Episode Transcript
[00:00:00] Speaker A: I always looked at discounting in general as a cocaine laced crutch. It works, right? Until it doesn't, right? People get hooked on it.
[00:00:08] Speaker B: I was talking to a sales rep today who's like, hey, I feel like this person's going dark on me. Well, yeah, maybe they are because they, they've realized that that's a way to get you to come to the table and offer a concession.
[00:00:19] Speaker A: The better you are at that alignment, that value selling, the sort of making sure that you're selling the right value to the right customer or the right prospect, then you probably have to lean less on negotiation.
[00:00:31] Speaker B: When you lack this discipline, when you everything from your marketing to your sales approach, when there's exaggerations, when there's, you know, maybe very fluffy ROI numbers, when you are forcing the buyer to kind of haggle with you to get the best price, all of that erodes trust. It's not a partnership at this point point, it's. It's a very arm's length transaction where we are both incentivized to optimize for ourselves.
[00:01:02] Speaker C: Yo, Mike check. What's up everybody? You're listening to the Street Pricing podcast, the only show where proven SaaS leaders share their mindset and mistakes in pricing so we can all stop guessing and start growing. Enjoy, subscribe and tell a friend. Now let's break it down with your host and sought after slayer of bad pricing, Marcos Rivera.
[00:01:25] Speaker A: What's up and welcome to the Street Pricing podcast. I'm Marcos Rivera, CEO of Pricing IO. Today's guest is Michael Shields. He's the vice president of procurement at Tropic. Michael, welcome to the show, man.
[00:01:36] Speaker B: Hey Marcos, thanks for being here. Love your book. Love this idea of pricing. I have a lot of opinions about it, so it'll be fun to chat about this today from, from my vantage point, I think a little bit of a unique vantage point of view of being a procurement guy who, you know, has bought a lot of SaaS over the years.
[00:01:53] Speaker A: I don't get the perspective of procurement enough in my opinion, man. So I'm excited to hear your point of view. Real quick for the audience. Just give them a little quick about you and what you do.
[00:02:03] Speaker B: Okay. Awesome. Yeah. So all I've ever done is procurement. Going on, going on 17 years now. Started in the world of manufacturing, but you know, about, about nine years ago, started in tech, started in SaaS, and what I realized is those industries are very, very different. You know, I, I remember buying parts for like aircraft engines or space satellites. You could really come down to like what a price should cost, because you calculate the labor, the materials, and then you could add a gross margin. You come up with a should cost analysis. And then I moved to the world of tech, where, hey, what is the cost of a license? You know, and it's a very arbitrary number. There's a cost to cover your variable costs, which, by the way, variable costs are pretty. Pretty minimal. And then you have all these big, like, R D fixed costs, that sort of a thing. But anyway, so I've kind of carved out a niche for myself as. As being the procurement guy for tech companies covering all sorts of spend, but. But certainly looking at a lot of SaaS.
[00:03:01] Speaker A: Oh, yeah. And the one pushing back on the pricing, you are the. The boogeyman and all these AES minds, right? Like, how do I get past procurement? How do I get the. Yes, get this thing signed. So this is going to be a lot of fun to unpack, man. Are you ready to get street with me?
[00:03:15] Speaker B: I'm. I'm ready. The boogeyman's ready.
[00:03:19] Speaker A: Listen up, everybody. Quick roadmap for y'.
[00:03:21] Speaker B: All.
[00:03:21] Speaker A: This show is based on the book Street Pricing, right? And in my book, I have lots of stories, playbooks, things like that. But today, I want to really dig into what I view as an obstacle to capturing value for a lot of SaaS leaders out there, right? And we're talking about price variability, price transparency, right? If you ever wonder, hey, am I paying a fair price? Am I paying what the other guy is paying for the same thing? And on the other side of that, discounting and that discounting discipline. And whenever I see a lot of variability in price, meaning you're charging a whole lot of different prices for the same thing, that's usually a big red flag in my mind for a lot of reasons. But in your seat, Michael, you've seen a lot of price points come your way. You've seen a lot of deals discounting. I would like to start off with. Just tell me what you're seeing out there, man.
[00:04:08] Speaker B: Yeah, I mean, it's really interesting, right? Because, you know, first and foremost, I think there's this perception that you do not pay less price for SaaS. You do not pay. You know, there's this person, if I'm the bogeyman, and, you know, I would love to, like, you know, throw off that image, of course, but, like, it's. It's essentially because I've been trained in this notion. Like, there is this notion out here, especially in SaaS, that the harder you push, the better price. You get and think about that like if you are a go to market leader, what do you want? You want, you know, as little negotiation as possible. You want to focus on value and you want to focus on getting the solution in the hands of the right people. And by the way, the buyers want that too. It's like, hey, let's find the right solution and let's go. But unfortunately, you know, pricing's important. What you spend is important. Right now money is no longer free. Right. And so we know that, hey, there is variability oftentimes, not all the way, not all the time. By the way, sometimes you, you can push, push, push, you're not going to get anywhere. But then sometimes you can get a 50, 60, 85% discount. Right? And so what's really interesting is there's a lot of non value work required on both sides, which means buying cycles become longer, which means I was talking to a sales rep today who's like, hey, I feel like this person's going dark on me. I said, well yeah, maybe they are because they, they've realized that that's a way to get you to come to the table and offer a concession. Right. And I think that there's a better way, Marcos. And here's one last thing I'll say is that for a long time the pricing was unknown. My job was to get on a phone with a salesperson and try to assess how much flexibility existed.
Maybe I might call up a buddy and be like, hey Marcos, like this, you know, I'm thinking about buying the solution. Do you use them? How much are you paying? You know, you maybe have one data point. Yep. Now that's changing. Whether you like it or not, pricing transparency is going to increase whether the seller proactively makes it more transparent or the buyer has access to more data than they've ever had before. And so they probably know what is possible.
And when they see a proposal from you, they're like, how do I get this down? And then it becomes this non value added, painful negotiation.
[00:06:31] Speaker A: There's a lot to unpack there, especially this. The non value added pieces, the variability, the push to get the one data point now turning into multiple data points. There's a lot in there. A couple things let's start off with just putting yourself in the seat of a SaaS leader. Let's say that you're trying to hit quota, you're trying to hit sales. Oftentimes, especially towards the end of the quarter, you'll start seeing this behavior, like from the reps, like trying to hit that number for the quarter or for the end of the year, they'll start giving the concessions. And so procurement folks, stop me if I'm wrong here, because I'm just throwing this out here. Procurement folks start to pick up on that and they'll ghost you, like you were saying a minute ago, kind of wait towards that, you know, end of quarter timeframe or end of year timeframe, in hopes that you'll come back with a concession or better price and things like that. And so there's. There seems to be on both sides. Everyone knows the game, right? Like, who's more desperate, who's more motivated to sell or buy in that struggle. What do you say to maybe both sides of the table? What do you say to the seller in terms of how do you mitigate a lot of that and not fall for that trap? What do you also say to the buyer so they make sure they get a fair deal?
[00:07:40] Speaker B: Yeah, this is a really tricky one. You know, it's a hockey stick phenomenon. If you've seen, like, the percentage of deals that are signed the last week, the last two weeks of a quarter can. Can be as high as 80, 90%. So what that means is, like, if there's, you know, 12 weeks and a quarter, the first 10 weeks, no deals are coming through. Those, those infosec resources, those legal ref resources, those deal desk resources. I'm not just saying they're sitting around, but like, it's kind of a, you know, a fixed cost, you know, capacity model. And yet you're. You're putting this massive strain because you're exactly right. We have been trained. In fact, it's exacerbated when 9 out of 10 SaaS deals I work on, you do the demo, you get to the pricing stage, and they are the ones who bring it up. They say, hey, we have. Here's your pricing. And, oh, by the way, it's contingent upon signing by the end of the quarter. It doesn't matter. Like, if you were thinking you were going to buy a month from now or two months from now, there's this pressure. Well, the buyer hears that and they say, oh, wow, Marcos really wants to close this, buy the quarter. And then they're like, I wonder what else I can get from that. So even though the seller was trying to put the urgency on the buyer, a lot of times the buyer will turn it back and weaponize it on the seller, if that makes sense. But yeah, so it's this big artificial and inefficient method. And so I really think that you Know, we need to kind of move away from that in general. I think here's, here's a very high level solution that we can break it down, but you need to balance the short term victories versus the long term aspect. Right? Because when a buyer knows that, hey, they want to close it in the end of the quarter, you are going to end up having to get concessions that you maybe would not have otherwise done if you would have been okay, closing it the first couple of weeks of, of the next quarter. Does that make sense? And so, and now in the spirit of transparency, you know, other buyers are going to find out about that and then, you know, so now they're going to expect those same level of discounts. And so that really erodes the integrity of the pricing that you probably set up and said, hey, this is the pricing model we need to support our business. But now our average price is down here.
[00:10:04] Speaker A: Damn. I mean, listen, this is a very common playbook that a lot of sales folks use. Route, they'll say the end of quarter signature thing. And what they're doing is they're trying to create urgency so the company buys. And there's other ways to create urgency with priority in the queue and launch and reminding them the cost of doing nothing and things like that. But when you start introducing, say, a discount for end of the quarter or to drive that, what you're showing them is a wet towel. All right? And when people see a wet towel, they squeeze it, right, to get water out. And if they think there's water in there, they're going to, they're just going to keep squeezing. You've done that before, right? You've squeezed wet clothes, wet towel or whatever. And it's like, I think there's some more water in here. Let me squeeze it again.
But if you can show a dry towel or it's like, look, this is what it is. These are the terms, these are the parameters, then there's less likelihood that they'll try to squeeze. Is this crazy talk or you're like, no, Marcos, I think there's something there.
[00:11:02] Speaker B: No, that is exactly right. And in fact, some companies, Marcos, are doing this correctly. Okay, so Tropic, you know, put out a report, it was pricing variability for top suppliers, normalized for volume, everything like that for the first half of 20, 25. And they're, you know, a company like Datadog, like the pricing variability, the lines almost touched meaning, like, you know, they're not making these interesting concessions. I haven't seen obviously what their revenue model looks like, but I'M guessing it's not a hockey stick. My guess is it's very consistent, you know, very efficient, that sort of a thing, you know, which. Which is great.
And then there's other ones where the line is anywhere from negative 50% to 62%. I mean, that. That line is massive, right? And so to your, you know, squeeze. An analogy, that's the buyer, squeeze. Water came out, they squeeze again. Water came out. And all of a sudden they're like, whoa, there's savings to be had here. There's, you know, opportunity to be had here. And they're just going to push, push, push. Which is really interesting because as a seller, you might think that, like, there's a lot of negotiation strategy that comes into play. But, you know, if I'm buying something from you and I'm like, hey, you know, Marcos, like, I hear what you're saying, like, you know, you quote me $1,200. Like, I. I'll. I can pay 800. That's my budget is. And you're like, okay. And all of a sudden, like, oh, interesting. Like, okay, one more thing, right? Whereas if you were to say, hey, you know, unfortunately, I can't. Here's why I. I can do eleven hundred dollars. But, you know, it's, once again, this. You know, we have the resources set aside for implementation. So I can only do that if you're ready to go next week, because that way we can get you up live and going there, that sort of thing. All of a sudden I feel like, oh, okay, like I asked for this. He. He responded here. There's not any more. You know, it's like a dry towel here, especially, because there's this contingency that benefits me and I can move forward there, right? So I do think that there's a lot of signals. Once again, you can call me the boogeyman. That's fine. But once again, you kind of treat. You kind of created the monster, right? And. And we're doing it because we've been trained that it. It works.
[00:13:13] Speaker A: I think that's exactly the case here, is that the salesforce are creating the monster. They're fighting. They're creating the boogeyman and then having to do all these, you know, unnatural things to try to get a deal done, it hurts economics in the long term. It makes winning more expensive. It creates a lot of variability and misaligned expectations for the implementation people in the onboarding. And there's a lot of really poor downstream effects. Yeah, you. Maybe you do hit the quota, but then there's this, this sort of, you know, payment of terms you have to do afterwards in doing that. So for, for me, sometimes I think quota makes crazy behavior. And if you don't have the right guardrails and discipline behind the scenes, then you run into trouble. So a couple of things that I've seen out there that works and tell me if you've seen this come across your desk on the procurement side is discounts that are already predefined and baked in. So for example, hey, if you sign up for a longer term, you know, you know, from month to month to annual or whatever, we're going to give you discount the old fashioned volume ones, right? Hey, you get a thousand credits or you get 100,000 credits, you're going to get a nice break on the unit price if you buy and commit to a lot more. Another one here is if you do a specific bundle, hey, if you buy these products A and B, we're actually going to give you a nice break in buying both of those together, right? So those are some of the things where it's baked. It's understood there's sort of this kind of give, get or reward mechanism of saying, hey, look, I want this behavior multi products, longer terms, more volume and I'm going to reward for that in my discounting structure. But a lot of the, the sort of, you know, fly by night, you know, hey, I'll give you a 25% off if you, if you sign tonight and all these kind of weird things, you want to keep those to a minimum. So structured discounts versus not. What do you think of that? Crazy.
[00:14:58] Speaker B: Well, what you're describing, that's exactly right because what you're describing is you're describing optionality, which absolutely should be a good thing, not flexibility. And there's a big difference between those two things, right? Optionality is very logical. It's very like, you know, data driven. It's like, hey, you know, obviously if you're going to buy ten licenses versus a thousand licenses, there can be a discount there, right? If you're going to commit to a three year versus a one year, obviously there could be a discount there. If you're buying multiple SKUs versus one SKU, very much a logical discount there. The flexibility is where you get into trouble, right? Because then it's like, hey, you quoted me this price for this dollar amount, I'm asking for that same quantity that I'm not changing any variables. All I'm asking for is the price to change. And that flexibility is where, you know, companies start to get into trouble. But, but keep in mind that once again, I believe that a lot of times the pricing is there, meaning the company said, hey, yeah, here are the levers you can pull.
But what's lacking is two things Marcos was lacking is the discipline, meaning the enforcement of it, because you get a rep or you get a buyer who creates the perception, whether it's perception or reality, that, hey, you might lose this deal unless you do concede here.
So that discipline is often missing. And then in the name of hitting a number or hitting a quota, you make that concession. But once again, you may have saved that deal, but you have. It's like chopping off the head of a monster, right? Then you may have really impacted the trust and credibility of your pricing model. So that's, number one, is like, how do you have that pricing discipline in place? And sometimes, yes, Marcos, that will mean you need to walk away or be willing to walk away from maybe a bad deal or a deal where you haven't fully shown the value, okay? The other piece of the component is it's truly an enablement piece. I, I, you know, you do the numbers, Marcos, of like, I don't know if you get involved in this in your world, but how many cold calls, emails, webinars you need to take to fill the, the top of the funnel, right? And then you make it. You make, you make a thousand calls. You maybe get like, 20 connects, right? And of those 20 connects, maybe you get like 10 meetings, okay? And maybe of those 10 meetings, you, you know, three make it to the proposal stage where there's, like, genuine interest, right? And let's just say it's a $100,000 deal. And then in negotiation, because you lack the pricing discipline and because you lack the enablement of truly helping the buyers see the value, you end up conceding to, say, $50,000, right? In that last stage where you have a buyer excited, you've given up half the value. And now think about everything else that needs to go back to occur to, to fill that value that you gave up. And so my point here, here's kind of the point I'm making is a lot of times buyers will have a concern, an objection, and that problem will be solved via a discount.
But a lot of times that problem can be solved via addressing the value proposition or things of that nature, helping the buyer see that these two products are not the same.
But it's easier sometimes for both to go with the discount. But so anyway, what's missing is that enablement piece that the Discipline and the enablement need to complement go be aligned.
[00:18:29] Speaker A: With the pricing strategy, the discipline and the enablement. And by the way, I've never heard this optionality or this optional versus flexible thing. That's a really interesting point. People use them interchangeably, but they're not quite the same thing.
Um, and I think that that's really interesting that you split it that way. Hey team, I want to take a quick pause here to ask for a small favor. This show is about helping entrepreneurs remove the guesswork and price with confidence. And it will be a huge help if you can rate the show and share it with a friend who you think is struggling with pricing. Takes about 10 seconds of your time, but it will mean the world to me. Thanks in advance. Now back to the show. You know, putting yourself in the shoes, thinking about a SaaS founder or a CRO of a big SaaS company. Listening to this, figuring out like, ooh, yeah, we do sell most of our deals at the last two weeks of the quarter. We do end up giving away a bunch of these random discounts. I might have a discipline problem, I might have an enablement problem. What are some quick tips for them to maybe quick diagnose themselves or maybe some tactical things they can do to help them out of this? Because I feel like there's more than one SaaS company that falls into this trap and they probably want to know how the hell do I get out of it.
[00:19:39] Speaker B: I'd say there's a majority of them that fall into the trap. I do think there are creative ways to look at comp. I think that is absolutely, you know, because incentives drive behaviors. Does that make sense? I talked to one CRO who had a very interesting, a spiff strategy to where they massively incentivize their sales reps to close a certain percent of the deals in key in the first month of the quarter and the second month of the quarter. And if their deal cycle and close rate was, you know, and they had it all measured out but was was more not a hockey stick, let's put it that way. They benefited from that. Of course. The company benefited as well too. Right. And so it was placing less of an urgency on the end of the quarter and more kind of level setting that, you know, I think that's, you know, really, really important. I do think it's, it's, you know, from an optionality perspective. You need to really look at, hey, what options can we offer from like a SKU perspective? I think that's really important because if you are trying to sell a premium solution to a buyer that doesn't have that need, then you're going to have to end up discounting a premium solution. So how can you sell a more basic solution to kind of, kind of meet their needs? So I, I think that that's kind of a part of it as well. But you know, you do a little bit of math, right? So the, the customer acquisition cost CAC for a company, I've seen it sometimes 14 months, sometimes 18 months. Like sometimes in that area. Okay. A lot of times the average term length might be 12 to 14 months for that initial deal. And then churn might, you know, maybe your renewal rate might be like 70, 80%. So that means 20 to 30% of your customers never generate profit for you, which is, which is kind of, which is kind of crazy. Right. And so is there a way to, you know, try to deincentivize, kind of chasing maybe those, those bad deals or those bad fits? So yeah, I do think like comp plans, you know, very important to kind of look at. But then once again, on enablement side, I don't see near as much investment in, in training, in negotiation training, in value planning, things of that nature. I think negotiations and concessions should be a secondary effort only when potentially like the value proposition isn't quite there yet. And I think that once again, it is a little bit of a numbers game and they're chasing that. So those are two ways I think you can continue to invest in.
[00:22:19] Speaker A: Yeah, that's a really interesting point at the very end about the training, the negotiation training, value framing, value positioning or value selling. A lot of people call, but something you just said that really, really jived with me, which is the better you are at that alignment, that value selling, the sort of making sure that you're selling the right value to the right customer or the right prospect, then you probably have to lean less on negotiation. And so I wonder if the better you are at just framing and aligning what they want, what you sell, and making sure that fits like super tight, you may have to lean less on this whole negotiating, trying to convince them, trying to pull these different tactics to get them to believe so that way you can then get to the price, close the deal, things like that.
So there may be this opposite relationship between the better you are at value selling and negotiating. If you're great at one, you may not have to be as great on the other. Listen, if you have both, even better, right, you'll be a killer closer and you know, always hit your quota. But I Think that there's an interesting reliance on the other as a crutch. And I always looked at discounting in general as a cocaine lace crutch. It works, right? Until it doesn't.
[00:23:27] Speaker B: Right?
[00:23:27] Speaker A: But it works.
It's hard to get off, man. People get hooked on it. But if you're rewarding that behavior to go back to your, your compa comments, I think then the, the company starts to introduce like the bad starts to outweigh the good is what I'm saying. And you have to sort of pull. It gets harder to pull away from that because again, you know, somebody was on cocaine for two weeks versus two years. It's really hard to, you know, get them off at two years. Right? Let me get off the drug thing because I. Listen, everybody. I don't do cocaine. I don't, I don't, I don't snort any of that kind of stuff. But it, but the analogy still still stands because it, it works really well.
[00:24:02] Speaker B: And it's hard to get off real, real, real quick. There's a quote that comes to mind. It says, you know, to resolve problems through negotiations is a very childish approach. And I don't know that I fully like, agree with the whole concept of that. But the reality is like, easy, it's simple, it is a crutch. But oftentimes it's medication. It is, it's masking an issue you're not solving. You're not solving the true, the true problem.
[00:24:25] Speaker A: Masking the issue. I think that's, that's the key getting to the root. Right? So when I go back to what we said, right, you're a CRO. You listening to this thing? Number one, I think structuring in your discounts. So they're very clear and transparent. What is rewarded? Multi year, multi product, again, volume, things like that.
The second part about comp, I think is a key one. So once you have structure, the keratin sticks in place to reward the right behavior. I love the idea of, hey, I'm going to reward you for closing these deals earlier in the quarter. Maybe, maybe there's some accelerator in the comp or whatever that is because you got that 10 weeks of calm and then that two weeks of, of chaos at the end. Right? And so you want to reward them for closing sooner. I think that's a fantastic stick. Another, another one is maybe if you do give them some discount authority, maybe you give the AE, I don't know, 10% or whatever, but they don't use it. There could be also another reward for not Discounting, right. And this is this whole notion of commissionable gross margin and being able to reward folks that aren't using that discounting lever as much to make sure that you know they're going to do whatever it is that they can to optimize their revenue as an ae. And so if you give them an extra reward for not discounting, that oftentimes gets, gets that bump. But that third one here about the enablement, the value selling and framing negotiations. I've attended some of these trainings and I think that, you know, some of them are do a bang up job, right? And really get deep into what elements of value that customers care about and buy what jobs they're trying to get done and that ICP fit. And here's the ones that I think do it the best. The ones that do it the best, the product marketing, the product management people like they're all in on that training and there's a very, very tight cohesion between what it is that they sell and why and then what they build, what the company's really good at and how that differentiates from the other options that are out there. And so when I see just some outside third party come in and do sales training versus when I see it internal in all those groups in product marketing management, all those areas are aligned. I know I normally see a lot better outcomes in the, in the ladder.
[00:26:36] Speaker B: Well, I think you're absolutely onto something because a lot of times those trains are good and they're, you know, they're, they're, people said they're like, oh, that's really interesting. But then you don't see the execution of it. Okay. And I think that's a little bit of a gap. So here's what I really like is the, you know, CROs, I can guarantee you most of them have some sort of conversational intelligence, revenue intelligence. You know, we use gong like they seem to be having a lot of success right now.
That is a great way to not just get specifically involved on like individual deals but to start to look at trends across the board. Does that make sense? And I think that is a powerful tool that didn't exist a few years ago for to say, hey, we gave this big concession here, we're going to go do kind of a postmortem after the fact. And what could we have potentially done, done wrong. Right. Or done differently? I think that's what I meant to say and I don't think we see that enough. I love the idea of, you know, having some sort of tiger team Involved in, you know, exploring like where this execution is lacking. Because from a comp perspective, by the way, you had a great idea of like, hey, much bigger accelerator, less of a discount, right?
I also think that there should be more of a, a true walkway price too. I don't think that exists. A lot of times it's like unwillingness to walk away. But on the execution side, you are exactly right. And so there needs to be a person at the organization, especially in a bigger organization where they can be watching these calls, using AI, using these tools to find out and you just look at the data. Okay, we made a big concession here. Like, should we have done that in hindsight? And then you can start to take that, use those as learnings not to throw people on the bus, say, hey, here's what we saw. That. And then the training becomes cyclical, right? Becomes like training, go the execution measure and then bring that back into training. And then you start to be able to enforce. You start to be able to kind of see where the gaps are, plug the holes and it will change.
[00:28:31] Speaker A: I think a lot of folks miss that loop that you just said, right? I think they just do one piece.
[00:28:35] Speaker B: And then it's a one time thing.
[00:28:37] Speaker A: Yeah, yeah, one time. And then let it fly. Right. I think that makes tremendous sense. I do want to, I do want to get to a question that I've been dying to ask you the entire time you've been on this show. All right, I'm going to hold it off for a second. There is, I think, just a one thing to remember for folks listening today, talking about all the gaps you just illuminated and what's happening. What is the one thing you want CROs to take away?
[00:29:03] Speaker B: What is the one thing I want CROs to take away? Okay, look, there's a term out there. I don't know who coined it. I did not, I did not coin it. Okay?
I call it the trust dividend. Okay? So essentially, you know, there is this notion that if a customer trusts you, if there is credibility, then you can, can charge more. Not just charge more, by the way, the sales process will be more efficient. Right? Like if you trusted me and you wanted to buy some for me and you trust that I was going to give you a deal, a good deal, the first time. Guess what? You're not going to go back and haggle with me and argue back and forth, you know, because there's that trust element, right? You may not feel the need go and look at other options because you're like, hey, you know, I Trust that Michael is selling me a solution that's gonna, you know, be a good fit for me. Does that make sense? When you lack this discipline, when you, everything from your marketing to your sales approach, when there's exaggerations, when there's, you know, maybe very fluffy ROI numbers, when you are forcing the buyer to kind of haggle with you to get the best price, all of that erodes trust, all of that erodes credibility.
And so then you kind of are reverting back to, it's not a partnership at this point. It's. It's a very arm's length transaction where we are both incentivized to optimize for ourselves.
Okay, I love it. And so I guess, like, how do you align the pricing, the enablement, the whole sales methodology in a way that kind of builds that trust, builds that credibility, and do it in a way that is unique to the buyer and in their language, that, to me is a big gap and a takeaway. Because this transparency, if we come in full circle here, Marcos, this transparency, whether you want it or not, is only going to increase.
So having that trust, that credibility, and that pricing discipline will be a competitive advantage and become increasingly more so in the very, very short future.
[00:31:22] Speaker A: I subscribe to that fully. I think that trust transparency is going to be key for a lot of companies out there. For, for those that may not realize all these actions they're taking the last minute, discounting the heroics actually erode trust and make things even harder over time.
I fully subscribe to that. The second part of my question, the one I'm really dying to get to you because you've been in procurement forever.
I want to know, how did sales reps get you to say yes?
Go back, think about it.
Which were the best ones? How do they get you to say yes and not block the deal?
[00:32:01] Speaker B: Yeah, that's, that's a really good question. And I, I definitely don't see myself as like the typical procurement guy who, who wants to block the deal at the end of the day.
Once again, I need to know that they have the, the best interest of me and my stakeholders, you know, and, and by the way, that'll benefit them too, right? It definitely benefits them. And so when they can show that they understand truly what we need and say, okay, like, here's what we've heard you say, okay, here's how our solution meets up with that. Here's how it doesn't. Here's how we're going to overcome those challenges. Does that make sense when they're pretty transparent with me about true optionality. And they're not like, you know, all over the board. All of a sudden it becomes less of a me versus you and more of a how do we kind of tackle this, this, this together? Does that make sense? But it has to be, you know, in this world of AI, I think it's, it's a little bit easier to do this, but how does it be about me as the buyer and, and my stakeholders and less about you as the seller? Does that make sense?
[00:33:06] Speaker A: That makes perfect sense. I think it's a very collaborative mindset too. And so, you know, as, as the boogeyman, you're not as scary as people think. I think you just really do want to collaborate, get to good outcomes, be there and represent for your stakeholders, get a good deal. You know, you don't like the friction, despite what they say, right? The, the friction, the pound of flesh, all those things that they say about the procurement folks. I think at the end of the day, they do want that, that partnership and that high trust and collaboration is just a much better way to do business in general, right?
[00:33:35] Speaker B: It is, but it's not always possible. It truly takes two. Right? Because if I'm, if I'm giving that like, benefit of the doubt and trust you, but like, you're optimized for you, like, I now realize, okay, I can't do that. And so I have to revert back to. It's a little bit of that prisoner's dilemma type thing, right? I have to revert back to kind of these old school taxes because that's what I need in order to achieve, you know, what, what is potentially possible right there.
[00:33:59] Speaker A: Amen to that. I mean, I fully subscribe to it and I think in our journey with, with boogeyman and cocaine and postmortem is a pretty dark episode for all, but a lot of fun. And I think, and listening to these things, I think could lead to more dollars for folks on both ends. So thank you for coming in and just sharing your perspective. I think we put in the show notes that, that graphic of that chart you were talking about, the report with the price variability, I think that's gonna be valuable tool. And I have one last question that's gonna help humanize the boogeyman. Let's, let's look. Michael's got nice hair. He's got a nice smile. He's not as bad as I make him out to be, right? For those listening, Michael, give me your favorite song, your favorite jam, the thing you can listen to. Over and over again.
[00:34:40] Speaker B: Tell me why over and over again.
Okay, well, so this. This may surprise you a little bit. And we were talking about this pre show, like, you had a feeling of, like, well, my. My. You know, my favorite song would be. And I don't know if I, like, I. I have to kind of think about, like, do I have truly a favorite song? But the truth is, like, and. And I'm gonna make sure I'm looking at your faces, I tell you this, but I like musicals.
[00:35:03] Speaker A: Oh, okay.
[00:35:05] Speaker B: I do. I do. Like, I like going to New York City. I like, you know, being on Broad, you know, going to Broadway. So, like, the songs that are probably the most powerful for me are. Are from some of those musicals because there's a story behind it, there's a character behind it. And so because of that, they're. They're very moving. Does that make sense? And so, you know, I think about, you know, some of, you know, obviously, Hamilton is amazing. We were just actually in New York and in Hell's Kitchen, you know, story of Alicia Keys. You know, some amazing songs in it. You know, there's a. There's a. There's a musical called Six, about the six wives of Henry the Eighth. Is. That's just phenomenal. But, you know, I think, you know, one of my favorite ones is. Is. Is Les Miz, right? And you think about, like, that story behind.
Behind Les Miz, and there's just some really, really powerful, really powerful music. Music in there. So. But, you know, there's. There's one in particular called Bring Him Home, which is just. I mean, you have to be in the right mood for it because it's not like this up and beat one, but, like, you really get into that, and it's just. It has so much powerful. But, you know, one day, more empty chairs at empty t. Empty tables. Like that musical, very, very powerful.
[00:36:16] Speaker A: Damn, that is. That is, you know, Les Mis. I don't think anyone's ever brought that up here on the show, but I can see. I can see the reasoning behind it. I was way off, by the way, if you want me to.
[00:36:26] Speaker B: You know, what's funny is, like, my wife is. My wife is. She. She boxes. And sometimes I go to the gym with her. And sometimes I. I imagine, like, if I were to ever, like, go into, like, an amateur box and, like, what would be. Like, what would be my walkout song? I think it would probably be, you know, from. From a musical. I just have to decide, like, which one can. I can. I can weave into a Walkout theme.
[00:36:50] Speaker A: Damn, that is a curveball for me. I had the Beastie Boys, by the way, just so you know.
[00:36:54] Speaker B: Hey, there's some great. I love the Beasty Boys. Who. Who doesn't love the Beastie Boys? You know, I. I threw it out.
[00:36:59] Speaker A: There just for fun, man. Thank you for playing along and would love to have you back here. You willing to come back and give us an update on what you're seeing?
[00:37:05] Speaker B: So fun, Marcus. Let's do it again.
[00:37:07] Speaker A: Yeah.
[00:37:08] Speaker B: Back your book up on the shelf, waiting for version two to come out. You know, in this world of AI, in this world of, you know, benchmarks and stuff like that, I do think they're that, you know, I love your book, Marcos, and it's. It's phenomenal. Definitely. I. I have notes, by the way, that I have, like, account page this, they say this, and I will reference back to those. But, you know, I'm excited. I don't know if it's on the works or not, but, like, I am definitely excited. I think the world needs, you know, Street Pricing Volume two, man, that.
[00:37:34] Speaker A: That is high praise number one. Didn't expect this, but I will drop a teaser about the remix. And there is something in the works here. Won't be real much yet because it's not done, but it's something in the works, man. Thank you for that. Major, major high five to you, team. That was Michael Shields. He is at Tropic and he sees all sorts of different trends around procurement, buying, selling, licensing, SaaS, pricing, products.
Go follow him on LinkedIn. He dropped a lot of knowledge today and perspective, right? Beyond boogeymans and cocaine, lace crutches and all those key things, right? But connecting those dots around your selling discipline, around the enablement, the training, the measurement, and making sure that you really have a system behind the sale, right? And that way you get better over time. Take what you learned, apply it, get 1% better. Move away from that guesswork and remember, stop guessing and start growing. Until next time, thank you and much.
[00:38:29] Speaker C: Love for listening to the Street Pricing podcast with Marcos Rivera. We hope you enjoyed this episode. And don't forget to like and subscribe. If you want to learn more about capturing value, pick up a copy of Street Pricing on Amazon. Until next time.
