Nolan Martin :
Hello, and welcome to the Negotiate X Podcast. My name’s Nolan Martin. With me, Aram Donigian. Aram, do you wanna kick it off?
Aram Donigian :
I will, Nolan. Thank you. Today we are joined by David Chapnick, Partner and Leader of Vantage Partners’ Sales and Account Management, Training Practice. Since joining Vantage in 2004, David has worked globally on projects focused on business to business sales strategy, customer centricity, salesforce effectiveness, alliance management, and strategic account management.
In training services, David crafts transformational learning experiences to build the critical skills required for today’s complex business environment. David’s passion centers on building and implementing strategies that leverage the power of collaboration and innovation between customers and suppliers, with alliance partners and across internal business units.
David’s recent work includes supporting the customer-centric transformation of a major pharmaceutical services company, leading a negotiation capability improvement effort for a medical device company salesforce to capture new share and minimize customer attrition, launching several biopharma alliances focused on bringing novel therapies to market, developing the coaching skills of frontline sales leaders to drive revenue growth while supporting the redesign of the business development and licensing model of a global pharmaceutical company.
And assessing and redesigning the competency model and sales and account management curriculum of a global medical technologies company. I don’t know how he has time to join us today, but somehow he’s got an hour. A frequent speaker and author, David’s work has been featured in Harvard Business Review and elsewhere.
He’s a co-author of the chapter on Negotiation Systems and Strategies. It’s one of my favorite pieces that I use in both trainings and in classes that’s located in the 2020 International Contracts Manual, as well as Vantage’s studies on pricing and on customer supply negotiations. David is also a veteran of the Vantage Volunteers Team, which creates opportunities for the firm, partnered with Greater Boston non-profit organizations.
David is a proud graduate of Boston University. Welcome to the Negotiate X Podcast, David.
David Chapnick :
Wow. Thanks so much for having me, Aram. It all sounds much cooler than it actually is, but if you do it for that long, I guess you get a long bio.
AD :
We are grateful to have you. Thanks for making the time. And let me just say publicly, thanks to Vantage Partners, they’ve been part of my life now for over 15 years. Provided so much in terms of opportunities to use your curriculum and work with you and it’s just the great people advantage that Nolan and I are very grateful to be able to be in partnership with. So thanks. Thanks for that.
DC :
Yeah, of course, Aram. Of course. No, it’s been a great organization and a really nice place to be for a real long time now.
AD :
For a real long time, for those that don’t know, Vantage Partners is a consulting and training firm that helps companies innovate more quickly, execute with greater discipline, and collaborate more effectively for sustained impact and growth.
Now, David, reflecting on two decades at Vantage, it’s been some time. What initially drew you to this field and what continues to excite you about it today?
How A Chance Internship Sparked A Lifelong Career In Innovation Consulting [03:04]
DC :
Way back when I was really fortunate and I had this internship with a bank in England actually, and this bank made affinity credit cards. So imagine if you had a Boston Red Sox credit card or know a Dartmouth credit card or whatever it was.
And so I was working at this bank, we were more focused on like the Manchester United credit card or the Oxford University credit card. And I realized I wasn’t super interested in credit cards per se, but I was really interested in companies working together to create stuff. So how do two organizations come together to innovate to actually create something that they can bring to market.
And so I got this little taste of being able to do that and play in that world of that kind of collaboration. And it just happened to be affinity credit cards. It could have been any other type of alliance, but it’s what got me going on this space. And so fast forward a year or two and I graduated college and I found this little management, consulting and training firm in Boston around the corner from where I was living, doing exactly this work, working with these very large, very exciting, innovative organizations and for some reason they gave me a job way back when.
I’m sure they had way, smarter way, got more qualified folks, but they took a chance on me and I really, I got to do this work and I’ve been there ever since. I’ve been able to work with many organizations, so it doesn’t feel like I’ve been at one place that whole time.
NM :
David, your work discussing negotiation systems and strategies has been featured in a number of major publications. Is there a particular piece that you’ve written that best captures your philosophy on a framework for negotiation?
How Mastering Negotiation Became The Catalyst For Driving Organizational Change [04:59]
DC :
Yeah. I mean, going way back when and Aram kicked it off talking about this one. But that piece you mentioned in the international contracts manual on negotiation systems and strategies was the first time I went real, real deep in negotiation. As I mentioned, I came to Vantage focused primarily on alliances and how to quote companies work together. I wasn’t deep in the negotiation space yet, and it was there working on that particular chapter and it’s pretty long. It goes pretty deep.
Learning about the circle of value, learning about the seven elements, learning about how you can move from a more positional approach to negotiation to one that’s actually collaborative. It’s focused on joint problem solving. It sort of embodied a way of thinking for me that I already had and was just part of how I like to operate and work with people, but it actually created science around that and it created a framework for me to be able to help others to reach those kinds of agreements as well as myself.
So I think it was, I would have to say it was that one way, way back when. And that was really where I zeroed in on this area of negotiation. And figuring out then, okay, not just how do we negotiate one-on-one, but how do we actually build organizational capability? How do we take an entire sales force and teach them how to negotiate more effectively with customers, the results in longer term, more sustainable relationships?
How do you take a small biopharma and small biotech company in a really large biopharma and enable them to be able to work together in the right way to be able to create new therapies for patients? There’s a tremendous amount that needs to get negotiated through that process. And really the seven elements and oh, a great deal of gratitude to Roger Fisher, Bill Ury and my old partner, Bruce Patton for their work on Getting To Yes, which kind of, it’s really where this all comes from, but it gives them a framework for being able to resolve those differences, gives them a framework to be able to work together, to innovate.
And that was where I really first got to dig into it. So I’d have to say that’s the, that’s that original piece.
AD :
David, you’re talking about this negotiation capability building, which I think is such an interesting thought because it goes so far beyond just attending a training or a class, but it’s really saying, how do we make this a competitive advantage in whatever industry we’re in?
And you’ve done this across industries, pharma, medical devices, biopharma alliances, so forth. Have you encountered a negotiation challenge that really stands out to you as a defining learning moment, like an aha moment in, in your own thinking?
The Hidden Complexity Of Making Pharma Alliances Work [08:02]
DC :
Yeah. There have been so many over the years, but I have to think, Aram, and no one it was some of those pharma alliances that I got to work on very early on. So I mentioned it a second ago, but if you imagine the situation, you have a very small organization often they tend to be pretty agile. They can make decisions fast, brilliant people. And then you have a much larger pharma organization, has multiple layers of management, just incredibly broad capabilities, huge commercial organizations deep R&D capability.
And you take those two organizations which have their own strategy, their own goals, their own processes, their own ways of working. Each of them separate. And you take really smart, incredibly well-meaning people, and you put them in the middle of that on an alliance. And the first thing they run into is the fact that yes, each organization has their strategy, they have their own processes, they have their own cultures and ways of working.
The first thing those people run into though is that they’re all different. They operate on different fiscal calendars. They have other drugs that they’re working on. They have other processes or ways that they’ve gone to market. They have different histories, different experiences, and so from a negotiation standpoint, those really smart PhD scientists are just tossed into all of this difference and told, okay, make this alliance work.
Set budgets. Create a research plan, build a team, push that thing forward as fast as you possibly can, and it’s just incredibly hard. Incredibly hard to battle that difference. And so I think that’s that fundamental negotiation challenge is that at the end of the day, I don’t think like the person on the other side is necessarily crazy or evil or stupid, right?
They’re not out to get you in some way, but what they need is just different, right? It’s different than the way in which you’re coming to the table. They have different priorities. Different ways of working or whatever they’re trying, different objectives, whatever it is they’re trying to get done.
I think the fact that yes, they are actually good people and it’s that, it’s the basis for that difference, the basis for why you’re coming together, and that’s what you have to get to in this negotiation, and that’s how you get the drug to the patients at the end of the day because we have to figure out, okay, how do we sift through the differences and come out with something we can both live with at the end of the day that actually is gonna help us do what we wanna do?
AD :
Yeah. I think that it’s interesting. I think those differences that you’re mentioning are widely underestimated. I know Nolan in a second gonna ask you for other kinds of mistakes that teams tend to make in these negotiations.
But to me, that really jumps out that we just underestimate just how powerful those nuanced differences are, but also how much they can impact our ability to implement a deal, which, going into your partner Danny, his work on implementation is what we’ve we gotta get to, to really capture value.
DC :
Oh. It’s unbelievable how much those differences can get in the way. And one particular alliance, I remember they had, I’m gonna try to, I’m gonna butcher the quote from the guy, but basically they had this incredible market opportunity. They had patients who were sick. Everybody knew this was something we should all be working on, and yet the R&D teams were at each other’s throats, right?
They could not sift through the differences. Every single thing was a challenge. Everything was a problem. And that therapy was in real danger of not actually coming to market, right? They had to actually sit down and sift through and press pause, relaunch that alliance. Figure out how they were gonna actually work together to be able to make that work.
It happens too far too often and hopefully, my little piece in this, like no one wants to have me read scientific data or be able to try to interpret oh what’s come back from the labs, but if we can sort through and sift through those differences and actually figure out how to align people, that’s my little piece and that if I have a little part in getting that therapy to market, doing that, like that means a lot.
NM :
David sales and account management require a mix of technical expertise and strong interpersonal skills. In your experience, what are some of those most common mistakes sales teams make, and what are the most critical skills negotiators must develop to be successful?
How Rushing Past Customer Interests Derails Sales Outcomes [13:06]
DC :
Oh, thanks, Nolan. Yeah, it’s a little bit of a jump from alliances and pharma into sort of the customer supplier negotiations, which I’ve also spent a bunch of time in. And it’s funny because sometimes I’m in this space or I’m in the other space and I need to take my hat on or off. Fundamentally, and it comes to the same thing, it’s what we were just talking about in these alliances, it’s failing to stop and really understand what’s your customer looking to do, right?
What are their interests at the end of the day? What are their needs? What are they trying to accomplish? And that hinges on the whole sales process. So if you show up with a customer and you jump right into your pitch on why your technology’s so great, or how you can help this customer do whatever they’re trying to do faster or make assumptions about what their interests actually are, you’re derailing your sales process from the get go and too many salespeople forget that part, right?
In the need race to go from one customer to the next customer to the next, coming with the features and benefits of your products failing to really deeply understand what they need. It’s very hard then to craft what’s the right solution with them, or really to define in their minds why that solution is valuable. Yeah, you might have some statistics or you might have some data that sort of shows that speed that you can create. But if that isn’t actually of value to your customer, why are they going to say yes to you later? And when they now inevitably ask you for a discount, how do you actually tie back?
No. Why? This is why the price is the price. It’s because of that value we identify, we talked about. So if you don’t start way up here at in the negotiation with them when you’re first talking to that customer, at the end of the day, I’m guessing you’re not gonna get to where you wanna be.
AD :
That sales mentality, like the, sell, sell, sell. And maybe not all doing all that listening that I hear, you and inquiry and understanding what they’re trying to accomplish. But that feels like that tends to be a bit of an organizational culture thing that many organizations have bought into, you know, the message sent means the message was received, and our job is just to deliver messages.
How do you work with organizations to help them shift their mindset from maybe a transactional negotiation mindset into something that’s more strategic, long-term partnerships, and that’s both up and down stream?
What It Really Takes To Shift An Entire Sales Force Toward Strategic Selling [15:52]
DC :
It’s a big question. How do you make that kind of a shift? How do you move from okay, that one customer interaction to now an entire sales force trying to have lots and lots of different customer interactions actually trying to move the deal in a more strategic way, more systematically. It’s a really big question and I think at the end of the day, people need to see it work, right? You need to give them a different model. They need to be able to try it out.
I think the biggest challenge that I see and and maybe ever, maybe a lot of people are probably feeling this at the moment, is people just don’t have time. People are moving really fast, right? A transactional model. A transactional sale. I show up on a call, deliver the pitch. They say yes or no. I move on to the next thing. And just try to do that as many times as I can. And I’m actually, oftentimes organizations incent me by those kind of number of customer conversations I’m having.
They actually don’t want me to pause, right? They want me to move fast. So moving the needle or actually engaging a customer in that kind of a deeper conversation, something that’s more complicated, more complex, I think that takes time. Deeply understanding the concerns of your customer, deeply understanding their business.
Hypothesizing with them or telling them stories about how your solution has been implemented with other customers that look similar like taking those concerns and together crafting a proposal that extends your sales cycle. And so that approach doesn’t make sense for every single product out there, but for complicated ones, it sure does.
And for even those, I would argue, that aren’t so complicated. I think that’s how you create differentiation. It’s how you create sticking power. It’s how those customers will wanna make sure that they come back to you because they believe in you as a trusted advisor to them and their business. So I think it’s how do you wrestle that time challenge and at the end of the day, really try some of this out, see it work will help drive that kind of organizational change.
AD :
Yeah, I appreciate that. I appreciate this dose of reality, which is that there are situations in which being more transactional might make sense. And then I think what you’re describing is some really complex situations that require collaboration and innovation to A, understand the problem. B, solve it well, and then C, ensure that it gets implemented correctly and effectively in those cases, I guess. How do you work with someone who says, who really pushes back on you with the time piece?
How do you convince ’em that try this, get some experience with this work, with this other model, the circle of value approach, these seven elements, and you’ll make up the time elsewhere. Is that what you tell ’em or do you tell ’em something else?
Clear The Minefield First: The Hidden Power Of Early Alignment In Complex Deals [18:52]
DC :
No, Aram, I think you’ve got it. I think you’ve got it. I think it’s slowed down to go fast. If we have deeply understood what you’re actually looking for, I’ve then crafted a solution that meets those needs really well. Okay. We can launch, we can go, we can execute that project. We can deliver what you’re looking for, make sure we’ve got the right team in place. Everything else gets so much easier when you’re operating from that playing field where you both get it. You both have done that hard work up front and if you don’t do that, I’ve seen that’s where the time impacts happen, right? Going back to that pharma alliance, a little different context, if you didn’t sit down, if those scientists didn’t sit down and figure out how are we gonna work together?
How are we gonna solve these differences? How are we actually gonna get things done? And they just jump right into the work. That’s when those kinds of arguments, disagreements, conflicts happen. Same in a sales cycle. If we haven’t actually set expectations, what are we gonna deliver? What’s it gonna look like?
Who’s the team gonna be? How is that gonna get implemented, rolled out at the end of the day, the ground is laid rife with all kinds of landmines. And it gets a lot harder and it takes a lot more time when you’re trying to walk through that minefield versus if you’ve cleared it all out and you can just go straight and you can go fast.
NM :
You mentioned something there about realigning the corporate goals for their sales team. Like you said that hey, sales teams are paid to go fast, paid to get a bunch of calls in, really paid to stay busy. How can we change that quality metric as we want our sales team to be just more successful? Is it only the success metric that kind of says, hey, maybe on track or are there anything else we can gear them towards?
Why Piloting Strategic Sales Shifts Beats Rewriting The Scorecard [20:44]
DC :
I think it’s baby steps, Nolan. I don’t think you have to throw out your sales team scorecard at all. But I think, let’s figure out, okay, what are those big deals they’re working on? How do we tweak there? How do we segment the time that they’re spending and focus them on what’s really gonna move the needle? And let’s try it a little bit differently there. And iterate that approach in, I know if we see some things actually working, let’s leverage those best practices.
Let’s bring those to other salespeople, other teams. So I’m a big fan of piloting the approach, segmenting your entire organization, right? And let’s take to five, the 10, the 25, whoever it is that’s driving some things that are really important and let’s try some things out. I think that has worked really well. It creates the success stories and the use cases and also the proof points everybody else in the organization is gonna need to be able to get on board with doing things a little bit differently.
And so if we’re able to actually change in this pilot in some way, it becomes a lot easier to change a much larger organization.
NM :
Yeah, you had mentioned leverage there. That’s something that we know that many professionals struggle when negotiating with powerful buyers who have leverage. What strategies do you teach to help them reframe these conversations and maintain value in their deals?
How Deep Understanding Becomes Your Strongest Sales Advantage [22:12]
DC :
This, and this comes up all the time. All the time. No one really calls Vantage if it’s easy, it should be pretty hard on what we’re working on. Otherwise you would just do it yourself, right? So these leverage challenges when I am negotiating with a customer and it feels like they have all the leverage. I have really strong competitors.
They have products that might be on par with what I’ve got, or maybe they’re superior in some ways. At the end of the day, it comes a little bit back to understanding the needs, right? Because if we aren’t better than what they get from our competitor, why would they ever go with us?
And it’s often procurement’s job or the customer’s job to try to look at you as apples to apples in some way. And if you’re just not as good as they are, no surprise that they might go elsewhere. So how do you create leverage when it doesn’t feel like you have it? I think it is how do you actually respond and work with them. How do you create a differentiation when there isn’t one? How do you bring more, a higher level of customer service?
How do you bring a higher level of responsiveness? If you’re truly undifferentiated oftentimes it will come down to price. So what are you doing to meet their interests outside of that, before you’ve gotta actually discount, have you explored every possibility whether it is through know, a customer service plan or warranty, or a creative volume agreement?
What are the things that you have done or the levers you’ve pulled are really creative that differentiate you? Like I said, at the end of the day, if you are not meeting your customer’s needs better than your competitors. Don’t be surprised when they go elsewhere. And so I think being able to list out what is everything I know about them, what do they care about?
And put kind of side by side what are the different solutions that we are bringing to the table. This one helps ’em with time. This one helps them with quality. In this way. If they go with this solution, it doesn’t meet their price interest quite as well, but it does meet these other ones. And figure out now where have you met them?
Where are your blind spots? And then take your competitors as well and do the same thing. What are they offering? And, oh, they actually, they can deliver this a lot faster. Or they’re bringing in an A team here, oh, we actually need to figure out how we can bring our A team? How can we deliver this a lot a lot quicker, right?
So actually systematically, deeply understanding what our competitors are offering so that we can match or improve it in those ways. And that, again, that comes back to what’s your customer care about. So spending a lot of time there. ’cause I think if you know that really deeply, you have a lot more leverage than you realize.
NM :
Hey everyone, Nolan here. I have to jump in and end today’s podcast for Part A of the show. Be sure to rate, review, and subscribe to the Negotiate X Podcast if you haven’t already. And join us next week for Part B of this awesome interview.
