, but it also associates with your product as well. So, if you’ve done your job as a sales rep, all the way up until the end of where you’re presenting your solution and that type of thing, and you get the client bought into it, they’re buying that, they’re buying the value that you’re bringing to the table. And that’s really ultimately… I mean, if you are literally just selling on price, then this podcast isn’t for you. Well, this session isn’t for you. If you’re selling a pure commodity and it’s a price based thing, that’s fine. But if you’re selling value in any way, shape or form when you present it to them and if they give you the chance to present value and understand and qualify the needs and then present the solution that fits those needs based on what you know, that’s what they’re buying into.
“When you discount, you’re not only discounting the price, you’re also discounting the value of your product or service.” – John Barrows · [17:41]
John Barrows:
They’re saying, “Okay, that’s cool.” Now when you discount, you’re not only discounting the price, you’re discounting the value that you just articulated because you’re like, “Hey, look. Here’s the package. It’s going to cost you $80,000 or whatever it is.” And all of a sudden that’s where my head’s at as far as how much this thing costs, right? And how much value you’ve put into it as an organisation and how much value would bring us to me. Now, you go down to $70,000, you go down to $60,000, you got on a $50,000. And I’m like, psychologically, I might be happy as the customer because I’m getting a better price. But in the back of my head, subconsciously all of a sudden your value is going further and further and further down.
John Barrows:
I mean, I ask a question like when you get something for free, how much value do you put on it, right? Not much. So the less you pay for something, the more value it is. It’s like one of my favourites, the CEO of Red Bull. He goes, somebody asked him one time in an interview. They said, “Hey, why is Red Bull so expensive?” It’s actually less ounces than like a Coke or something like that. Get sold for $0.50 and you’re selling Red Bull for like $2.53. And his answer was brilliant. He goes, “Well then, how else would you know it was a premium product?”
Will Barron:
Nice.
John Barrows:
And to me that was like, “You know what? You’re right.” Right? Because there’s plenty of things where I go out there and I’m like, “You know what? I want that.” Because there’s a certain… It makes you feel a certain way, like whatever it is. But if I found out it was cheap, then I’d be like, “All right.” It’s like my favourite watch, right? Like tag. I got my tag right here, right? When I was young, I used to buy cheap watches that looked like tags, but they weren’t tags. And I’d be like, “All right.” But it looked almost exactly like this, but I spent $75 for it. You know what I mean? Or $50 for it on the streets of New York City or something like that.
John Barrows:
And you know, when I smashed that watch… I got it. It looked nice. But when I didn’t care about it, whatever. If I lost it, who cared, I didn’t take much care of it. When I stepped up and was able to afford certain things and then I wanted a tag. And so I went to a legit jewellery store and I didn’t talk about price. I knew what I wanted and I knew it was something that cost a certain amount of money. So I’m like, “All right, cool. Let’s do that.” So I think it’s a lot of perception versus reality as far as what you’re selling, but there’s a huge psychological component to discounting. Because if you discount, you’re not only discounting the price, you’re also discounting the value that you’re bringing to the table for them.
Money Mindets and How They Affect Pricing Conversations · [20:17]
Will Barron:
How much of our own insecurities either about money or the psychology of money or things of that nature is wrapped up in all of this? And what I mean by that is when we go into a conversation, how does it affect us if we think our product is expensive, what’s happening to as we’re communicating with the person in front of us? Because clearly we might not be verbally communicating that, but the message might go across another methods, right?
John Barrows:
No, that’s a great question. I think it cracks me up pricing’s always… Sales reps, especially for younger less experienced sales reps. And then I went through this quite a bit, even recently. I mean, I’m 41 years old now. I still have to get comfortable with pricing sometimes, because you know the situation. Like, I was a VP of Sales, right? For a startup, and we had no money. We had no funding, nothing. And so when I would look for sales training, no joke, like I’d have a sales trainer come in and pitch me on something and then he’d tell me, “Okay, John, this is going to… You need each one of your sales reps has to be certified. That’s going to be $2,500 each person. And then we’re going to have to do a day or two day session.
John Barrows:
That’s going to be like $10,000, $20,000 or something like that. And I would literally just laugh the guy out of my office. I’d be like, “Yeah, dude. I got $5,000 for the year for training at this point. So thanks for coming in.” And so for me, I have this soft spot in my heart for especially startups with no funding. It is weird, like in an example. I actually discount more for… I used to discount more for smaller customers than I did for my biggest customers. Because I’m like, my biggest customers, you guys have the money here. But when you’re talking about a five, six person sales team, I’m like, “God, this is really expensive.” You know what I mean, type of thing? So I would actually discount. But then all of a sudden, for me, especially if it’s all on site training for me, it’s like, “Wait a minute.”
John Barrows:
A day away from my daughter is a day away from my daughter. Like, you know what I mean? I don’t care who you are, so this is my price. But it cracks me up when price comes up with reps because we get beat up on it so much that especially, if you know you’re a premium product and a premium price, you inherently are hesitant when you deliver that price. So when somebody says, “John, how much is this?” The answer should like… Say something’s $20,000, okay? When somebody says, “John, how much does this cost?” The answer should be $20,000. And then you should shut up and wait for them to go, “Whoa, holy crap. That’s way more than I was…” Something like that, right? But instead, most sales reps would ask how much it is.
John Barrows:
It’s never $20,000. It’s always, “Well, it’s 20,000, but it really depends on if you are, or…” Now mind you, I might have been out there talking to your competitors here and $30,000, $40,000, $50,000. And I heard $20,000 from you. And I was like, “That’s actually pretty inexpensive. That sounds pretty good.” But as soon as the word but comes out of your mouth, I ain’t paying $20,000 anymore. You know what I mean? You just gave me an objection before I even had one. And to me, yes, there are variables when it comes to pricing, okay? But ultimately when the pricing is delivered, like you should just deliver it. Look, based on what you asked for, based on what we put together here, this is my recommendation for a proposal and it’s going to be $75,000. What’s your feedback? You know what I mean? And just wait for it, because you could be uttering an objection before you even get one.
Why You Should Always Be Confident With Your Pricing in Sales · [23:33]
Will Barron:
I’m literally going through this right at the moment, John. And the audience will laugh at this and then maybe you will as well, sir. So the show’s growing, the sponsorships deals that we were doing 12 months ago, were a thousand dollars here, $2,000 here. And paid the bills, moved me from one flat to this new flat, new studio and the cost of going on there and the live content. But now I’m starting to talk about like six month, 12 month deals. And I’m doing the same thing of this is the market value of… There’s a like standard per thousand downloads rates that most medium size podcasts sell advertising app. And I’m pitching people on this and it’s becoming six figures now, as the show grows in the audience for six months, for 12 months. And I’ve done it twice in this… We’re just moving into quarter two now, but twice in quarter one, I did it of… I was a bit hesitant of the price.
Will Barron:
I was like, “Well, I’ll just give it just below the market value. I know that the audience is really strong. I know that there’s super niche. There’s very few audiences of this size of millennial, B2B sales professionals. People are somewhat affluent,” all this good stuff. Like, when you look at it away from what I’m trying to do with helping sales people, when you look at the demographic and the business side of things. I know it’s a great audience to have. And the audience really responsive and all this good stuff, but still I was like, “I’ll just put it just underneath that.” And clearly there’s something going on in my head with the value of the company and all this good stuff. And then, the two deals that I pitched recently, both of them, I’ve just gone, “What’s the price? Yes. Okay. We’ll do it.”
Will Barron:
And I’m like, “Shit.” That’s like, “I should have charged double,” because we responded so quick to just say, “Yes, thank you. Give me an invoice.” There was no selling. There was no, give me air proposal. Let us talk through this. I think we need to change this or it’s too expensive or discounts. It was just like smash. “Yes. Send us an invoice.” So clearly I’m under pricing everything that we’re doing. And it’s the one that I’m talking about in my head specifically, which is about three months ago, the one after that was about double and still… And this is a different company. They still snapped it up. So still, still, still I need to… And this is an entrepreneurship thing, more so than sales, perhaps you’ve got specific profitability and margins that you’ve got to make in your sales role, but I’m going through this as well. And I just thought that’d be context for the audience as well.
“The one solution to pretty much every other problem at every stage of the sales process is having a big fat pipeline. If you have a big fat pipeline, you don’t have to try too hard at the rest of that stuff. Negotiation, objection handling, discount.” – John Barrows · [26:12]
John Barrows:
No, it’s spot on man. I mean, I think we… So a recommendation here for reps out there. First of all, one of the best things that you can do when it comes to pricing, and this is why I’m heavy on this with my training is prospecting. Because I think I’ve talked about this on your programme before. It’s like, I found one solution to pretty much every other problem at every stage of the sales process. And it’s a big fat pipeline. You know what I mean? Like if you have a big fat pipeline, you don’t have to try too hard at the rest of that stuff. Negotiation, objection, handling discount. Like for instance for me, I’m currently booked through July right now with onsite trainings.
John Barrows:
And so when somebody comes to me and says, “Hey, John, I’m interested in your training and all this other stuff. How much [inaudible 00:26:37]? All right. Well, first of all, it’s in July. And second of all, here’s my rate card.” And like, “Whoa. Oh, man. Come on. You’re twice expenses as your closest competitor.” I’m like, “Good for them. Actually, shit. Good for me. I should probably be charging more.” And because I want to put myself in a position where. I want your business, I don’t need your business when you need it… When I want your business I do, I sell the right way. I ask the right questions. I make sure it’s the right fit. All those different things. When I need your business, I do some shady shit.
John Barrows:
You know what I mean? Like, I’ll call you up at the end of the month and give you that discount that you didn’t even ask for. I’ll do some just weird that go over your head just to get that deal in, whatever. That’s what I need your business. That’s why consistent prospecting is so important. I don’t care what your role is. The other point I’ll make is you need to practise when it comes to pricing. How you deliver pricing. So, I tier out my accounts, right? So I got my tier ones, tier twos and tier threes. My great, average, and crap. My tier threes, I used to be like, “Oh, stop. I don’t even want to talk to you because you’re a pain in the.” I don’t even want you as customers, right?
John Barrows:
Because if you come on as customers, you’re usually the one that sucks up on my time. And it’s bot usually not a good fit, whatever. But now I actually really like my tier threes and for one very specific reason and it’s for practise. So now for instance, I’ll go back to my example of selling sales training. Like I was uncomfortable when I had a 5, 6, 7, because I charge day rate stuff. So for my training, when I do onsite stuff, it’s a day rate. So you can put five people in there, you can put 3,500 people, it doesn’t matter to me. Really where it starts to make sense from a per head count standpoint is around the 20, 25, right? That’s where it’s like, “Okay, per head. That’s how much it’s going to cost. That makes sense. When you’re down five people, six people, something like that.
John Barrows:
Like the per head fee is really up there, right? But again to me, a day of my time’s a day my time, a day away from my daughter’s a day away from my daughter. So what I had to do to get comfortable presenting price was I got a bunch of tier threes in my territory into my pipeline. And when the price came up, I would say, “Hey, I just want to let you know. So the pricing is $20,000 and I just want to let you know, I don’t discount.”
John Barrows:
And I would wait for it. I’d say, it’s $20,000 and we don’t discount. And I’d wait and half the time I’d get, “Holy shit, John. That is way more expensive than I was expecting.” And I’d say, “Okay, you’re probably not a good customer for me anyways, if that’s the case.” And the other half the time I’d get, “All right. Well, I had to ask.” And I’d say, “Okay. Well, I have to say no, is that okay?” Let’s move on, right?” And what it did was it built up my confidence. So then all of a sudden I went after my tier twos and then I raise my [inaudible 00:29:20].
Will Barron:
And let me ask you this John, just on that.
John Barrows:
Yeah.
Confidence in Your Solution: How to Set a Price and Stick With It · [29:23]
Will Barron:
How many people… And clearly you won’t know the numbers off top of your head. And clearly there’s as an anecdotal element to this, but were there anyone that just went, “Okay, that’s fine.” And you thought that they were not suited and not a great customer, but by the very nature of you just being confident with your pricing, they got on board with message.
“Confidence overcomes most shortcomings, except for an ego. If you have an ego, there’s not much I can do for you. But if you have confidence, you can pretty much get to wherever you want to go.” – John Barrows · [30:12]
John Barrows:
Yes. Absolutely. More than a few people that were like, “Well, okay.” You know what I mean? Because again, reputation, confidence and all those different things. I mean, I have a few things going for me not right now with my personal brand that a lot of sales reps don’t have. But if you have a good brand out there in the marketplace, you’ve done your job from a social sales standpoint, put yourself position there and use confidence when delivering them. I got 12 guidelines to success. You can Google them if you want. It’s my 12 guiding principles. And one of them is confidence overcomes most shortcomings, except for an ego. If you have an ego, there’s not much I can do for you, right? But if you have confidence, you can pretty much get to wherever you want to go.
John Barrows:
But there’s a fine line. It’s the same thing with the… There’s a fine line between being direct and being rude, big difference, right? The same thing with ego and confidence, there’s a fine line between ego and confidence, but a huge difference. You gravitate towards confidence. You run away from ego. And so I think that confidence, and that’s why you have to practise pricing, that’s why you have to practise. That’s why you have to go look at your customer base and say, “Who’s paying?” I mean, there are people out there, there are customers that are paying close to rate card for you, and they’re getting a lot of value out of your organisation. And so why is that? I’ll give you one more example here. Like, LinkedIn was having a hard time. I was training them a while back. And LinkedIn’s number one competitor is LinkedIn, right?
John Barrows:
I mean, you said like, “Why would I pay for LinkedIn when I get 80% of it for free?” And that’s an objection they get every single day. And these reps just beat their head up against the wall. And it’s like… And I was sitting there as I was training them because they were like, “Yeah, that’s the one we’re having the hardest time with us. All right. Cool. Let me ask you how many companies are paying for LinkedIn? Like, spent the money for sales, navigate all this other stuff.” And they’re like, “Give or take $30,000.” I go, “So there’s your answer? Well, why should I pay for LinkedIn? I don’t know. Why do 30,000 other customers pay for LinkedIn?” You know what I mean? And that’s immediate.
John Barrows:
They ain’t stupid. They’re paying money for it. They’re getting value out of it. And what it does is it pushes it right back on them to say, “You know what? I don’t know. What do you think?” And to me that confidence and how you present and the confidence you have in your solution is half the battle, man. So that’s why I say you got to practise it and you do have to… Hey, your company didn’t come up with your pricing by just throwing shit up on a wall. You know what I mean? Like, “Okay. Let’s see what we should price this at and see how it flies.” Like, there’s profitability in there. There’s R&D in there, there’s customer support in… You know what I mean?
John Barrows:
There’s all these things in that pricing that make up why it got to that point. And so understand that, you know what I mean? And be able to articulate that. Everybody knows that there’s pieces in there. And then one last thing, when it comes to pricing as far as confidence is concerned, and we can dive into this which is… I think everybody should have a walkaway line, which is there’s a certain point where you won’t go below. And what that does is that makes negotiations very objective, because too many people get very emotionally invested in negotiations, right? We all have a line in our head where, like we’re giving a… And this is where I go back to give and gets, right? We give and give and give and give and give, and then we’re giving and we’re giving because we want that business.
John Barrows:
But the problem is that there’s a point whether we recognise it or not subconsciously, there’s a line that once it goes past that line, we start getting ordinary. We’re like, “Okay, this isn’t fair anymore. So now I’m a little bit shorter with the client. I don’t respond as quickly to them,” those type of things. And then it just unravels. But if you walk in with a walk away line and say, “Okay. Look, if it goes below this line, it just doesn’t make any sense for us to do business together.”
John Barrows:
And that’s where to me, that’s my favourite close if you talk about closes, it’s called the walkaway clothes. I use this example, like most… I’m a degenerate gambler, okay? I suck at it, but blackjack, right? So by the way, here’s my new business cards just to prove it, check those out. These things are awesome. Yeah. But anyways, what blackjack cracks me up, right? Say you’re sitting at a table and the dealer shows seven and you get 16. What do you do?
Will Barron:
I’ve literally no idea. I don’t know whether that way. I’ve never played blackjack in the whole of my life, John.
John Barrows:
All right. Well, the goal is to hit 21. 16 is literally the worst hand you can get, right?
Will Barron:
Yeah.
John Barrows:
Because it’s always this emotional decision, right? Because especially if the dealer shows seven, you have to assume this dealer has 17. And so you have 16. So you’re like, “Ah.” Hit or stay. Now, the book says hit. If you read black check and you study it, the book says hit every single time. I don’t hit every single time. But what happens is reps will sit there… Oh, I’m sorry, reps. I’ll be sitting at the table gambling. And all of a sudden somebody will sit down next to me. And it goes around whatever dealer shows 17, they get… No, dealer shows seven, they get 16 and, “Oh, son of a bitch.” And like, “Oh, shit.” You know what?
John Barrows:
And they start looking around and pretending like they’re counting cards. And they’re like, “Oh, there’s a lot of face cards out here. So I don’t know, hit.” And then they bust and they get all pissed and then it goes around again. And then it comes up, it’s like, “Ah, 16 again. So of a bitch. A stay.” And then the dealer wins and then they get all. And it’s always this emotional thing. For me, I don’t hit on 16 every single time. I don’t stay on 16 every single time. But for that shoe, I hit on 16 every single time. You know why? Because I don’t want it to be an emotional decision. So, it’s the same thing with negotiations. Like, there’s a line that once I go into negotiations, once it goes past that line, I’m like, “Okay, it doesn’t make sense for us to work together at this point. So good luck with everything. And I’ll see you if you want to reengage, please let me know.”
John Barrows:
And that just makes things so much easier from a negotiation standpoint. The whole thing about negotiations, right? Is about give and gets. And the equality of those give and gets. The problem is sales reps, we are givers, right? We give and give and give and give and give. And we don’t get very much in return until the end. And when we do that or we don’t try to get anything in return until the end. And because we feel like, “Hey, we’ve given you all this stuff. Now it’s my turn.” Right? But the problem with that is by doing that, by giving, giving, giving, giving, giving, and not getting anything in return, we actually have conditioned the prospect in two ways.
John Barrows:
One of them we’ve conditioned them to treat us poorly. This is why sometimes they don’t even have the common courtesy to call us back at the end of that conversation, right? Because why would they? There’s no respect in this relationship. The other thing we’ve done is we’ve conditioned them to keep asking for things. This is why they keep asking for discounts. They keep asking for more time to make a decision. They keep asking for extensions on trials and those type of things, because we haven’t stopped them. And so the idea of effective negotiations, and this is really literally my negotiation training is you line up all the things that your client gives, all the things that your clients want from you. Here’s a tip. Everybody at home can do this coming out of this training. This will probably be the big nugget you can take out of today’s podcast here, is literally brainstorm every single thing you could possibly imagine, right?
John Barrows:
What of the things that your clients ask of you? They want information, they want discounts, they want trials, they want extensions on trials. They want on bigger discounts, they want better terms, all these things, right? And line them up. What it say those 20 things on the list? One is super easy to give away, right? So something like send me information. 20 is really hard to give away. Something like a really deep discount or whatever. And then flip it over and say, “What are the gets? What do we want?” Right? So we want a meeting with power. We want a timeline, process. We want a signed contract, testimonial, all these things. And then you line that up early to late. Early on I want a 15 minute qual call, late on I want to sign contract.
John Barrows:
And then you match them up. So effectively when somebody asks for a five, I’m asking for a five in return. Somebody asked for a 10, I’m asking for a 10 in return and we score deals. I gave away a 1 or 5 and a six. I got a 2 or 4 and a seven, that score 12 to 13 tells me how healthy the deal is. The more equal the deal is, the healthier it is. And that to me, puts that objectivity into the sales process so that the more up… Let’s put it this way, the more objectivity you can put into the sales process, the better off you’re going to be. The more subjectivity, that’s where you’re in trouble. Because now it’s all about emotions and feelings and all that other stuff.
The Salesperson – Customer Relationship Needs Clear Give-and-Take · [37:58]
Will Barron:
And we’ll wrap up with this, John. I love that. And that is a formula that in my analytical brain and the way that I sell analytically, just the way that I’m programmed, that makes total sense. Let me just play devil’s advocate here slightly. Should we rather than line up a five over five, should we give them a little bit more than what we take or is that just down to… Because there’s plenty of people out there. There’s plenty of gurus, experts or pushing this at the moment that we should always give 51%, take 49% and be outcome independent and all this stuff. And it’s one thing to say. It’s a totally different thing to put it into practise for a sales rep. I’m very passionate about that, but should it always be equal? Should that be the goal that we’re aiming for with this?
John Barrows:
Well, I mean, I think it depends on what you mean by equal, right? I mean, 15 to 15, 30 to 30 all the way through. Absolutely not. You know what I mean? There’s an ebb and a flow to it.
Will Barron:
We’re going for net-nets out of… When the deal comes together, it’s a third deal.
“Negotiations isn’t about winning and losing. Negotiations is about both walking away with a mutual agreement here. If somebody wins and somebody loses in a negotiation, that’s a bad negotiations.” – John Barrows · [39:06]
John Barrows:
Yeah. And it’s in relative equality, if you will. Right? Yeah. I mean, ultimately it’s not about winning, right? Negotiations isn’t about winning and losing. Negotiations is about both walking away with a mutual agreement here, right? If somebody wins and somebody loses in a negotiation, that’s a bad negotiations. And so, I think it’s all relative. Now don’t get me wrong. Like, when we score… I score my deals, okay? I’ve won deals before that have been 112 to five, you know what I mean? Or vice versa where all of a sudden, some Bluebird comes in, some client calls me up and says, “Hey, John. I heard about your training from so and so. We got a team. We’re growing like a weed. Come on in here.” And it’s like, “Holy shit.”
John Barrows:
You know what I mean? I didn’t do any qualification. Like they knew what the cost was and they came in. On the other hand, there’s been times where I’ve been getting my kicked on a deal and all of a sudden, what it came through. For whatever reason at the end of… Whatever. So, it’s really what it is that scorecard that we put together is really just a mirror to your gut. So, it’s like your gut’s telling you what deal’s good. This puts an objective mirror up there and says, “Okay, are you close?” That’s really what you’re trying to do is make sure you’re close right? 51 49. I don’t really give a shit about what the actual number is. Just to make sure it’s not like this.
John Barrows:
And if it starts to get like this… I’m sorry. If it starts to really get away from you, what you want to be doing is trying to figure that out sooner rather than later. So you’re not trying to play catch up at the ends, because that’s where it really starts to bite you in the asses. A lot of reps think negotiations starts when it comes to price. I’m telling you right now, if you think negotiation starts with price, I guarantee you you’re using discounts to close your deals. Negotiation literally starts from the minute somebody says, “Send me information.” And there’s actually a psychology component to this. Have you ever read the book… And I think I recommended this last time, but you ever read the book Influenced by Robert Cialdini?
Will Barron:
Yeah.
John Barrows:
Okay. So in there, he talks about the rule of reciprocity, right? It’s actually a human condition where as human beings, we are all bound, even driven to repay debts, right? So when somebody asks you for something, there’s a fleeting moment that you actually feel obligated to give them something in return. And if you ask for it right then and there, it’s actually quite easy for them to give you. So when somebody asks for something, but there’s an imediacy to it, right? So when you ask me for something right now, even if it’s something as simple as send me information. If I ask you, “Oh, sure. Happy to send you information. When you want to schedule a brief 15 minute qualification call so I can follow up on that information, see if it makes sense for us to take the next steps.” Right?
John Barrows:
“Hey, next week. When next week? You got your calendar in front of you, type of thing?” It’s so much easier to get it right then and there than it is to get it next week, right? Because usually send me information is something like, “Send me information. When do you want to follow up? Next week. Fantastic.” And then touch base, check in, touch base, check in all week next week, right? It’s the same like move, like here’s another example. Say, have you ever had somebody ask you or have you ever asked somebody to help them move? One of the worst things I think you could ever ask anybody to do in my opinion, right? Is ask them move.
John Barrows:
Because it’s always in the dead of summer, the dead winner and some triple deck or piece of shit apartment or whatever. And you break your back, spiral, staircase, whatever. And so say you go help your friend out and you help him move in. You break your back, all that. And then like a month later you got to paint your apartment, right? So a month later you go back to your friend and say, “Hey, you know what? Remember like a month ago I helped you move in and all that stuff. And you might help me paint my apartment this weekend?” What’s the answer usually like a month later, right?
The Rule of Reciprocity and Handling Negotiations · [42:30]
Will Barron:
Well, the weird thing is with that is that I wouldn’t ask for… I wouldn’t say, “Hey, a month ago, I did this for you.” I would just assume that if I make an ask now that they’re going to repay me, but it’s very likely that they’ve forgotten that you’ve helped… Not literally forgotten, but the moments has passed that they feel like they want to give back to you. And so they go, “Well, I’m busy that weekend.” And then the cycle starts again. And it is just stop start.
John Barrows:
Exactly. You won’t say like, “Hey, remember I did this,” but to your point you assume, right? And that’s what a lot of sales reps assume. “Hey, I did all this shit for you. I did an ROI analysis for you. I wrote a presentation for you. I gave you 15 versions of this proposal. I gave you a trial. I got you 15 extensions of the fucking trial. And now it’s my turn, right? Now it’s my turn.” But that’s the wrong way of looking at it because they don’t remember all that shit, right? So let’s go back to the moving example. So say you’re going to paint your apartment in a week and somebody comes up to you this weekend and says, “Hey, John. Help me move in this weekend.” I says, “Yeah. Sure, no problem. Hey, you know what? A couple weeks I’m going to be paying my apartment. You mind help me out then?” How much easier is it to get that person to say yes right then and there?
Will Barron:
Yeah.
John Barrows:
So it’s the same thing when negotiations. It’s like, there’s an equality to it. When somebody asks for this and now there’s quid pro quo by the way, which is, “I’ll do this for you if you do that for me.” And that’s a contentious way of dealing negotiations. The other way of handling it is the rule of reciprocity where the ideal state is you can say, “Hey, look, I’m thrilled to give you whatever you’re asking for. In order for me to give you exactly what you’re asking for. This is what I’m going to need in return from you.” So there’s a nice little… Again, I’ll go back to that champion conversation.
John Barrows:
Hey, look, you want discount? Okay. You know what? I actually do want… I really want to help you out. I want to get you the pricing that’s going to make you feel comfortable with this. I’m going to have to go fight for you internally on this one on my end to go get you that discount. Let me ask it. If I fight for you internally on my end and go get you that discount, will you fight for me internally on your end when it comes time to making this decision?” Give get, right? There’s something there where you can… There’s a flow to it where it’s a lot more natural to do it this way. You know it as well as I do. And so does all your audience here, the best relationships that anybody’s ever had personally and professionally are the ones that are the equal ones, right? The one that there’s respect there. The ones that are unequal never work out right. Whether they’re customers or significant others or any of that stuff, there has to be some quality there. And that’s what I drive for.
John’s Advice to His Younger Self on How to Get Better at Selling · [45:21]
Will Barron:
Yeah. It seems like if I had to sum it up, we’re aiming for a partnership here as opposed to a checklist of this and that, and tit and tat and going back and forth. And you can almost then, you don’t have to assume the other person’s almost looking out to repay whatever debt they’ve got themselves into by the help that you’ve given them. I think that partnership in business is the best way to sum it up. And with that John, I’ve got this final question. I’ve asked you before, mate. So I’m going to ask you again, and that is if you could go back in time as speak to your younger self, what would be the one piece of advice you’re given to help become better at selling?
John Barrows:
Yeah. I mean, I’ve said this before. I go back to split testing. I’m going to give you two because I gave you this answer before, but I do want to reiterate it because I think it is that important. I think split testing AB… Split testing everything you do is one of the biggest things that you can do to be successful. And I wish back in my early days when I was doing so much activity, right? Again, I was making $400 a week to get eight meetings a month, right? I had a 0.5% conversion ratio and I felt like the elevator pitch was it. So I just perfected my elevator pitch and I set it until my ears bled. Looking back on that, if I had come up with four different approaches and made… Instead of making $400 with one generic made a hundred, hundred, hundred with four different approaches and started to pay attention to those like that, I would’ve gotten a lot better, a lot faster.
John Barrows:
You can do this with everything, right? Objection, handling. Write down the objection, come up with two different approaches to it. Next 10 times, deal with it this way. Next 10 times deal with it that way. So, I want to reiterate that. I know that’s the one I said last time. The one I really do want to impart, just share with the audience this time is something I just talked about recently which is, just stop doing what you’re supposed to. For a while there in my career, I did what I thought I was supposed to do.
John Barrows:
I sat and did for two years. I was in this role then two years in that role. And it never really felt right to me a lot of times. Like when it didn’t feel right, I’m like, “This doesn’t make a lot of sense. Why I’m supposed to…” But I’m going through me, like this is what I have to do. And when I stopped just going through the motion… I guess it’s also ties to going through the motions. A lot of us just go through the motions. We show up to our job, we make the 50 dials like we’re told to or whatever, we send out our activities, we do our forecasts and we just drone through. If I could go back and tell myself something, it would be to pay attention and don’t always do what you’re supposed to do.
John Barrows:
If you feel like what you’re doing is right. And you’re doing it for the right reasons, approach it your way. And then prove, bring data back to your manager or somebody like that saying, “Hey boss, I did it your way. And I tried it and this is what the results were. I spent a week doing it my way, and this is what happened and look at these results.” You know what I mean? I think this is a… Right? Again, I go back to the activities that you do for a day to day job. Whether you want to jump out into entrepreneurship or stuff like that. I mean, one of these days, well, I’m going to flip this over and interview you because I want to talk about what made that decision for you to say, “You know what? Screw the corporate thing. I’m going to do a startup. I’m going to do a podcast. I’m going to do it a different way.” Right?
Will Barron:
If I tell you that for me, it wasn’t… We’ll wrap up this John because I’m conscious time in, mate but it was one scalability and how rapidly I could get to becoming somewhat financially independent, which is important to me. And then the other side of it was that I just really wasn’t enjoying medical device sales by the end of it. The boss I had, he was a good guy but I’ve thought about it on the show before he just had a kid, he just had a massive extension on his house. He’s a better salesperson than he was a sales manager and all this stuff compiled with me hitting target, but still getting moaned at every single moment of the day. So I wasn’t enjoying it.
Will Barron:
And I’ve just always had this… And I think a lot of sales people do. I’ve always had this itch to own something that is just as valuable to me. And this is probably due to underlying psychological issues that a therapist could probably solve, but having ownership and having total responsibility or something was important versus knowing that I could just go to the same job every day and go back and forth. And one final thing on this, have you seen that new video? Well, new-ish video that Casey and I start put out of. It’s called, “Do what you can’t.”
John Barrows:
No, I haven’t seen that.
Parting Thoughts · [49:22]
Will Barron:
I’m going to send you a link to that. I’m going to link it in the shows to this episode. And I think that sums up a lot of what you just described there and appreciate that. And with that John, tell us what we can find out more about you and then your online learning platform as well. Because there’s a shit tonne of great content in there. And I think the audience… There’s real potential value. And if they’ve enjoyed this show, they’ve enjoyed your insights, they and enjoyed your take on things, clearly that’s the next step for them.
John Barrows:
Thanks, man. I appreciate it. Yeah. I mean you just go to jbarrows.com. So J-B-A-R-R-O-W-S.com. All of it’s there. I got a resource library that has probably 120, 30 pieces of content on there that are mostly free. And then I do have my online portal that is the exact training. Is focused on prospecting, but it’s the exact same training I give to Salesforce, LinkedIn, all those companies. And it’s what they used to do their onboarding. So there’s that. I’m starting to play around with Facebook live. So if you go to facebook/jbarrows, I got my Facebook page there. I’m starting to play around with Facebook live. I got to make it happen Mondays, every Monday from 12:30 to one o’clock east coast time here.
John Barrows:
And then Snapchat, obviously I’m still doing that. I answer tonnes of questions on Snapchat for reps who just have quick, “Hey John, thoughts on this, whatever.” I hit those up. It’s John M as in Michael Barrows. Yeah. And then there’s the LinkedIn and the Twitter stuff too. So, I’m trying to share as much content as I can. Much valuable content as I can and package it in a way that reps can get bite size digestible nuggets that they can go out there and execute as quickly as possible with. So appreciate it.
Will Barron:
Good stuff. Well, I’ll link to all that and assurance to this episode of thesalesmanpodcast.com. And with that, John, again, mate, thanks for the conversation, the insights. Thanks for getting… If we went down a lot of rabbit holes of this one, I’m sure we could have gone down into the psychology of it even more so if we had more time, so I appreciate that. And I want to thank you again for joining us on The Salesman Podcast.
John Barrows:
Awesome. Thanks, Will. I really appreciate it. Have a great day everybody.
