When negotiating, it is a given that you want to get the most favorable deal on your end. But even when chasing for the best end-result, your negotiation tactics must never undermine your worth. Business negotiator Chris Voss sits down with Michelle Weinstein to discuss the right way to integrate empathy in your transactions. He explains how sticking to your prices will allow you to avoid the annoying, lame, and frustrating clients that will not do you any good. Chris also shares strategies when straightening out transaction errors that could ruin your reputation and credibility, as well as setting the proper boundaries and deadlines on yourself.
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Integrating Empathy And Personal Boundaries In Your Negotiation Tactics With Chris Voss
We have a very special guest. Our special guest was the Lead International Kidnapping Negotiator of the FBI, as well as FBI’s hostage negotiation rep for the National Security Council and a lot of other stuff. He is also the author of Never Split The Difference. I’m sure you have heard of him in a few other places before. He had 24 years at the Bureau. He is trained in the art of negotiation, not only by the FBI, but Scotland Yard and Harvard Law School. He translates all of this into the business world, which is why he is here.
Before we dive in, I want to make sure that if your accounting practice is not where you want it to be, and you feel that the whole sales process, you feel like you’re a nag, you’re pushy, you annoy people. Then this is where a lot of accounting clients come to us when they’re feeling frustrated and stuck. If that’s you, what I found is that you’re probably not charging enough and not what you’re worth, and you probably are missing a solid sales system with your accounting firm. Having this information of having the confidence to position yourself as the expert, get consistent high-quality referrals and have more clients say yes to you, we’re actually going to talk about how you want to get rid of 20% right out the gate. Then I am offering you a free coaching session so I can share this information with you. If you want to build your firm, have confident sales conversations with ease where you don’t feel like you’re bothering someone or being too pushy, then what I recommend you do is go to TheAbundantCall.com, and book your first slot and see if you’re committed to having the abundant life and firm that you’ve always dreamt of, and spend more time with your family and relaxing instead of working so much.
Welcome to the show, Chris.
Michelle, I’m happy to be here.
It’s probably been about a year in the making of scheduling this and making it happen. I’m excited to have you here on the show, talking all things sales negotiation. I know we’re going to probably talk about empathy and a little bit of your background. For all of those who might be reading and don’t know you, can you share who you are?
I was the FBI’s Lead International Kidnapping Negotiator, retired FBI hostage negotiator for many years. Myself and my son, Tahl Raz, wrote a book called Never Split The Difference: Negotiating As If Your Life Depended On It. It’s a business negotiation book and it has been leading the business negotiating category pretty much since we put it out a few years ago.
I have that as reading material in all of my classes that I teach with accountants now. That is their first book that they get to read. I have a bunch of questions and a lot of them will be related to service-based businesses and how we deal with all these things that come up. I think a lot of people, especially this last year 2020, have had a horrific a year and people are trying to back out of deals, people are trying to renegotiate. A lot of small businesses have been hit. We focus on the small business. This is negotiating price, which is one of my favorite topics, negotiating prices where smaller companies don’t get a break. You might be working with a bigger insurance company or a bigger whatever company, and they want to negotiate on price. These smaller companies need it, but they’re small and they pay the same amount as the big guys. What would you do in that instance?
I’m going to throw the first commercial out here. Subscribe to our newsletter, our blog, go to BlackSwanLTD.com. On the upper right-hand corner, we’ve got a blog called The Edge. We talk about this a lot. There have been a lot in negotiations and renegotiations over the pandemic and what’s coming at us in 2021. In the event of some stuff that I missed, please subscribe to the blog because we’ve got past articles there about negotiating on a pandemic, renegotiations, all that stuff. The first thing I would say, all business owners, never cut your price. If somebody’s testing you on price, I’m presuming that you overdeliver. Where we’re starting from this point is the presumption that you’re an integrity-based business and you’re a phenomenal price at your full price. You overdeliver and your price is actually a bargain. When we overdeliver, our price is a bargain.
It’s very typical. I work with accountants and they not only overdeliver, a lot of them give away a lot of information for free.
It’s a secondary issue. Our premise is you’re worth your money, you’re worth more than what you’re charging. You’re going to get that, somebody is going to put push back on your price because they’ve got a budget problem or because they’re testing you. You’ve got to know which one it is. Don’t give in. You’ve got to suss out the situation a little bit. Price is not the issue. The issue is value. The first response if somebody pushes back on your prices, what we refer to as a label, and it would be simply to say, “It sounds like the value isn’t there for you.” How they respond to that, that’s a very specifically crafted state. It’s not a question, it’s a statement. It’s designed to trigger contemplation in an unvarnished answer from the other side. Your diagnosis of their answer is going to give you a good feel of what you’re dealing with. The other issue too is if this is your first interaction with them, if they’re really pushing you on price, you’re competing bid. You’re the fool in the game. There’s an old saying, “If you don’t know who the fool in the game is, it’s probably you.”
Twenty percent of these new opportunities are fool in the game opportunities, your due diligence, your competing bid. Some people refer to this as the rabbit. Your only job is to drive the price down on the favorite. If you’re the fool, there’s no reason to cut your price. If you’re the favorite, there’s no reason to cut your price. You don’t respond to the price. You’ve got to diagnose where the other side is coming from. The statement that I gave you, “It sounds like the value is not there,” and you say it just like that.
Calm, collective and in your DJ voice.
That’s the late-night FM DJ voice. It’s soothing and gentle. It’s not accusatory. You could also throw it at them another way. I would encourage you to experiment this. You could say, “It sounds like the value is just not there.” There was an intentional upward inflection on the last word, and that hits the brain in a very different way. Either way, it’s not accusatory. It’s not challenged. You need to tap into their brain, give them a stream of consciousness. A much better approach to use is give a question, and you’re going to get an indicator from them where they are with what they say. That’s your first move.
The second move?
How are they going to respond?
Let’s say they respond, you say to me, “This doesn’t seem like you see the value,” you can say, “Your price is too high. Do you have anything for the little guys?” This is a small business owner who use the services like Thomson Reuters and other big subscription companies where a big accounting firm might be paying the exact same price as a one or five-man show.You're worth your money, and you’re worth more than what you're charging. Click To Tweet
Let’s go back with a little role play.
I love role-playing. It is how everyone learns.
It’s scripting. Sometimes we hear the dialogue a few enough times so we can start to put it together for ourselves. I’m going to give you the label again and you give me the answer that you gave me a second ago, “It sounds like the value is just not there.”
“Yeah. The price is high. I’m a five-man show, I’m not like those big companies that you work with.”
“It doesn’t sound like you want to actually proceed with me at all.” I’m going to tell you why I said that. First of all, you caught my mirror and you blocked yourself from giving me a longer answer. We’re trained in negotiation techniques. Very few people are not going to say more, but if they do say more, you’re pushing me hard for a price, so the chances that you’re going to go with me, if you’re really focused on price, you want a number for me and you want to drive it down and you want to run and take it back to the favorite. You want to drive them down. Here’s the next thing I’m going to say, “Our price is high. There are a lot of people out there that are really good at this. These are people you probably have a relationship with. Why do business with me at all?”
I love that question. You want to share what that is with everybody?
Hold on. If they can’t answer that, that’s a combination of two things. It’s one of the things that we call proof of life question. Are you the favorite or the fool? That’s the only time you should be using the why question at all. If they don’t answer it, you’re the fool in the game. If they throw it right back on you, you’re the fool in the game. We get this a lot of times. People say to us, “That’s up to you. You have to sell me. Isn’t it your job to sell me?” Now, you’re the fool in the game. You’re not going to get the business. There’s an old saying, “It’s not a sin to not get the deal. It’s a sin to take a long time to not get the deal.”
All of the accountants who are reading and have worked with me will tell you that they’ve wasted so much time trying to get new clients and deals. It’s like the amount of time they’ve wasted, in my mind like the opportunity cost of how much money they’ve left on the table. The amount of time that we waste chasing, or if it’s in this case using a software company, there’s someone else out there that might be able to support a smaller type business, versus going after the big guys for your information.
It’s scary to close the door on some people. Here’s the 20% figure. We started talking about proof of life. Many of your opportunities are fake opportunities, you’re the fool in the game. We probably started talking about this years ago initially. I ran across somebody that said, “That’s in Challenger Sale.” There’s a book out there called Challenger Sale. It’s got some interesting data in it. It tells you what you should be. You should be a challenger. It doesn’t tell you how to be a challenger. The challenger is nurturing like a great teacher, mentoring and nurturing, not confrontational. Challenging and confrontational are two different things. I love the fact that this book talks about you should be challenging. I don’t like the dialogue or the methods they use, but they make a good point.
They did a rigorous survey. They asked executives across the board, “How often do you engage with a service provider where you’re never going to give them the deal? You’re doing due diligence. You’re looking for competing bids. You’re looking to stay with the status quo, but you’re talking to someone that you’re never going to give the business.” The executive said, “About 20% of the time.” There is no way people are exaggerating how much they lie because they basically said, “How often do you lie to companies?” They didn’t exaggerate the 20%. They would have minimized it, so the numbers got to be higher than 20%. We think in some cases, the number is as high as 80%. Let’s say it’s only 20%. Exactly what Michelle was saying, give yourself back 20% of your day. How much more profitable are you instantly? You don’t have to change a thing. You’re dealing with the 80% that want to deal with you by knocking 20% off. You’re giving yourself an instant 20% raise. Think about that.
How many are overworked and you feel underpaid, and that this is an opportunity if you’re working 80 hours a week, which I hear from a lot of people and even just general entrepreneurs. “I’ll sleep later when I’m not so busy. I put in 60, 80, 100 hours a week.” I’m like, “Isn’t sleep the most important thing? What if you could actually sleep and rest and come to the negotiations with a clean head, and be able to think clearly instead of being in a cloud, frustrated and furious and pissed off?” It is scary to say 20% of the people coming to you. We feel like we need all the business. We can’t say no to anybody. We have bills to pay. We have employees to pay. We have rent to pay. A lot of people on the other shows are Shark Tank veterans, “We all pitched on Shark Tank,” and that was the thing. It was like, “We’ve got to keep going. We have to keep grinding. We can’t take a break.” What do you think are some tools or ways for someone reading who is like, “It is scary and terrifying?” How do you turn them away where you’re not the fool?
First of all, this is really scary for a lot of people to start out with. Here’s what I ask you to do. Start tracking your interactions, and that’s going to make you smarter. You might not be keeping your statistics, but start tracking the interactions between how many you engage with and knows you close. Patterns are going to start jumping out at you. Are you close in business? Depending upon how they answer. Make your pitch, do it the old way. See how much time you put into them and what percentage of them you close. The other thing they could do is they’d say, “You’re X, Y, Z.” They start giving you the parts of your value proposition that you bring to the table. When they do that, you’re not the fool, you’re the favorite, which again you do not cut your price. Keep track of the people that immediately shoot back to you with the reasons they’re doing business with you. Start keeping score.
There’s something called the Hawthorne Effect. It says that anything you start keeping score on, you automatically get better. There’s something about human nature keeping track. You get more focused, you get more effective. You start noticing what makes you better. You don’t even need any instruction to start keeping your numbers because you’ll be focused more on what does well. You will find that those that tell you the parts of your value proposition that are important to them, you’re going to close a very high percentage of it. Those that fail in one way or another, you’re going to close a very low, if non-existent, percentage of those. Start asking yourself how much time you want to waste on us.
One more thing here. If you’ve worked on your value proposition, your elevator pitch, your sales pitch, or you’ve got that baby loaded up and you want to go, let’s say you get ten points on that and they gave you three. This is not the opportunity to go on about the ones they didn’t mention. I’ve seen people respond like, “This is perfect. This is an opportunity. What else do you bring to the table?” No, because when you do that, from their perception it’s like you dismissed what they said and you’re going on about what’s important to you. It’s no longer about them, it’s about you. It’s very self-centered to do that, I’m sorry. Focus on what matters to them and stick with it. When they ask you to cut your price, you say, “How can I provide those things of value that you listed if you make it harder for me to do business with you? How am I supposed to take care of you in the way you want to if it’s not profitable for me?”
“How am I supposed to stay alive?”
If you’re going to provide value to them, this is a fair exchange of value. This is more than fair because you’re overdelivering anyway. If they still don’t want to make the deal, these are not people that are going to help you put your family in a better house, give your kids a better education, give yourself a better life. You don’t have to slash your wrists for people that are not dedicated to your success.
Those are the 20% that need to go, so you can have more either time or revenue by focusing on the 80% that will drive the new 20% on your top revenue.
Fire people who do not want to pay.
What about the people that are pushing your boundaries? This segues really good. We all deal with that every single day. We’re constantly tested, and for me I’m really good at this. I deflect them fairly quickly. I think accountants in general or other bigger businesses that have a product-based business, we’re dealing with these people that are pushing our boundaries and they slip over. They get into that 20%, even though you should have declined them, you should have said, “It doesn’t seem like you see my value or it doesn’t sound like this is going to be a good fit.” You’ve done all that but then you still let them in. What do you recommend people do for the people that push our boundaries? I truly believe in the world of sales and increasing revenue and having more abundance in life. This is step number one, and not letting people get past your boundaries.It's not a sin not to get the deal. It's a sin to take a long time not to get the deal. Click To Tweet
We ultimately, politely decline to continue to do business. Every successful entrepreneur I know, ultimately gets to that point because they’re tired of blood money. They’re tired of stuff that ages them. As soon as they cross that threshold, the profitability increases, and even more important, the quality of life increases. It sounds horrifying, and you will get there someday. The sooner you get there, the sooner your quality of life returns.
Let’s give an example. I know you’ve got somebody that went through something like this.
The world of Joe Polish runs something called the Genius Network. Joe and I are good friends. We do business together. I become friends with people I do business with. That’s my sequence these days. I want to do business with like-minded people. If I can’t become friends with them, I don’t do business with them. We’re in a relationship. Anyway, Joe says there are kinds of people out there. They’re ELF and HALF. Half is Hard, Annoying, Lame and Frustrating. Joe also points out that the L in Half could also be Lucrative. We still don’t have HALF. We don’t do business with HALF people, whether they’re lucrative or not. ELF is Easy, Lucrative and Fun.
On certain occasions, somebody approached us and they want to do business with us and they look HALF. My son, the president of my company, Brandon, he’s a brilliant negotiator. He’s an un-official coauthor of Never Split The Difference. We’ve had a couple of interactions where he says, “These people are good pain in the neck.” My answer has been like, “What would turning them into an ELF look like? How would we do this to make it Easy, Lucrative and Fun?” We laid that out for them. We mean it, which means if they don’t want to be off, if they don’t want to work under the conditions that we think are off, we’re like, “Cool, we can walk away with a clear conscience. We’re not going to do business with you.”
You give them the opportunities too.
Give them a shot at it, maybe they want to know. Maybe they’re inadvertently proposing something to you that they have no idea is from your perspective a bad deal. We used to walk away politely. We’re at the point now where we say, “Here’s how this would be awesome for us. Here’s how it would be constructed so that ten years from now, we could look back on the past years and say, ‘It was awesome. We made a lot of money together. We did each other a lot of good. Here’s what this would look like.’” We also say, “If this doesn’t work for you, that’s cool. That means it doesn’t work for us and we’re going to go our separate ways. If you really want to look back years from now, this is what it would look like for us. We’d love to do it with you.” Everybody has the option to say no. We find that to be a very effective approach.
It’s better than just walking away gracefully. Also sticking to your boundaries. This is one of the questions that I got. I talk a lot about these topics, but I always love hearing it from your point of view and from all the experience and tools and the books. If you haven’t read the book, make sure to purchase it on Amazon, and make sure to purchase the masterclass while you’re at it. These boundary pushers, I think what Joe shared with you, if they’re an ELF or HALF, this is a great way for you to go, “Is this client an ELF or HALF? How do you reset the standards by sharing, ‘Here’s what would be awesome if this year we could turn it into X?’ If not, we totally understand that and we wish you nothing but the best.”
Boundaries begin to create predictability. Predictability breeds trust. A great way for you to have more trusted relationships with your clients is to start adding in predictability at a number of levels.
Let’s talk about that.
First of which is setting your boundaries, “I do this, I don’t do this. This works for me. This doesn’t work for me. I can’t do a great job for you under these bad circumstances and bad conditions. I can do a spectacular job with few hundred of these conditions.” That’s beginning to collaboratively lay some stuff out in a nice way, no boundaries setting. There’s an old phrase from the suicide hotline days and my hostage negotiation days, “Point of fact, people are reassured by knowing where the boundaries are.” They might test you a couple of times because they want to know if the boundaries are firm, but it creates predictability, and predictability creates trust.
I always say trust is everything in the foundation of a sale, having people you can have fun with and make a lot of money and be lucrative and make it easy. It shouldn’t be so hard and stressful. With the accountants that I work with, and some of them are reading, they know what I’m talking about. It’s like you feel like you’re trampled over, like you’re a body laying on the ground and people walk all over you. Or some people probably feel like it’s like walking on eggshells with their clients, “I can’t do that or I can’t say that because I’ve given away all this information for free. If I charge them X this year, they’re going to walk away.” In my mind, I’m like, “Isn’t that a good thing? They’re not an ELF.” I love the ELF analogy, and I think a lot of people can connect and relate to that. Was there a third thing for predictability that translates into trust by number one, setting boundaries, two, putting together collaborative efforts that each person commits to? If you give someone a task, they actually do it.
It’s the same silly, but set boundaries on when you’ll take calls. Don’t take calls on a weekend. Don’t respond at night. Many of you are really relationship-oriented. Somebody emails you 10:00 at night and you’re like, “I’ve got to respond. I want to show them that I’m there for them.” No, it’s not the behavior that you want to condition them that you’re going to respond at 10:00. You don’t maintain your best self for them by responding at 10:00 at night. Also, the more regularly scheduled your interactions are, if you’re taking care of them, if they’ve asked a question, let them know that you heard the question. If you don’t answer right away, “I got your question. Here’s when I’ll get back to you.” Give yourself extra time.
What do you call that when you you’re communicating the steps throughout the process and letting them know? A lot of people reading, and I’m sure you’ve dealt with that too, if your clients and the people you work with are clueless, they have no idea what’s going on because we’re not leading the ship properly. To have good negotiations in sales is to keep setting the expectations of what the client can expect.
Even the smallest things, it’s tremendously reassuring to the person on the other side. Don’t put short deadlines on yourself. It incenses me when somebody says, “I get back to you in 5 minutes, 15 minutes,” and they don’t make the mark. I hate that, and everybody does it. I’m going to take you at your word. If you say you’re going to get back to me in fifteen minutes, I’m like, “Cool, I can plan out my next fifteen minutes.” If you don’t do it, you start to condition the person that you’re not a person of your word, you’re unreliable. It’s crazy how often this happens.
How often does that happen to you?
It happened to me and I conditioned people right away to get out of it. If you don’t make the fifteen-minute mark, I’m not getting back to you. I’m not picking up the phone. I’m not going to answer the email. When I get the chance when I’m going to follow up with you, I’d say, “You said fifteen minutes. I set my watch by it, and you didn’t make it. I have no idea when you’re going to get back to me. I had other things I had to do. I apologize for taking you at your word.” You’ve got to let people know. The flip side is if you don’t know when you’re going to get back to him, if you’re thinking to yourself, “I don’t know. It might be an hour or two.” Give yourself more time than you need. We do this on a constant, regular basis. When we asked for more time than we need, what happens with the other side? We give them time back in their day.Even a millimeter shift is horrifying to most people when addressing mistakes, but that's the best way to deactivate the negatives. Click To Tweet
That’s the 20%.
You start giving people time back in their day. They love it. If I think it’s going to take me an hour to get you an answer, I’m going to say, “I don’t know that I can get back to you with an email in less than 4 or 5 hours.” When that email shoots in in an hour instead of 4 or 5, “This guy is on it.”
How many deals do you think are lost because of this? Personally, I work with a lot of accountants and they always have a challenge in this department. If you fix this thing, how many deals from your experience or negotiations are actually lost because of the loss trust from committing something they can’t keep a word too?
If you break somebody’s trust, you’re going to lose that deal or you took a big chunk out of the relationship and the end is coming soon. That’s an interesting question because it didn’t happen to us. I don’t know how to gauge that.
I didn’t know if there were any stats that you’ve heard or read in books, heard it from clients and people that have come to classes or in all the quarterly negotiations. I feel like this is such an easy thing, but I can’t even believe they do it to you. That’s shocking to me.
We are very pragmatic about our calendar that we don’t give people the opportunity to do it. Every now and then, something slips through the cracks and they hear about it from me. I don’t want to condition somebody that that’s okay.
A little tidbit for those reading because we haven’t talked about it. One of the things that I use a lot is instead of a fifteen-minute phone call, I have fourteen-minute ones that Brandon talks about. They actually respond, “I have fourteen minutes. I have one at 6:00 PM for you,” then at the fourteen-minute mark, I’m like, “Our time is up. If we need to extend it, we’ll rebook another call.” It’s amazing the attention that you get and that people see, and that they’re paying attention to the value of their time. Not only is it about our time, but the person that did that to you last week, they don’t even value their own calendar
Well done, that’s very nice.
That’s not an ELF.
Which one is not an ELF?
The person that would have disrespected your time. That’s actually the first boundary pushover, that’s a red flag.
It’s sucking the life out of you. Those people don’t last in our world.
They don’t last in my world either, but I just thought about that. I’m curious, do you have any more books coming out? What’s on deck for you? I know people probably asked you, I know my community has asked me, “What’s on deck?”
We have got a book coming out on the fifth anniversary of Never Split The Difference. We’re going to put out the book with the subtitle, The Missing Manual For Never Split The Difference. Since the book came out, we’ve learned a lot. We’ve got some tweaks, some pieces that we didn’t talk about in the book at all. It’s going to be written in primary voice. It’s a collaboration between myself, my son, Brandon, one of our businesses associates that helps coach our business, Jonathan Smith, John Virtue is going to be our writer from Scribe Media, but it’s in Brandon’s voice, Brandon’s point of view. We’re excited about this book and the impact that it’s going to have when it comes out.
How can they get early access to it?
If you subscribe to the newsletter, I’ll give you another way to subscribe. We’ve got a text to sign up function. You send the message, “Black Swan Method,” not case sensitive. Send it to the number, 33777. You will get a response text asking for your email. Sign up for the newsletter, which is free but better than that, it’s concise.
It’s really good, everybody. I read it, I take notes. I have a whole sticky note of notes whenever he’s done with the classes and everything. I still read it. It’s extremely valuable and useful. It’s not just your regular typical blog.
Thank you very much. By making it concise, there aren’t 50 articles. There’s one actual.
The things we’re talking about, the label ideas, the empathy statements, all of the, “What should I say?” when someone’s trying to back out of a deal during COVID. The actual statements from you, Chris, are written there. You could literally copy and paste, and start your own document. That’s what I’ve done. There are great ideas in addition to your own ideas to get you thinking in that way, because it is a different way to think.
Thank you very much. We script out as much as we can.
The scripting is super helpful. That’s great. Was there anything else for predictability which creates trust and anything else on the boundaries that you want to make a touch point on or cover that we didn’t talk about? I think that’s a good start.
I think we’re good, that’s a good start.Learning is the key to success in business. You just got to learn a little bit every day. Click To Tweet
Regarding errors and resolving conflict that follows. Let’s say you get a new client, you get a new deal, then there’s maybe a mistake that happened, an error or conflict, it could be something that a client made up and not true, or it could be an error that for example an accountant made, or maybe there was a price error and you said the wrong thing because you didn’t calculate your cost of goods sold correctly, if it was one of those situations. This comes down under conflict resolution after you get a client.
You deactivate the negatives by calling them out. You know what you’re afraid they’re thinking. You want to say, “I don’t want you to think this. I don’t want you to think that.” Instead of saying, “I don’t want you to think,” say, “You probably do think.” That 2-millimeter shift is horrifying to most people, but that’s the absolute best way to deactivate the negatives. You don’t get rid of the elephant in the room by saying, “The elephant isn’t here.” I don’t want you to think there isn’t an elephant in the room. There is an elephant in a room. The only way to deal with it is you call it out directly, fearlessly, calmly. If the relationship is repairable, that is the only way to fix it long-term, which is why you have to have the trust. It builds trust simultaneously. The interesting thing about these negotiation techniques that we’re talking about, hostage negotiators need to fix problems and build trust simultaneously. They’re all designed to gather information, to fix problems and to build trust all at the same time. What seems like an indirect method actually saves you a lot of communication time. It accelerates a process.
As we’ve experienced, because I’ve been on the suicide chat hotline, it saves lives. It’s amazing what building trusts can do in personal relationships and how it translates to the business in the exact same way.
When the other side has real problems they need to talk with you about, by building that trust, they feel like they can talk it through with you.
Do you have a real-life example that we can walk through to give them scripted things that you said before in a situation like that, where you’ve gotten into a deal or there was some new client brought on and you realized you made a mistake or there was a misunderstanding of sorts like a real case study?
I can’t think of anything specific off the top of my head. I’m sure we script this a lot for our clients who are fixing these kinds of things.
Let’s use one of their examples.
It’s just like, “What would you call out? You probably think I’m an idiot. You’re not going to like what I have to say. You probably think I’m greedy.” Make a list, or as we say, do an audit of all the ridiculous, sane, unfair, negative responses that they might have. Either they’re going to accuse you of doing it on purpose, which makes you greedy, or they’re going to think you did it by accident, which makes you stupid. It’s possible for people to have these simultaneous, contradictory accusations at their head, “Either you are greedy or you’re stupid. How could you be both?” As human beings, they’re going to harbor both of those thoughts.
We go after them right up front, “You probably think I was asking too much. You probably think I’m sloppy and I’m lazy. What’s going to happen is if the negatives are there, that is the best way to deactivate them and keep them deactivated. The crazy thing is you don’t plan negatives by doing that. You actually inoculate from further negatives occurring to them down the line. You’re proactive, pre-empting. That scares a lot of people because they’re saying, “I can’t do that,” they’re going to say, “I wasn’t thinking of that, but now I am. Thanks for bringing it up. I do think you were lazy. I didn’t think it before, but I think it now.” That doesn’t happen ever. What happens is if you said, “You probably think I was lazy and sloppy,” and they didn’t think those, they’ll say like, “No, you’re being a little hard on yourself.” That’s where you want to be. You’ve got a working relationship at that point.
How would you resolve the air after you called out the elephant in the room as an accusation audit? You list out your top 5 or 10 things that make you look like this idiot or that I can’t believe they paid you $20,000 for this project when really it needs to be $50,000. If you underbid or you miscalculated, a lot of accountants, the work that actually has to get done takes twice the amount of time, so they underestimated the fee on the frontend.
Here’s the hard part. We deliver what we agreed to deliver for the price that we agreed to deliver that. We may not do it again. Our reputation is so important to us that if we’re the ones that made the mistake, we’re going to eat it. They’re never going to get that price again. “I reserve the right to be smarter today than I was yesterday.” Ideally, we just learned and we’re going to change. Learning is the key to success in business. You’ve got to learn a little bit every day.
Not make the same mistakes of yesterday.
The learning organization beats his competition. That’s why I’m not the least bit concerned about anybody ever passing us by in terms of how good they are in coaching and negotiation, even the strategies, because we’re adding to them constantly. We are a learning organization. We probably know more about negotiations today than we knew a month ago. We’re so focused on it, we love negotiation. We love learning and getting better constantly. If we underbid something, which hasn’t happened to us that I can think of lately, we deliver because our credibility is our currency.
That’s pretty much what I tell them. Also, if we think something is going to be $5,000, just charge $15,000 for your services and you should be okay. I’ve learned the lesson of threes, but I don’t know if yours is different. For a project or a build-out or whatever, it always takes three times as long. It always costs three times as much as I’ve always thought in the past. I think a good rule of thumb is sometimes, like what we were talking about in the beginning, the value of our own self and our own time all come down to the value of your time and your calendar. If we can’t even get that right, then how are you going to get your pricing right?
It’s a good challenge and we want to be optimistic. This is a little bit about telling somebody you’re going to be there in fifteen minutes, when you’re not going to be there for 45 minutes to an hour. If you’re struggling with this, start keeping track of time right now. I will tell you, before you’re halfway through January, you are going to know your time. If you’re not keeping track, I’m with Michelle 1,000%, you’re going to underestimate it. To give you an example, when I was with the government and the FBI, time didn’t matter because we were going to get paid no matter what. We’d put massive amounts of time into our instructional blocks. I got into a private sector and somebody wanted us to write some instructional blocks. He said, “We’re happy to pay you for your time.” I said, “I’ve got to write this.” They said, “How long is it going to take to write?” I had no idea. I actually thought there was maybe 1:1 ratio. It maybe took me an hour to write an hour’s block of instruction.
For the fun of it, I googled it because you can google anything. I saw numbers that range from 20 to 80 hours. I thought, “That’s crazy. People are stupid. It’s never going to take that long.” I think we estimated it out of 10 to 15 hours, then we started keeping track. I realized that we worked so hard at constantly getting the wording right, at testing, that the 80:1 ratio was actually a pretty good ratio. If you’re not used to keeping track of your time, start right now. In short order, 3 or 4 weeks max, you’re going to understand and you’ll never make that mistake again.
While you’re keeping track of your time, you could also keep track of your interactions because that they go hand-in-hand. If you’re already tracking one thing, you might as well track two for four weeks, and that’s not a big investment of your time to see if your ratio is 80:1 or 10:1. The thing with errors and mistakes should pretty much go away on its own.
I’m here to tell you, assuming you’re overdelivering, your clients don’t want you to go out of business. You’re delivering a great product for them that’s essential to their operation. It does them no good for you to either go out of business or to have to fire them because you’re not able to deliver the service, which is enormously valuable to them. I’m here to tell you, you’re worth it and you’re entitled to it.
I always tell them that too. Chris, if you had to share your version or what your definition of abundance would be, what would it be?
We feel like we’re in an abundant world now, especially a couple of years ago when we started with no longer dealing with HALF people.
I love the HALF and the ELF. That’s great.
Joe brought it across and we’re living by that. We’re actually looking to do business with no more and actually far less than 20% of the people we come across.
You’re turning away 80% of the people that reach out to you?
Yeah, we’ll do a quick proof of life on, we won’t bother them. The business has accelerated phenomenally. In the COVID pandemic, we will end up making more money this year 2020 than we made last year 2019. All our business used to be in person. I can’t remember when the lockdown first started.
It was January because I was at your in-person last class, your first and last of 2020.
Ninety-five percent of our revenue streams got slammed and shut off. Because we have an abundant mindset where we don’t do business with everybody, and our good fortune was we were already virtual, so we didn’t have to pivot to running the company from a virtual platform. We run on a system called the Entrepreneurial Operating System, EOS. We pivoted and we’re making more money because we’re not willing to cut our price. We’re not willing to deal with Hard, Annoying, Lame and Frustrating people. The abundance mindset is a positive mindset. You’re 31% smarter in a positive frame of mind. We made the pivot and we didn’t hit our income target, but we made more money this year 2020 than we made last year 2019.
Is there anything else you want to share? Any last words of wisdom or advice with the audience? For everyone reading, you need to go and make a text “Black Swan Method” to 33777.
The last thing I want to say is you’re worth it. Don’t cut your price. You’re worth every dime you charge. You do not have to deal with clients that’s blood money. There are more than enough people out there that want to do business with you. Everybody that’s wasting your time or making it difficult to work with you is keeping you from the people that would love doing business with you. Do not let the HALF people keep you from the ELF. There’s more than enough of them out there. Give them a chance to find you by getting away from the Hard, Annoying, Lame and Frustrating.
Thank you so much, Chris, for joining us here. It was an honor to have you. I’m grateful for your time.
Thank you, Michelle. It’s a pleasure to be on with you. Thanks for having me on.
Thank you all so much for joining Chris and I together on another amazing episode. There were many takeaways, so I hope you had a pen and paper and took notes. If you didn’t, I’ll go through some of the highlights right now. I think one of the biggest things to think about as we embark on this New Year, because the last year 2020 pretty much sucked for a lot of people, is do you want to work with ELF or do you want to work with HALF? That’s probably the biggest takeaway that I thought of, and one that I’m going to put into place. The ELF is someone who is Easy. They make you a lot of money, so it’s a Lucrative relationship, and is actually Fun. A HALF is someone who is Hard to work with, Annoying, Lame and Frustrating.
If you have 100 clients, or maybe you’re working 10 referral partners, maybe go through and write down next to them, “Are they an ELF or are they a HALF?” The HALF, it’s time to say goodbye. Another big thing that he mentioned was that you can get back 20% of your time or 20% of your top line revenue by starting to say no to people. They’ve got 100 inquiries at the Black Swan group, they turned away 80%. They’re only taking the top 20% inquiries that come through to even work with on negotiations or work and take as clients. That’s pretty massive. My number has always been 50%. If I talk to 10 people, I only want to work with maybe the top 5. I guess I need to get to the 80% part. How can you look at the people contacting you or the annoying clients? How can you get rid of them quicker, so you can gain 20% either to your top line revenue, increasing your net income by 20% or reducing the amount of time you spend? My guess is that the bottom 20% actually take up quite a bit of time.
The other thing from what I took away is that I think everyone should buckle down for four weeks and start tracking your time. This is how you can see maybe how you’re underpricing, where you’re leaving money on the table, and tracking your conversations with people. For those of you that have worked with me, you know we track a lot of this stuff because if you have ten inquiries this week via email or phone, you’ve got to start tracking what’s going on with them, and seeing what is your current conversion rate? What is going on with these clients? Where are your interactions? How many engaged? How many closed? How many are lost at sea? If you have too many lost at sea, then that’s money left on the table too.
Also for those of you that want to get the new book, to reiterate, you want to send a text to 33777, and type in “Black Swan Method.” Then you’ll get the pre-order for the book and you’ll get the blog. The blog is extremely valuable. I actually save them. I read them and I have a whole notepad. I highly recommend each of you subscribe and check that out. Lastly, if you’re like, “Michelle, there is no way I can do this myself,” you’re not alone. Some of us need accountability in life, and we’re so frustrated and stuck that we’re sick of it. If you are sick of the way things have been going, and you’re sick of making mistakes and not charging enough, and you don’t have a solid system on how to do any of this, then head on over to TheAbundantCall.com.
If you’ve had a firm for at least two years, and you want to start feeling more confident in selling high-level services with ease, maybe start spending more time with your family and not working so much, and have the abundant life you’ve always dreamt of. We’ll talk about how to detach from the emotional side of the sales conversation. For those of you that want a paradigm shift, to see an objection as an asset, make sure to head on over to TheAbundantCall.com. We can explore what it could look like to possibly work together. I promise you, that one hour will open up a lot of missed opportunities for you. Have a beautiful day.
About Chris Voss
Chris Voss has used his many years of experience in international crisis and high-stakes negotiations to develop a unique program and team that applies these globally proven techniques to the business world.
Prior to 2008, Chris was the lead international kidnapping negotiator for the Federal Bureau of Investigation, as well as the FBI’s hostage negotiation representative for the National Security Council’s Hostage Working Group. During his government career, he also represented the U.S. Government at two (2) international conferences sponsored by the G-8 as an expert in kidnapping. Prior to becoming the FBI lead international kidnapping negotiator, Christopher served as the lead Crisis Negotiator for the New York City Division of the FBI. Christopher was a member of the New York City Joint Terrorist Task Force for 14 years. He was the case agent on such cases as TERRSTOP (the Blind Sheikh Case – Sheikh Omar Abdel-Rahman), the TWA Flight 800 catastrophe and negotiated the surrender of the first hostage taker to give up in the Chase Manhattan bank robbery hostage taking.
During Chris’s 24 year tenure in the Bureau, he was trained in the art of negotiation by not only the FBI but Scotland Yard and Harvard Law School. He is also a recipient of the Attorney General’s Award for Excellence in Law Enforcement and the FBI Agents Association Award for Distinguished and Exemplary Service.
Chris has taught business negotiation in the MBA program as an adjunct professor at the University of Southern California’s Marshall School of Business and at Georgetown University’s McDonough School of Business. He has taught business negotiation at Harvard University, guest lectured at The Kellogg School of Management at Northwestern University, The IMD Business School in Lausanne, Switzerland and The Goethe School of Business in Frankfurt, Germany. Since 2009 Christopher has also worked with Insite Security as their Managing Director of the Kidnapping Resolution Practice.
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