PODCASTS / E30
SEP 15, 2020
Dr. James: 00:19 Welcome to episode 30, part two of my rousing interview with Jake Huber on the art of sales negotiation with retail buyers. Let’s get right back into the fun.
Dr. James: 00:34 I get sad when I see founders who have a good product, but they actually sabotage the business by avoiding the sales issue or leaning too much on brokers or my favorite, here’s a good segue, letting the broker go to the meeting by himself. Please Jake, can you help cure this disease? Can you help me? What can you say to my listeners? So that, that will never ever happen again in this country?
Jake Huber: 00:58 You are correct, you should always be representing your brand. There is no one who can talk about your brand like you, and the difference between you and a one pager and a stack of 21 pagers, it’s night and day. And you have to pay attention to that stuff very, very closely. And the good news is, the travel restrictions, usually it was an economic reason, It was, “I’m not going to fly” or time. I’m not going to take two days out of my schedule to fly to the east coast, have a 20 minute meeting with a 10 store chain, even though that 10 store chain is very influential. So they would either let a broker do it or something else.
Jake Huber: 01:33 So I am quite sensitive to that scenario, and sometimes startups are limited not only on resources and time, but also people, so it can happen, it’s not ideal, but you should avoid it at all costs. And now it seems like most of these meetings are not going to be done virtually through Zoom and things like that, so there’s no excuse for you not to do this at all.
Dr. James: 01:57 Yeah, you just raised an interesting point. It almost makes it much more likely that, that will be common scenario, and then we may vaccinate our nation against another disease we didn’t even acknowledge.
Jake Huber: 02:11 So there are certain retailers, they’re usually not the best in the world, but they will only meet with, and take that for what it’s worth, but they will only meet with the distributor rep, maybe the broker and the distributor rep have a standing monthly meeting with them and they kind of go through it. I would say that those retailers that rely on that process underperform, in general for our products and our brands.
Dr. James: 02:38 So can we name some names here? I’ve heard …
Jake Huber: 02:43 Yeah, some Safeway. Yeah, Albertson Southwest, Albertson Southwest will literally own it, they are 100% [KeHE 00:02:55], they will only meet with a KeHE buyer or the KeHE distributor rep, and then the broker can go in. I’ve been accepted almost every time and not always with great leading products. They just kind of look at it and look, they’re looking at the numbers, they go “Is my cost right? I’ll put it in my 40 stores,” I think they wanted like two [skews 00:00:03:11], and I was like, “No, you’ve got to put three.” We literally said “No” to them, and then they came back and actually took it. So there is a room to have a kind of weird disjointed negotiation with them. But look, Albertsons Southwest, I’m not knocking them, they don’t necessarily underperform it’s category by category, but I think that process is a little bit hands offish and I think there’s things that they can understand to better strategize.
Dr. James: 03:38 That’s certainly not the majority of geographic stores, right?
Jake Huber: 03:43 No.
Dr. James: 03:43 I assume, Yeah, so I could think of some other shitty east coast chains that probably, sorry, probably play that game too.
Dr. James: 03:52 Now I want to get really empirical here because that’s how my brain works. You’re talking about specific category buyers or entire retail divisions, which say, “Oh no, for the small little natural brands, we want a professional broker to hold the meeting. They’re not even allowed in the room or can,” or do I go to some, if I’m working with Presence Marketing, of course, then I’m already [all set, right 00:04:18]. But if I’m going to Presence Marketing, I would assume specific national brokerages get to set their own rules. It’s got to be that. Or does Presence Marketing get treated the same way?
Jake Huber: 04:30 Yeah. The big boys will definitely have… The big brokerages will have standing meetings with these people. You can rely on that. However, you don’t need a broker. You do need to be set up in the KeHE warehouse or at least on KeHE’s radar about it. If you’re at least in a warehouse with KeHE, then you should be able to get access to the account executive list.
Jake Huber: 04:53 And then you let your fingers do the shopping and go down and find that person and start calling them and be like, “Hey KeHE rep, this is my product. This is why it matters.” Again, do your homework with this person because they’re busy. Why should they care about you? And they understand the category. And oftentimes for these specialty premium CPG brands, the retailer actually lets the KeHE rep kind of manage that side of it in large part. So sometimes these people are very tied to the actual running retailer. So it’s imperative that you have kind of alignment across all stakeholders. If you have a broker, it should be across the broker, the KeHE manager and the retailer. But to answer your question, the buyer will actually say, “No, I don’t want to see any rep in here at all.” They don’t like it.
Jake Huber: 05:42 It’s much more efficient for them to just have three standing monthly meetings and get through their decisions real quick. And then they turn and burn. It’s easy come, easy go. They’ll bring you on 40 stores. You don’t perform, you’re done. And see you later.
Dr. James: 05:56 I could see just giving in to that process because as I said, my book, if your [baby 00:06:04] can’t meet floor velocities without almost any support, you need to start again.
Jake Huber: 06:10 Totally. And I would say-
Dr. James: 06:11 There’s nothing there.
Jake Huber: 06:14 Yeah, exactly. And you should be very specific about the initial retailers you’re going to. And have a very good reason as to why you don’t just start scatter shotting around and just whoever will take you, will take you, which is oftentimes what we get trapped in. So
Dr. James: 06:30 Oh, I know. Yeah. That’s well, yeah.
Dr. James: 06:33 You know, that’s my biggest piece, which leads me to my next question. My next question is that, how do you say no to a buyer? When the conversation goes, well, there you go. When the conversation goes sideways, how do you, I think when I talk to newer people who have all the right personality, they’re ready, they’re probably born salespeople. They still sweat buckets on how to mechanically execute the “no.”
Jake Huber: 07:02 And we can all appreciate saying “No” or it’s never, “No,” it’s “Not right now.” It’s “Hey, that all sounds great. Let me get alignment with my team and my advisors to make sure that that fits with our strategy.” Because you don’t have to say much. You just kind of say, “We’ll get back to it,” but then make sure that when you’re done saying “No,” you go immediately into the topic you want to talk about and close them and that’s how you can help steer the conversation.
Jake Huber: 07:33 I’m not saying take it over, but you should have some list of wants that you’re getting at. Or if it got sideways, you bring it back to where it was before or wherever preferred place you want to put it back because “No” will be “Not right now, let me get back to you.” And then “Let’s go back into this conversation that I think we liked.” But what’s critical about all of this is that you didn’t do that just to deflect and move on. You actually need to and it is 100% required that you follow back up on that in your email after the meeting and give them the actual “No.” And you can then pause [crosstalk 00:08:10] later time throughout it. And it’s mixed in with a whole lot of other incentives and things that you talked about. So it lessens the impact of the “No,”
Jake Huber: 08:17 if that makes sense. That is one of those subtle cues of integrity that only bolster your chances of getting in because so many people will say “No” they didn’t make a note of it because it wasn’t something they really wanted to talk about and they never followed up with it again. You should go right back and address it directly that I spoke with my advisors, the reason that doesn’t work. And then you can formulate the sentence that you’re trying to say “No” about. There are companies I worked at where we had six, seven people read over the same three sentences and start crafting it over and over again. It sounds ridiculous, but I’m telling you get more people looking in this stuff, it actually makes the tone… Because somebody is looking at tone, somebody is looking at the words you’re using, somebody’s like kind of, you know, taking it in the overall picture.
Jake Huber: 09:05 So get as many people looking at that email as possible.
Dr. James: 09:08 When you were saying this, I was thinking like, this is exactly what Jake’s talking about is rather than no, you defer offline to your committee of awesome people, which just makes you look more professional. Alright because it says you’re announcing to the buyer that you’re accountable to a larger group. You’re not a narcissist with a package, but more importantly, it prevents you from doing what you’re probably want to do, which is say 20,000 fucking dollars for [strata 00:09:33]. So yeah.
Jake Huber: 09:37 I’m biased to say yes to everything because that’s the pressure in the room is to say yes to whatever they’re saying. And it’s like, “Yeah, we’ll do it. Yes, we’ll do it. Yes, we’ll do it.” And then you got to… I like to cook. You can always add more seasoning, you can never take it away.
Jake Huber: 09:52 So use that same philosophy when you’re in here and always know you can always add more commitments, but be restrictive in what you say yes to. And then if you have to say, “No, it’s a not right now.” It’s a “Defer it, I will go back.” And yeah, you’re exactly right. And the buyer has people to answer to, you have people to answer to, you are a responsible business owner and responsible people take their time. At least that’s what I’m told. I’m telling you, there are so many people “Yes-ing” them up and down. That when you actually say “No” in a reasoned way you stand out and I’m telling you, any press is good press in this stuff, they have multiple meetings. You are kind of nothing to them. In any way you can stick out, be different, be different might be a little uncomfortable, but, and sometimes being different is actually being buttoned up and actually kind of having reasoned arguments for what you’re trying to do and having an actual strategy and kind of sharing that with them.
Jake Huber: 10:47 “No” becomes a lot easier when it demonstrably doesn’t fit into the strategic narrative you’ve already set up and that they have already nodded their head too and go, “Yep, that sounds like a good strategy for you.” Strategic plan and having an understanding of who, what customers you need to be prioritizing and why is really important because it puts a finer point on this and it allows you to say, “Skip that meeting, we don’t need them right now.” Or “I’d rather go to them once we’ve built out their competitors’ distribution,” or you want to think about it as a chess game. It’s not checkers, it’s chess. What am I going to do today that’s going to set me up for that account later? A sophisticated retailer is not just looking at dollars and units, they’re watching the behavior of what people are actually doing.
Jake Huber: 11:34 And so there’s always, there’s always an argument for increasing households, which is pure incremental dollars. And if they can capture them in that category longterm, it’s worth millions of dollars.
Dr. James: 11:46 If your category brings them in the store like, or your digital media some how brought them in the store, they’re going to go buy a Coke and a bag of Lays, and then, Boom! Suddenly they’re making money. The [crosstalk 00:11:57] argument, even if it’s largely based on skeptic, kind of loosey bullshit research. I mean they’re predisposed to believe the story.
Jake Huber: 12:05 And then out of that stuff comes some really good nuggets that if properly framed, give you tremendous amounts of leverage. And at the very least, if they don’t give you leverage, they help you stand out.
Dr. James: 12:14 Alright. And thanks Jake, thank you so much for your time. This has been great.
Speaker 2: 12:18 Thank you so much, everyone for listening to this two part interview with Jake Huber on the art of sales negotiation, and as always, please, please, please be safe out there.