Turning Difficult Conversations into Opportunities with Robbie Baxter

Hello, my friend, and welcome to another exciting episode of Negotiate Anything. Thanks for joining us today. With over 10 million downloads and listeners from more than 180 different countries, it's dedicated listeners just like you who have made Negotiate Anything the number one negotiation podcast in the world. I'm your host, Kwame Christian. I'm a business lawyer, mediator, author, and the proud CEO of the American Negotiation Institute. Now, before we get into today's insightful conversation, I have a golden opportunity for those of you who recognize the power of negotiation in your professional lives. Have you ever found yourself wishing that you could navigate those high stakes conversations with more confidence? Or perhaps you're looking to empower your team with the art of persuasion and conflict resolution? At the American Negotiation Institute, we've crafted specialized keynotes and workshops tailored for those very needs. We've transformed the negotiation skills of professionals worldwide and we're eager to do the same for you. We believe the best things in life are on the other side of difficult conversations. And our goal is to help you improve your lives and the lives of those around you, one difficult conversation at a time. Don't let another challenging conversation leave you second guessing. Click the link in the description to discover how we can help you find confidence in conflict, negotiate better deals, and have stronger relationships. Because in the world of business, every conversation counts. And now, without further ado, let's jump into the interview. Robbie, thanks for joining us today.

Oh, thanks so much for having me.

It is our pleasure. So how would you get us started? By telling us a little bit about yourself and what you do.

Sure. Robbie Baxter for the last 22 plus years, I've been focused on helping organizations build forever transactions with their customers, using Princip subscription pricing and thinking thoughtfully about the role of free and the role of community in their businesses. I started doing that shortly after being laid off when I returned from maternity leave from my product management role. And honestly, I haven't looked back since. Being an independent consultant and writer has given me tremendous flexibility and opportunities to do a lot of different things that I find really interesting and help a lot of people.

That is incredible. I love the fact that you were able to take that life pivot and turn it into something that was empowering and beneficial for you and your family too.

Yeah, I mean, no choice, right? And at the time I'm sure people said to me, oh, maybe this is a blessing and you know, lemonade out of lemons. But at the time it was. I mean, I remember it really vividly and honestly for about I'm gonna say like 20 years. I didn't. It wasn't a secret, but it wasn't something that I would bring up in a meeting like this. But a couple of years ago, I know you and I are both pretty involved with LinkedIn. A couple years ago, I was invited to comment there was a post that Jesse Hempel put up about, have you ever been laid off and what did it teach you? And I was like, you know, I should raise my hand here, you know, because a lot of people were getting laid off. And I just wanted to say, you know, hey, I. I survived, I thrived. It actually was, like you said, a pivot point. And so I started talking about it and I created a course for LinkedIn just a couple of months ago for LinkedIn Learning specifically on how to bounce back from a layoff. Because, you know, it can feel like a sort of a shaming experience. It can seem insurmountable, it can feel like rejection, but it's, as you said, it's often a pivot point to something better.

That's incredible. Yes. Kudos to you for owning that element of your story. And now you can share the learnings with people all around the world through LinkedIn learning. So this is great. And so, listeners, we will put links to Robby's business, her book, and LinkedIn learning in the comments so you can connect. And I think before we even get into how we can negotiate these subscription type of deals, before we jumped on the podcast, we were just chatting about the nexus between negotiating in the business world and negotiating at home. And so for you, when it comes to your life and your relationships, how has your ability to negotiate translated to your personal life?

This is such a good question, Kwame, and something that it brings up a lot for me. First up, being that in a lot of circles, negotiations considered sort of a. A dirty word, a thing that you don't want to do, it's pushy, it's aggressive, it's self interested. But a big part of negotiation is understanding what the other person really cares about and figuring out, is there a way that I can do that for them and still feel whole, feel good myself. So, yeah, that's really important in business, but that's important in my marriage, right? That, you know, if there's something that my husband wants or is interested in or wants to do, it's really important first to understand it. It's also important to understand other things that important to him. So that when we're crafting our life together or crafting a specific instance of our Life together, we can take all of that in context, and I have a better understanding of what's important to him. So it's not like he and I are at the breakfast table every morning negotiating our lives, but we're making decisions all the time that affect not just both of us, but our entire family. So I think that's one place where negotiation is important. And then, of course, the best negotiators in the world are your children, right? Because they really understand what makes you tick. And so they can be very effective at using that to get the things that are important to them. So I have three adult children, my husband and I, and kind of the same thing. Understanding what's important to them, understanding the why behind the ask allows you often to come up with a solution that meets everybody's needs.

I love this. This is such a great synopsis, and it just really shows the power of negotiation to help our lives in general. Because our motto at A&I is, we believe the best things in life are on the other side of difficult conversations. And just that synopsis that you g is a great example of that. And I love the way that you articulated that. And I don't think I've heard anybody say it quite this way. When you talk about negotiation being about understanding and then trying to find a way to give the other person what they want while still staying whole, that is brilliant. And can you go deeper into that element? Because I think that'll transition really well into the business side, too.

Yeah. I think there's two parts to the negotiation, right. One of them is what the other person gets, and one of them is what you get. There are some people who err negotiation by just giving in, because they say things like, I don't want to fight. I don't want to be selfish. I just want to be done with this. This is, as you said, you know, the best things in life are on the other side of a difficult conversation. You're like, I just want to get to the other side and make it as not difficult as possible. And so that's not good. It's not good to not feel whole. It's not good to feel. I see all the time people accept I do, you know, consulting, and I sometimes mentor other young consultants who are sort of making their way, and they talk about, you know, oh, this part of the project I don't like. And I say, well, if you don't like that part of the project, either don't do it or charge more so that you feel good about it, right? Figure out what you have to do to feel good about the decision. So if somebody says to you, you know, robbie, will you do this distasteful task? I might say, no, there's no way I do it. But there might be certain conditions under which I would do that task. If it's for a loved one, if you pay me enough, if it will teach me something that's really important that I'm trying to learn right now, if it's framed in a certain way. So, you know, I think those are some examples of how to make yourself whole. And then on the other side, there are people who come into a negotiation like, you know, ready to go. Like, I'm going to get everything. Because people who say things like, negotiation is fun. I'm going to get as much as I can out of this other person, and I'm going to leave them with empty pockets. And I don't think that's good. I took a class in business school on game theory, and one of the things that we did is we experimented with. You play the game once, how are you going to play one negotiation? You're never going to see this person again. And then you do a similar negotiation where they tell you, this is your number one business partner. You're going to be having this negotiation, you know, whatever the price of wheat or something, every year, every season. And some years you're going to have the power, some years they're going to have the power. And you realize it's very rare that you're going to have a negotiation with somebody that you're never going to see again. A transactional kind of thing where it's like, I'm going to see this person once, winner take all, versus I'm going to see this person again and again. And so I want to negotiate the way that will help both of us expand the pie. Right. If the pie is bigger every time, then over time, we both end up with more.

I love this. And, you know, it's funny because, Robby, when people hear that, they say, okay, yes, expand the pie. Yes, we say that a lot. But then when we see people negotiate in practice, it's like we revert back to that tribal mentality where more for me means less for you and vice versa. And so before we even get into the specifics of how to expand the pie, let's talk about the mentality that is required in order to expand the pie.

Yeah, if you want to expand the pie, the first thing that you have to do is assume that there's plenty of Pie out there, right? And so you have to assume that there's abundance, that there's a lot. And you have to go into this discussion with an element of curiosity. Who is this person? What do they value? Right. I know that they value money, let's say, if it's. It's a battle over or. Not a battle, but a discussion over the price of wheat. Right? I'm a farmer, and you're a merchant, and I'm trying to sell you my wheat. I might walk in and say, well, there's a commodity price and you're going to just buy it at that price. And I can't negotiate. But if I get curious and I try to understand a little more about you, I might not even know what I need to know. But what are your dreams? What are you trying to do? You know, what kind of store do you own? What kind of family do you have? If I think about things more broadly, like, you might say, you know, yeah, I need to buy wheat. I need to buy a certain amount of wheat. But I also, you know, have a child who would love to learn to play piano. And you play piano, there's always something else to bring into it. So you have to be curious about the other person, and you have to be thinking about all of the ways that you can provide value to them. And you also have to think about yourself, what are all the things that would be good for me at this moment in my life? And I think when you're an entrepreneur and you're running your own business and you're, let's say, you know, in a situation where you're. Where it's closely held, so you don't have investors that you have to answer to, but it's your. Your business. One of the great advantages is that you can ask yourself, what are all the things I want this business to do for me? Right. So some people might say, I want this business to get as big as possible and make as much money as possible. But a lot of people say things like, I want to work with people that I like. I want to do work that is interesting to me. I want to continue learning. I want to make a contribution to the world. And suddenly you see how there's so much more in there than just the basic, make as much money, make as much profit, grow as quickly as possible. And so you want to be curious about yourself as well as curious about the other person.

This is great. I love this. So we're talking about abundance, the mindset of abundance. We can talk about how that is beneficial in general, in life. And it becomes really, really clear how it's beneficial here. Because if I assume that there's going to be more that changes the way that I negotiate because I'm going to say, hey, this is what the deal is currently right now on the table. I'm going to assume that through creative collaboration we can find a way to make this deal even better. That mindset is where it starts even before we get into the skillse and then introducing the element of curiosity as well. And I love the fact that you talked about we have to be curious about ourselves because I think we have this bias that we say, I already know what I want, I'm going to go in. But we don't take the time to explore our own mind, our own desires, and then also find places where we might be inappropriately influenced by other people or society to negotiate for something that we don't truly want at our core. So that self directed curiosity is really important in this process too.

Yeah, you bring it such a great, a great point that you bring up up some of the things that people might tell you are valuable you might not care about. So for example, if you're negotiating for a job, right, and you tell me, look, Robby, I can't pay you very much, but I can make you the senior vice president of blah blah, even though I'm not paying you very much, depending on what I value, that might be really great. Or I might say, you know what, you can call me the low level, unimportant person on my business card. I don't care, but just give me some money. I don't care what you call me. Like my grandfather used to, I don't want to care what you call me, just don't call me late for dinner. And so you want to know what you value. You want to be open to a lot of different things. And in a lot of cases, you know, there's something to be said. Sometimes in a negotiation you hold back, but a lot of times you want to let the other person know, these are all the things I value. If you're looking for a job, you can't give me more money or more salary. What about a bonus? What about a title? What about an office with a window? What about work from home? What about more vacation? All of those things. What about, I want to work on this kind of project. Can you get me onto this project? What about weekly lunches with the CEO, Right? You can pay me less if I can rub shoulders with somebody that I want to Learn from. So before you even get into a negotiation, it's worth doing a little bit of prep and a little bit of kind of quiet reflection on what the best possible outcome could be for you and for them. And one more anecdote. I have been mentoring this woman and she is a consultant and she had this situation where she just started being a consultant in the past year. She set up terms with a new client and she's not happy with the terms. Right. There's, it's a, it's a retainer relationship. She's well paid, but she's being asked to do a lot of things that she doesn't like to do. She didn't set it up right. And they keep asking her to do more and more of those things and they're constantly calling her and she said, you know, I just, it's going to be a horrible conversation and I'm just dreading it. But I really need to tell them that I don't want to do these things things. And I need to tell them that and it's okay if they fire me. You know, I said, why don't we reframe this, which is they love you, they're calling you all the time, they think you're really valuable, they're paying you a lot. And now you want to optimize the relationship going forward so that you can spend more time on the things that are most value add and they can pay a fair price for that. And it's going to be a great conversation. It's going to be an ex, you know them better so you better understand what they need and you can better structure something for them. And I think it really changed how she felt. Not just, you know, what she was going to do, but how she felt. Suddenly, instead of this being a painful negotiation where she was going to have to give them bad news, it was suddenly going to be a generative conversation where they were exploring ways to work together that were better for both.

Hello, my friends. Before we get back to today's episode, I want to ask you a question. Have you ever wondered how to elevate your team's negotiation game and how you can help the folks on your team have better, difficult conversations? At the American Negotiation Institute, we offer transformative keynotes and workshops tailored to empower professionals with top tier negotiation and conflict resolution skills. Whether it's a keynote for your next event or hands on training for your team, we've got you covered. Don't just negotiate. Master the art with the American Negotiation Institute. Click the link in the description to find out more, more Elevate, negotiate and succeed. Oh, that's such a great story. I think a simple way that we can summarize this is vibes matter. Because think about the mindset that you have. If you go initially, it's essentially like, this is going to be awful. It's going to be terrible. They're going to be mad. It's like we're going into war. And even if you win a war, you're going to take damage in the process. And so it's going to be an unpleasant interaction. But what you were able to do is with. Without even going into, like, strategies, tactics and things to say or anything like that, you just say, this is. You can just think about this differently. You can choose to create a narrative that actually serves you in the moment and that will completely change the way you carry yourself in the conversation. I think that is a brilliant reframe.

Well, here's the thing too, though, and I think this is hopefully useful for some listeners, both when it comes to the changing your frame and also to this abundance mindset, which is it is related. I think sometimes people say things like, oh, well, I'm going to just say, there's abundance out there, therefore I'm going to give you a lot. Or I'm going to just say, this is going to be a great conversation, because that's my intention. Even though I'm actually going to have to tell this person that I'm laying them off or I'm firing them for bad work or something where, you know, any sane person would be like, that is going to be very hard to make that into a. Into a joyful conversation. But what is helpful is to start there and then say, how do I make this true? Is this true? What is another way that I might look at this? And then you, you might get actual substance behind it. So, you know, the abundance piece. It's not that I'm saying I have plenty, therefore I'm gonna not negotiate with you when you offer to buy my car for a dollar. But I say, right? I think some people think that that's what an abundance mindset is. Yes, I'll give you my car because there are more cars out in the world and I'm sure another one will come to me with my good energy. And that has not been my experience, but my experience has been that when I look for ways to create more, when I look for opportunities to create more, this is what I always say in my subscription work to create more value, that people are happy to pay for. That's what we're looking for, more value that people. That's what abundance means. Where is more value that people are going to recognize? And that will give me more opportunity to get more of what is valuable to me. Right. You might be holding something that is not valuable to you at all, but is very valuable to me. And if I can figure that out and we can swap the car for the thing that you have that's valuable to me, maybe that old lamp that you don't like that I recognize as an antique, very similar to the one that my grandparents had, that has both financial and symbolic meaning to me. We might have a nice trade. So I think that's also important that you. That when you're reframing that you do it with some substance and not just. I don't want to say not just with hope, because hope is a wonderful thing, but with some grounding as well.

I think what you've just outlined for us is the difference between practical positivity and toxic positivity. Because if something objectively horrible is happening and then you say, hey, no, this is good to the other person, then it comes off as insincere or gaslighting or something that is generally not positive. But what you're doing is you're grounding this in reality. So we use that mindset of abundance and we say, hey, there is some positivity in here. There is some value in here. But I need to do the work before and during the conversation to find it. And it is a guiding principle that can orient us in a more positive direction. But we don't go in and say everything's great when it isn't. We need to do the work to actually make it positive. Yeah, this is great. This is really good. And it's like I said at the beginning, we have no clue where this conversation's going. It's going to be good. This is great. I want to go back to one of the things that you said about curiosity, because it was very, very profound. And I really want to highlight this because you said that when we're utilizing curiosity in these conversations, we might not even know what we need to know in order to expand the pie. But really our curiosity will help us to discover that just by asking the right questions. Can you go a little bit deeper into that element, too?

Yeah, I think, you know, curiosity. So some people we've all met people that are curious and even more than curious that are interested. Right. Which is nice. And I think there is a distinction there because Sometimes, you know, people, you feel like people are prying. Every once in a while somebody comes at me with, you know, they say they're curious and it, or they, you know, and it feels like they're prying. And so there's something else. There's an interestedness, there's somebody who wants to know you, wants to understand and does it with an intention of expanding the pie, doing more for both of us, helping each other, which can allow the other person to kind of let their guard down and share a little bit more. And there are some, you know, there are open ended questions that you can ask someone to learn more. I think homework has to happen first in many cases. So the homework can be as simple as thinking, okay, I'm going to meet this person. We're negotiating the price of wheat. Where does he sell his wheat? What else is he doing? Is he growing his business right now or is he close to retirement? Does he have a kid who's taking over if he's close to retirement or is he looking for someone to buy his business? What else does he do? What do I have? What are my assets? What are my strengths? What could I offer? And you sort of have that at the ready. And then when the negotiation happens, it's sort of like jazz. Like the difference between jazz and bad music is that the thing that often surprises people is that jazz musicians are actually very, very disciplined and very, very skilled. It's not like they just pick up an instrument and start messing around. They understand the frameworks and the structures and the shared rules and that gives them tremendous freedom for creativity. All that work they've done in advance and I think it's the, in negotiations. So, you know, being curious might mean, you know, trying to understand who that person is outside of the negotiation, trying. You know, I sometimes use little frameworks to probe in areas like what is their business goal, what is their personal goal, what is the quantifiable goal, what are the qualitative benefits? For example, one goal of submitting a negotiation might be, I'd like to finish negotiation today for any number of reasons, right? Because my end of quarter is tomorrow, because my daughter has a ballet recital tonight, because I'm losing my voice and I'm not feeling that well. Right? And so understanding all of those things helps you get to a better place. And that's what I mean, being interested in the other person, everything that's going on in their life, business, personal, qualitative, quantitative, financial, non financial. A lot of the work that I do, which is subscription strategy, the first thing that people often want is recurring revenue. But it might also be. And after I've done this for a long time, I can guess what all the areas of value are because I've done it enough times. But it's like, like I'd like to have recurring revenue so that I have predictable cash flow. I'd like to have recurring revenue because I want to sell this business and I know that subscription revenue gets a higher multiple than transactional revenue. I'd like to have a successful subscription business because my boss said at the end of the year we need to have a subscription business. And frankly, I don't even care if it doesn't make money. I just have to have a subscription business by the end of the year. We have a subscription business because we want to have an ongoing relationship with our customers who are more episodic. So like if you are a consultant and you do seven figure deals every two or three years with a company, you want to keep in touch with them in between, right? Or if you sell cars and people buy a new car every seven to 10 years, you want to be front of mind when it's time for them to buy another car. So how do you build an ongoing relationship? So I know these are things, but then there's also the non financial ones, like them saying, this is on my to do list. This is on my goals for this quarter. My boss keeps asking me about subscriptions and I'd like to have an answer for them. And that's the goal. So understanding all those things, I actually put those things into the objectives for my contracts. Right. Sometimes it's these two people on my team keep fighting about whether or not we should have a subscription business. I'd like you to resolve that once and for all. I had a client one time that said they were an accounting software company and they said, you know, a lot of our board members think we should have a free offering because that's really popular right now. Freemium is what everybody's doing. I, the CEO, don't believe that we need to do that. But I would like to shut this argument down once and for all. So for the next six weeks, can you please figure out if there's any reason to ever consider free? So I did a whole project on what's the role of free, primarily to stop the conversations.

Wow, this is great because it's revealing the fact that it's never, or let me say, rarely cut and dry. Very, very straightforward. Once you actually get in there and actually start to gather information, you Start to realize the beautiful nuances within each of negotiations. And with the time we have left, I want to give you an opportunity to kind of set the stage when it comes to these subscription type of deals, because it's a really unique element of business. And so if you could just outline for everybody, when we're talking about subscription services, let's not assume everybody's on the same page and then let's talk about how you typically go about negotiating those deals.

Yeah. So there's two ways of thinking about this question. One of them is I help organizations. This is my work that I do is I help organizations build subscription models for their businesses that result in forever transactions, ongoing relationships with their customers, where the customer takes off their consumer hat, puts on a member hat, stops looking for alternatives, trusts the company pays monthly or annually, forever. Right. And that could be any kind of business. So, you know, I've worked with Microsoft, really big company, software company, but I've also worked with the Produce Box in North Carolina, which is a closely held small business where they box organic farm products for a group of people who subscribe and they get a box every week and everything in between. So physical product, subscription hardware, software content, obviously. So how I negotiate with prospective clients or how I structure deals takes a lot of work up front to first maximize all the value and then come up with a price. Right. But the first thing to do is to figure out what do they really want and why do they want it and what would make it really successful and how would they know if it was successful? What would be the indicators early on? Because it's not just that I want to get the deal. I don't just want them to sign the contract. I also want them to be happy with the results, refer me to other people and hire me again. So it's not just about the transaction, it's about the relationship. The other place where I think negotiating might come into play is with the offer itself, the subscription. And one of the reasons a lot of my clients want to have subscription businesses is they want to move away from custom pricing. They want to move away from having to ask each prospective customer, what do you need exactly? And let me design something exactly for you and then figure out exactly what that's worth. They want something that's more configurable rather than customizable. And they want to optimize for a whole group of people rather than each individual. And I think companies go back and forth between whether or not that's the right way to be because on the one hand, mass personalization. You want to do the right thing for each individual. But on the other hand, if you have something that's consistent, you can offer it at a better price, usually, and you can deliver it much more quickly and efficiently, which for a lot of customers is really valuable.

Yes. Oh, this is great. Selfishly speaking, this is great because we're thinking about different services, but also it's great because it really highlights the intricacies of this type of model, because we can now understand why it's beneficial to have recurring income for a company, but not just the recurring income, but also ease of delivery, relatively speaking, because it can be more replicable. But then also, we recognize in getting to that path, there are a lot of internal negotiations that have to occur. There are different factions within the company that want to do it differently, and we have to resolve those conflicts in order to get a unified front that we could put forward for our customers. Yeah, yeah. Oh, this is great. This is great. And. And before we wrap, I want to highlight one element of this. When you think about those internal negotiations within teams, when they're trying to figure out the best way forward, what would you say is the biggest challenge that you see most frequently?

So within an organization, when you're negotiating, first of all, it's important to recognize whether you're negotiating or whether you're ideating, brainstorming, what have you. So understanding how the decision is going to be made in a negotiation, you have your batna, your best alternative to a negotiated agreement. If you're an employee in a company and you're having a discussion with your boss about the best way forward, the truth is, your boss gets to decide. They're interested in your opinion to some extent, but they're the one that's going to make the decision. You're your batna is I can leave the company. Right. And so I think one big mistake that people make is they don't understand whether they're negotiating or they're just helping somebody come to a good conclusion or putting their input in, which is a different thing. That's not a negotiation. It's like when my kids were little and they used to want to negotiate bedtime. I'm like, this is not a negotiation. We are not equals having a discussion about what we both think is the best bedtime. I hear you. And I might be flexible if you said, oh, you know, there's a. A special program tonight, or it's fireworks, or can I stay up late? And I'll. If I promise that I'll be in a good mood tomorrow. But it's not a negotiation. It's not always. I think that's probably the biggest issue. And then I think the second thing is, well, three things. So that's the first one. Second one is not taking the time to think through the pie being bigger, to sort of understand what the other person wants. This is more in a peer relationship. So you and I are product managers and we have to decide who's going to do the heavy lifting for the project and who's going to get all the glory of being on the stage. Let's say I have to remember that if I take all the glory this time, then the next time we have to negotiate, you might not be very inclined to be generous when you have the upper hand. So thinking about that, that this is an ongoing game that we're playing, I think that's also really important. So the relationship. And then the last thing is that expanding the options. You and I are, again, we're colleagues. We're both product managers. We sit next to each other and you say something about you want me to do the work because you want to home early because you have an important family event. I might say I'm glad to do it, but I would also like the opportunity to be on stage with you to present it because I'm trying to build my profile here. And you might say, oh, that's totally fine. In fact, I've been on stage a ton lately. I would think of it as a gift. If you would do the presenting, that would be even better. You don't even know until you ask. If I didn't tell you that I was a little envious that you always get the airtime, how would I even know that? You didn't care about the airtime and you were glad to give it to me. Me. And you would gladly give me something that was incredibly valuable to me in exchange for something that's valuable to you and less valuable to me, which is time. In this made up scenario, I think those are three things. Three things to keep in mind.

Wow, this has been a masterclass, Robbie. I really appreciate it. Before you go, I want to give you an opportunity to shout out your book, your LinkedIn learning courses, and how people can get in touch with you and work with you.

Yeah, absolutely. So the easiest place to find me, robbiekelmanbaxter.com that's my name. It has everything. It has the LinkedIn courses, my two books. Books, the Membership Economy, and the Forever Transaction, has a link to my podcast subscription stories True Tales from the trenches. For those of you who are who are working on forever transactions and please feel free to reach out. Follow me on LinkedIn. I post every day. I'm always, always interested in what people are thinking about and where I can be helpful.

This is great. Robby. Thank you again for joining us. Really appreciate it.

Real pleasure.

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