Effective Strategies for Winning New Business with Mike Lander

Drew McLellan: 

Hey everybody. Drew McLellan here with another episode of Build a better Agency, and this one is a doozy. We are going to talk about how, how we pursue new business and we’re going to talk about where we think the process ends and actually how that’s just the beginning. And so it’s going to be a fascinating conversation. We’re going to talk a little bit about procurement for those of you that deal with that. But mostly we’re talk about sort of the pitch process or the proposal process and then the process of negotiating the contract after you think you’ve been awarded the business, but you don’t have a signed contract yet. So we’re going to get into all of that. For many of you, 2025 came out of the gate strong. New business was hot. And then around mid February about the time tariff concerns were really bubbling up, things have really slowed down. And so this episode is really timely as we think about how are we going to hit our new business goals for the rest of 2025, especially if we are still in a state of sort of economic uncertainty, as we are today. As I record this in April of 2025, if you’re not listening sequentially, hopefully if you’re not listening sequentially, by the time you hear this, we are out of this season. But if you’re listening in real time, you know that it’s a really interesting time economically. And there are some challenges that we are facing for sure. One way to solve some of those challenges is to grow our existing clients more. It is much easier to get somebody who’s used to giving you money to give you more money than it is to convince somebody who’s never given you a dollar to give you that first dollar. And so Danielle and I taught for the first time a workshop called Growing your existing clients in early April of this year. And it was so successful, people loved it, that we have decided to add it to the calendar again in September. So September 24th and 25th here in Denver, we will once again be teaching the grow your existing clients workshop. You will leave with a blueprint of how to do that, like, what it’s going to take in your agency, all the things you have to change to make that work better and stronger and more profitably for you. So that’s one way to think about 2025 and how you’re going to hit your new business goals. Another way to think about it is how do you show up in pitches, whether it’s through an RFP process or something less formal, and what do you do to make sure you’re in the right pitches, how you win the pitch, and most importantly, how do you close the deal after you’ve been air quotes awarded the work? And that is the expertise of my guest today. So Mike Lander has a really interesting background. So he for many years was on the business side of procurement. So he was the hiring, the buying side, and then he switched over and now he supports agencies all over the world as they figure out how to show up stronger, better, and more prepared for the new business process and winning the business and then negotiating good contracts after you’ve won the business. So it’s going to be a really great conversation. Mike is a font of knowledge, and I know he’s going to bring a lot of really tangible best practices to us today that you guys can deploy immediately. So without further ado, let’s welcome Mike to the show. Mike, welcome to the podcast. 

 

Mike Lander: 

Drew, thanks for having me. Really looking forward to it. 

 

Drew McLellan: 

Me too. So tell everybody a little bit about your background and the work you do every day. 

 

Mike Lander: 

So the most interesting, I mean, I’ve got quite an eclectic background. If anyone looks at my LinkedIn profile, they’ll see that there’s a definitely not a straight path, that’s for sure. The thing that probably most agency people are interested in is I’m an ex buyer, so I’m an ex procurement director. So I was on the buy side. Right now I work on the sell side. So now I kind of work with agencies, helping them understand how professional buyers work procurement. I help them qualify better opportunities, I help them win more proposals, and I help them negotiate better contracts, more profitable contracts. But I got into it because longtime consultant, lots of work on the buy side and then thought that actually I’d rather flip and work on the sell side. 

 

Drew McLellan: 

So I’m curious, how are things different now that you’re working with agencies? What have you learned since you flipped sides that maybe you didn’t understand when you were on the buy side? 

 

Mike Lander: 

Yeah, that’s a great question. Because it’s easy as a buyer. I think it’s easier as a buyer as A buyer, we have choice. We’ve got the money, we’ve got the choice. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

We can decide how we act. And hopefully I always acted with integrity, professionalism, but we have choice. When you’re on the agency side, and it wasn’t a surprise, but it was reconfirmation, is that some really simple things, for example, and we can cover a bit a bit more later on, Drew. But simple things like buyers got a choice agency. When I say to agencies, what’s your batner? What’s your best alternative to a negotiated agreement? What happens if you walk away? They go, well, I don’t have one, I don’t have an alternative. And that mindset, Drew, causes problems. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

Because it makes the agency want the deal too much. 

 

Drew McLellan: 

Yeah. They’re desperate. 

 

Mike Lander: 

Yeah. And a good buyer, I feel like. 

 

Drew McLellan: 

They only have one choice or I’m going to lose. Right, exactly. 

 

Mike Lander: 

Yeah. Whereas in fact, if you shift your mindset to if I’ve got a half decent pipeline of opportunities, then my alternative is work on other opportunities. If you’ve got a client that’s cutting up rough, is putting the screws on too hard, negotiating too hard, focusing too much on price, my advice is don’t work with them. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

You’re better walking away from a bad deal than living with a bad deal for two or three years. It just doesn’t work well. 

 

Drew McLellan: 

And I think sometimes agencies forget because they’re so desperate for the win. And I think it’s emotional oftentimes as much as it is financial, but they’re so desperate for the win that they forget that this is the first date. And so if this is how the buyer behaves on the first date, it’s not going to get better after you’re in a relationship with them. 

 

Mike Lander: 

No, it certainly won’t. Consistency of behavior. They will always behave in the same way. Even if the CMO is playing the nice guy. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

Or nice person, should I say? If the CMO is playing the nice person and the procurement’s playing the evil person, yes, it’s a game. Yes, it still happens. Yes, it still goes on, but that’s going to continue through the relationship. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

And actually what it also says is that’s that’s never the truth. It’s a setup in some way. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

And you need to find out what’s it going to be like working with these people day to day. 

 

Drew McLellan: 

Right, Right. 

 

Mike Lander: 

I think the other thing that I definitely noticed a lot is the lack of focus on value creation by an agency and the lack of focus on differentiation. 

 

Drew McLellan: 

Yeah. So let’s, let’s talk about each of those for a second. So let’s talk about the differentiation. She. So I, I am a huge proponent at AMI of niching down being a subject matter expert, having something to talk about that makes you different than everyone else. So what are you seeing out there? And I know you work with agencies all over the world. Yep. What do you. So let’s talk a little bit about differentiation. When an agency looks like everybody else, how does that impact the buying decision from the buyer’s perspective? 

 

Mike Lander: 

So really interesting if you take, let’s take a simple process. Let’s say a brand has gone out to RFP or even some kind of soft tender and they’ve got five agencies and they’ve down selected to three. And in that down selection to three, they’ve now got three agencies that are going to go in a room and have a presentation for an hour. Say what’s actually happens in the background is those three agencies that are in the room are all pre qualified. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

I wouldn’t get people in a room on the buy side if I didn’t think they were all capable. So your proposal isn’t your differentiator. Agencies sometimes think, well, I’ve written a winning proposal. What you’ve written is a proposal that gets you shortlisted. 

 

Drew McLellan: 

Right. It gets you in the room. 

 

Mike Lander: 

Gets you in the room. It’s designed to get you in the room. That’s what it’s designed to do. So now you’re in the room, you’ve got to stand out. So when we as a buying panel sit back and go, we have three agencies, we, what do we think? So all the scores get collected and there’s a rational bit. I gather all the scores and I do all of the averaging and, and there’s normally a front runner and a midpoint and one that’s a bit further behind. But then the discussion turns to what was memorable, what made someone stand out, what did an agency do? And my advice is, in terms of differentiation, you’ve got to be challenging in the room, not unprofessional. You’ve got to challenge thinking, you’ve got to bring something different. What’s in your proposal? 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

You can’t recurate what’s in the proposal. That’s pointless. 

 

Drew McLellan: 

Yeah, they’ve already got to, they’ve seen. 

 

Mike Lander: 

It, they’ve read it, that’s why you’re in the room. So you’ve got to bring some new thinking into the room. So you’ve got to bring new thinking, challenge assumptions. Talk about, I Learned a great phrase many years ago when I was in consulting. Many, many years ago. Let’s say, Drew, you’re the client. If I said to you, drew, your problem is that your market share is declining because your creative copy is poor, you’re likely to go mentally. You’ve no right to say that. You don’t know who I am and you’ve no evidence. Let me try this instead. Drew, we work in your sector a lot. And what we find in the industrial sector, which is where you obviously sit, is that across the industrial sector, what we’re finding is a few winners, lots of losers. And that’s because typically what’s happening is there’s a creative problem, messaging, there’s a reach problem, there’s an engagement problem. Which of those of you got out of those three? 

 

Drew McLellan: 

Right? 

 

Mike Lander: 

I mean, I can see now you’re smiling, you know, your eyes lights up, you’re smiling. 

 

Drew McLellan: 

Well, you’ve proven to me that you understand my world, Right? 

 

Mike Lander: 

Yeah, exactly. And I’m not making assumptions about what your problem is. I’m just trying to get you to empathize a bit with me. Build a bit of rapport and do some credibility building. And open a dialogue. 

 

Drew McLellan: 

I was going to say. And create a conversation as opposed to a monologue. Right, Exactly. The difference there is. I’m not telling you your business. I’m telling you I understand your business and I understand your industry. So we can have these kinds of conversations all the time. 

 

Mike Lander: 

Right, Exactly. Right. 

 

Drew McLellan: 

Which I think is the foreshadowing of the kind of relationship that clients want with their agencies. And frankly, it’s the kind of conversations or the kind of relationship agencies want to have with clients. 

 

Mike Lander: 

Exactly, exactly. I mean, so if you look at the back to the. Well, how do we decide? Some agencies say, well, our methodology. Well, I’ve never bought anyone. Methodology. To me, methodology is. 

 

Drew McLellan: 

Every agency’s methodology is pretty much the same. 

 

Mike Lander: 

Yeah, broadly. Yeah. I mean, they’re all nuanced, but broadly, they’re the same. So I don’t buy for methodology. If you don’t have one, you’re not invited to the party. 

 

Drew McLellan: 

Right, right. Yeah. It’s a table stakes thing. 

 

Mike Lander: 

It is a table stakes thing, definitely. If you’ve not managed to codify how you do work and made it repeatable, you’ve got several problems. One is you won’t be making a lot of money. And two is clients will see you as a risk because you’re making it up every single time. 

 

Drew McLellan: 

Well. And they don’t want to risk their job by Taking the risk. Right, yeah. 

 

Mike Lander: 

Now that’d be crazy. So we’ve agreed that methodology is not a differentiator. Every agency says it’s our people. We’ve got amazing people. 

 

Drew McLellan: 

Yeah, like. Like everyone hired all the boobs. 

 

Mike Lander: 

Right, Exactly. Yeah. 

 

Drew McLellan: 

Right, yeah. 

 

Mike Lander: 

All the other agencies hired useless people. Right, okay. So that doesn’t work. But if you peel that bit of the onion back a bit further about people, what can happen is, for example, if you work in a. If you niche down, which I’m a big fan of. I used to work. I did some podcasts ages ago with Pat Flynn in the US and he is always about niching down. I think he’s absolutely right. I think you’re on the same train, is that if you look at an agency of 50 people and they’ve focused on one big industry, let’s say it’s financial services, for example, what is true is we’re different because our people really deeply understand the dynamics that go on in financial services. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

And I’ve got five people in the room, all of which have worked in FS for between 10 and 20 years. And let me just talk to Jane or Fred or Andy and let’s get them to talk about their experience. At that point, you start to go as a buyer. Okay. They really do have genuine depth of expertise in an industry. They genuinely understand about asset management and what goes wrong. And they genuinely understand how you market an asset management firm, for example. And they can show that because they’ve got 20 of our peers now, you can say, yeah, our people do make us a bit different. 

 

Drew McLellan: 

Right. Again, though, it’s the expertise, not necessarily that you have. All the smart people, so totally agree with you on that. So you also said one of the other things you think agencies sort of dropped the ball on is the value proposition. So talk a little more about what agencies think the value proposition is. How they show up in the room talking about the value proposition is versus what the buyer wants to see. 

 

Mike Lander: 

So. And this plays nicely into differentiation as well. So, you know, I’ve got a podcast like you have, and I interviewed a guy called Andy Bounds, who’s a sales consultant in the uk. Very talented guy. And he taught me something. Always learning. Like, you are probably drew everything. I’ve translated something. 

 

Drew McLellan: 

Yep. 

 

Mike Lander: 

Every day. 

 

Drew McLellan: 

Yeah. It’s one of the things I love about the podcast. For sure. 

 

Mike Lander: 

Exactly. Yeah. Same here. Absolutely. And he said to me, start with the afters. I said, andy, what do you mean? He said, well, when you talk to a prospect or when you’re in a room and you’re pitching. Start the conversation with the afters. After you work with us, what our clients find is sales increased by 15% over a 12 month period. Profit margins increased by 3%. Awareness index is increased by X. Start with the after, start with the results. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

And then work back into how we do that. So in terms of value creation, when you’re in the room and you’re pitching, you need to be talking to us about we’ve understood your problem statement. It was in the briefing document. We’ve understood where you are, we’ve understood your targets. Let’s talk about after you work with us over a 12, 24, 36 month period. These are the kind of results that we’d expect to be able to get for you based upon where you are today, where you need to get to. So that’s the first part of the value conversation is what are they trying to achieve in real hard financial terms and how are you going to help them achieve them? And then you back it up with, in my view, you then go and let me now show you some case studies of where we’ve done that. And the third thing then is there were risks when we did this for every client. Every client’s got different risk profiles, different risk elements. Let me just talk through where the risks are in achieving those kind of goals and delivering those kind of returns and how we manage those risks with you. So now you’ve got, I lead with results, I show you that I’ve done it before and I talk about risk. 

 

Drew McLellan: 

Because they’re going to want to be able to have that full circle conversation if they do work with you, obviously. Yeah, yes, yes, you’re making proposals, but they have to think through because they have to present internally to somebody. They got to sell it internally. Like they too have to go, look, if we do this, here are the risks or here’s how long it’s going to take. Or like you’re helping them fill in the blanks for what they would have to do to sell it up the food chain, if you will. 

 

Mike Lander: 

You are, you’re writing that story for them. I always say to creative agencies are always a challenge in this area because creative agencies say, well, I can’t prove the value of creativity. So I said, okay, so imagine you’re pitching and the three creative agencies and you’re one of them and the CFO is not in the room. But they’re going to spend $5 million in broad media spend across channels in a year. So someone’s got to go to the CFO and say why we should work with Agency X. If you can’t tell a story about where the money’s going to come from, when you spend 5 million, they aren’t going to pick you because the CFO is going to go, amazing. So they’re brilliant creatives. Yes, they are amazing. Where are the returns? Where do I get my 15 million for 5 spent? Well, we couldn’t quite get that out of them. Okay. They sound like they’re offer list. It’s no more complex than that. 

 

Drew McLellan: 

At the end of the day, again, to your point, probably everybody in the room is a great creative. They’ve done good work. If they’re in the room, they’ve done good work. 

 

Mike Lander: 

Correct. 

 

Drew McLellan: 

Yeah. 

 

Mike Lander: 

And you can actually evidence that. You can look around you and you can see their great work. 

 

Drew McLellan: 

Yeah. 

 

Mike Lander: 

You can point to it. 

 

Drew McLellan: 

Yeah. 

 

Mike Lander: 

So that again, although creative men, I want to hear this. Creative in some ways is table stakes. It can be a differentiator. So what I mean by that is again, all three of you broadly on an equal footing. If an agency’s managed to tell the value story and has shown some brilliant creatives, a great strategy and creative ideas, now you’ve got something really compelling. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

But if an agency’s just got amazing creatives and can’t tell the value story, it’s harder for the buying panel. But typically it would come down onto not price, but value and risk. 

 

Drew McLellan: 

Yeah, Yeah. I think we underestimate the time spent analyzing the risk factor of different choices in that buying room. Right. Like, I mean for us it may mean we have to lay some people off if we lose the client or we don’t get the client. But for the people in the buying room, they could lose their job. 

 

Mike Lander: 

Exactly. And they will. 

 

Drew McLellan: 

Or if they own the company, they can lose their company. 

 

Mike Lander: 

Yep. 

 

Drew McLellan: 

Yeah. 

 

Mike Lander: 

And in this environment, you know, the last kind of five years, we’re now in kind of April 2025. During the last five years we have seen the market change. 

 

Drew McLellan: 

Yeah. 

 

Mike Lander: 

We’ve seen the buy side go from long term retainers into many more short term projects or retainers that only have 12 month life cycle. We’ve seen smaller deal values, so average order values dropped. We’ve seen more tactical buying, we’ve seen segmentation of the value chain. So in housing, for example, brands are now going well back to in housing, how much do I in house, how much do I use an agency? The last two years we’ve had AI. So the advent of AI and what’s been going on and that will make a massive change to our industry. So we’ve seen lots of change, which. There’s change every year, Drew, isn’t there, in any industry. But there are some signs this time that things are moving in one direction and the pendulum might not swing back. 

 

Drew McLellan: 

Right, so let’s talk a little bit about. You mentioned that one of the things agencies have to get better at is qualifying better. So tell me a little bit more about that. 

 

Mike Lander: 

Sure. So in terms of qualification, the things you ought to be thinking about. So let me give you a kind of a bit of a checklist and then we can talk about perhaps individual ones. Drew. So opportunity comes in and your job as the kind of commercial lead, you could be the CEO, it could be commercial leader, is to say should we bid or not bid for this? And let’s assume it’s material. Let’s say it’s a 300k year contract of some kind. So first of all you ought to have a scorecard. If you haven’t got a scorecard that you consistently score things against, that’s a problem. So you better go and get one. 

 

Drew McLellan: 

Yep, agreed. 

 

Mike Lander: 

The kind of things that should be in that scorecard are things like this. Can we meet the economic buyer and or procurement for a meaningful discussion before submission? So if the rules of the game are you’ve got this brief or this RFP and it says you can’t meet anyone or talk to anyone. 

 

Drew McLellan: 

Yeah. You can’t call, you can’t meet. Right. 

 

Mike Lander: 

Can’t call, can’t meet, can’t have any human interaction until you get to the shortest presentation stage. My view is if you’re the agency that sat there going, well, I’ve never met these people, then in your mind place the idea that the response you’ll get after 50 person hours of work is you were a close second. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

You were a close second before you started. Because someone’s met the economic buyer and someone shaped the brief and it’s not you. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

That’s kind of number one. Second one is what we just talked about. Do we deeply understand the business issue, stroke, problem or opportunity that the client’s trying to solve and do we understand their sector? Well, if you don’t understand the sector and you kind of solve something similar before, but not quite, I’d say qualify out because it’s a stretch, you’re stretching competitor landscape. If there’s an existing supplier internal or it could be external, so it could be an existing agency or it could be an in house team. Why are they looking to change and what’s the quality of the work been like, if the quality of the work’s been okay or good to okay, and they’ve been there for three years and they’ve gone to market, the win rate is over 65% by the incumbent. So your chance of winning if it’s gone to five agencies is not 20%. It works out at about 5%. 

 

Drew McLellan: 

Well. And especially if it’s something that has to go out to market because it’s an industry that requires it. Right, yeah. 

 

Mike Lander: 

Especially in regulated industries. 

 

Drew McLellan: 

Yeah. Right. Yeah. 

 

Mike Lander: 

Another one is. So why are they changing from the status quo if they haven’t explained what’s wrong with what they do currently and why they’re dissatisfied and what targets they’re setting? Well, the chances are it’s just a process that they’re going through and you aren’t going to win. 

 

Drew McLellan: 

Right? Yeah. Right. This is a facade for a board or somebody, but incumbent is going to stay. Yeah, exactly. 

 

Mike Lander: 

Right. 

 

Drew McLellan: 

Yeah. 

 

Mike Lander: 

And then the last couple, just as a thought, if they haven’t given you a budget at all, it’s often a fishing trip because they don’t really. Either they don’t know or they do know and they’re not telling you, neither of which are good. And then if there’s no selection criteria, if they haven’t told you the selection criteria, chances are they haven’t worked out how they’re going to select. So I just start there. 

 

Drew McLellan: 

Right. We have these peer groups and we were just with about 25 agency owners and we were talking about. One of the trends we’re seeing is that agencies are finally getting a little more discerning about RFPs, and they’re not chasing after as many. And I think they’re finally recognizing both the hard and the soft cost of that pursuit. And to your point that in many cases the game’s already won and you’ve lost, like, even before you start to respond. And so being smarter about that, and to your point, just going through the literal checklist will save you a ton of time and money and frustration. I also think we underestimate the damage done internally when we keep coming in second. Like, I just think the morale damage of that is pretty devastating. Yeah, it’s huge. 

 

Mike Lander: 

I’ve had agencies I’ve worked with where they’ve been on a downward spiral. Qualification’s been a big issue, motivation’s down. And it’s not just the bid team, so it’s not just your new business development team because you’re bringing in subject matter experts from around the agency. So everyone’s starting to feel this weight off another bid, another second, you know, it starts to become a chain around your neck. 

 

Drew McLellan: 

Yeah, I want to talk, I know you talk a lot about sort of how to negotiate contracts. I want to dig into that. But first let’s take a quick break and then we’ll come back and we’ll talk about the other side of that conversation. Hey, everybody. I know you’re anxious to get back to the show and so am I, but I want to remind you about the premier event for agency owners and leaders that is coming up right around the corner. I am proud of many things we have done at Agency Management Institute, but I’m probably most proud of the Build a Better Agency Summit. I knew there was a need, a hunger for a conference for real small to mid sized agencies. I’m talking five people, 10 people, 100 people, 200 people, where we can come together and we can learn together. We can share our own experiences. We can have killer keynote speakers, breakout speakers, over 30 different roundtables you can participate in where you’re with a subject matter expert and other agency owners who are challenged with or interested in the same topic. And we have knocked it out of the park. This is our fifth year. Over 75% of the people who attend one year come back again in a subsequent year. So I know we’re doing a lot right. We would love to have you join us. Head over to agencymanagementinstitute.com and in the upper left corner there’s a tab says Baba Summit. You can register now. It’s May 19th, 20th and 21st. We would love to have you join us. We would love to have you come learn with us. We would love to have you come teach what you’ve learned to other agency owners and leaders. This is an incredibly collaborative, cooperative community and you can be a part of it for three days. And I promise you, you have never gone to a conference like this one. So please join us. All right, we are back with Mike Lander and we are talking about the process of winning new business. And again, whether it’s a formal RFP or it’s a request for a proposal or what, whatever it may be, at some point in time you need to sort of think about actually negotiating the deal. So you’ve gone through the process, you have either been shortlisted or even selected, but now you’re actually codifying the deal. Yep. So, Mike, what do we do wrong? 

 

Mike Lander: 

So let me start with some principles. So let’s talk through some negotiation principles and then let’s Have a discussion around them. The first thing is, relationships matter. So don’t go in like a firecracker when you start negotiating. Second thing is, do your homework before you go in. So imagine this, Drew. Let’s say it’s a full service agency pitch and you’ve spent 50 person hours on the pitch. So you’ve invested all this effort, all this time, all this attention in the pitch, and now you’ve been told, we think you’re the one we’re going to work with, subject to a negotiation. And your negotiation preparation is in the cab in 20 minutes on the way there. So do we think that’s a good. 

 

Drew McLellan: 

Idea or it’s the document you had to produce three steps ago in the written response and now you’ve learned a whole bunch of things, but you have not spent time revising that document exactly. 

 

Mike Lander: 

So you’ve not worked out what your negotiation variables are. You haven’t had a guess at what their objectives are and what your objectives are. And so you don’t know what to trade. And what you end up in is if you don’t do your homework. Often what happens is it’s a discounting conversation, a price chipping conversation. Another one is, have you got a batna? So have you got a best alternative to a negotiated agreement? There’s a great book by William Ury and Roger Fisher called Getting to Yes. Any agency leader that’s not read it should have done by now. It’s a brilliant book on negotiation. So you might think, Drew, well, I’m at the end of the kind of road. I’m negotiating a deal, which means that I’ve kind of won. And the problem is a professional buyer sits there and goes, if I start to see that you think you’ve won, I’m going to apply leverage, right? I’m going to see how far I can go without breaking you. But I’m going to apply commercial leverage because you’re desperate for the deal. That’s just a bad place to be. I’ve got this big kind of almost a strap line for me, which is stop discounting and start trading. So what’s happening there is. And we might just kind of delve into that a little bit right now, actually. I’ve been asked to do a piece of work and it’s quite late in the day to find the supplier and get the work done. And so what I’ve said to the buyer, to the client is, okay, fine, so you’ve got a budget that’s outside of what I would work on. Here’s my usual fee structure. And here’s the usual timescales, I can do this piece of work, but under a few conditions, I’m prepared to trade a commercial structure in exchange for a whole bunch of things that I need. So I’ve not discounted at all. Because if they ignore everything I’ve asked for and say, just do it for X, I’ll say, no, thanks, I’m not interested. Right, so what you’re doing here is let’s say the bid for Your fee is $100,000 and the buyer’s coming in and you’ve agreed an outline scope and some targets and KPIs and contract terms. And the buyer just comes in and says, yeah, no, we haven’t got 100,000, we’ve only got 75. That’s a 25% chip. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

If the agency responds with, I can’t do 25%, but I could do 15, the game’s over. Yeah, the game’s over. Yeah, because you’re going to end up at 22 or 23% off and all your profit margin’s gone. You’ve not changed the scope, you’ve not changed the targets, you’ve not talked about bonus structures, you’ve not talked about payment terms. You’ve noticed. I mean, the list goes on, Drew. And so if someone’s listened to this podcast and walks away with nothing else, I would say to them, stop discounting, start trading. 

 

Drew McLellan: 

Right, so what kind of things should agencies be thinking about that’s on the potential to trade list? 

 

Mike Lander: 

Again, people think procurement are the police. We’re not. Clearly, anything’s up for grabs. What’s the worst? They say no. 

 

Drew McLellan: 

Right? 

 

Mike Lander: 

Those simple things that should be on the table. And scope for sure. Scope and deliverables. That’s the first easy thing. What’s the scope? What’s the price? What? Deliverables. So if they’ve got less budget, well, then you reduce the scope and reduce the deliverables. That’s one thing. Second, KPIs, what are their targets? Might have three target KPIs. Well, if they want to have a different budget, then as David Meikle, a friend of mine, would say, then it’s a lower investment while lower investments get you lower returns. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

So therefore we’re going to reduce the KPI thresholds. Another one could be payment terms. So they might pay on 90 days standard. So 90 days monthly net. So you could be at 120 days. Well, your terms are 14 days on invoice in advance. That’s another one. Contract term. Very simple. A lot of brands will offer you a three year term. So it’s three year contract and you go, that’s amazing. But what you forget to understand is they’ve got termination for convenience rights. 

 

Drew McLellan: 

I was going to say they have a backdoor, right? 

 

Mike Lander: 

Yeah. So their back door is I can terminate on 30 days notice at any point for convenience, not for performance, for convenience. So a negotiation trade would be. I get why post Covid, that’s a red line for you. I understand that. So now you’re empathizing with your counterparty. However, we incur quite big upfront costs and our first year’s hardly ever profitable on any job, no matter what happens. So what I’d like to propose is 18 months termination for performance only and then termination for convenience on three months notice. So now you’ve got a more commercial discussion. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

The other big piece of advice I’d give is I did a lot of research last year on the negotiation skills of sellers. And when we ran all the research over about 200 salespeople, of which 60% were agencies, something really interesting came out which was we looked at negotiation outcomes and then negotiation characteristics, that is skills, and we correlated them and those commercial people that are negotiating contracts that got the best commercial outcomes that they’d stated. The biggest correlating factor was the trust builder archetype wins far more deals than all the other archetypes. They get better negotiation outcomes. So if you start with I’m going to be a trust builder with my counterparty and I’m in it for the long run, I’m going to take time to negotiate, I’m going to listen more than I talk, I’m going to be reasonable, empathetic, I’m going to trade and. 

 

Drew McLellan: 

I’m going to be prepared. 

 

Mike Lander: 

I’m going to be well prepared, really well prepared, and I’m going to keep re preparing each time we go through a cycle, then you’ll get better outcomes, you’ll build better long term trusting relationships, and when things do go wrong, there’ll be far more forgiveness. And long as you fix it quickly, we just move on. So my second bit of advice is be a trust builder. However, Drew, one thing about the trust builder, because people do misread this occasionally. You can only be a trust builder if your counterparty is prepared to also build trust. If your counterparty’s buying a commodity and they see hundreds of agencies that can provide it at a commoditized price with virtually no impact on their business, you can’t be a trust builder. Because they won’t care enough. 

 

Drew McLellan: 

Right. Because the trust builder could look like I’m going to give away the farm. Where’s the line between trust builder and stooge? 

 

Mike Lander: 

The characteristics of a trust builder are things like preparation, understanding that person’s business, walking in with a prepared mind and talking about them and their business and their industry. So there was a very famous piece of work done years and years ago called the trust equation. And it was in a book called the Trusted Advisor by a guy called David Meister and the Trust, which you probably know, drew, for the audience that may not know it, the trust builder equation goes something like this. Trust equals credibility plus reliability plus professional relationship building divided by self interest. So when you’re building trust with someone, what you’re doing is you’re building credibility. I know your industry, I know where you sit in the industry. I understand your issues. I’m empathizing, I’m building credibility. And I’ve got insights you may not have seen. Reliability. I’m going to do what I say or do when I say I’ll do it. Relationship building. I’m going to build a professional relationship with you over time, which takes time, and that will build trust. And then remember that divided by self interest. I’m going to spend far more time tuning into you and your agenda than my own. Now, you can replace self interest with risk. I’m also going to spend far more time talking about your risks and understanding how to mitigate those risks than anything to do with my risks. And so that’s how you build trust. Whereas a stooge would try and build a relationship by doing all sorts of tips and tricks and then offer you lots of discounts, saying, I’ve Talked to my CEO, we can do a last minute deal, 20% off if he signed this morning. 

 

Drew McLellan: 

Right. That’s going to use car salesman. 

 

Mike Lander: 

Exactly. I’d go, I’ll take the 20%. Thanks, Drew. Now then, we’re not signing today. No, no, but. But the deal expires. No, no, Drew, I know exactly what’s happening. The deal doesn’t expire. It only expires if you walk away. And I desperately need you and I don’t desperately need you, and you’re probably not going to walk away. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

But I’ll take 20%. Thanks. 

 

Drew McLellan: 

Yeah. And you and I both have seen agencies fall into that trap more times than we can count. 

 

Mike Lander: 

Absolutely. 

 

Drew McLellan: 

Yeah. So one of the things that you talk about in your work is the negotiation wheel. Help us understand what that is. 

 

Mike Lander: 

Sure. So my framework for kind of approaching a negotiation comes in kind of five components. So let me just kind of talk you through the components. The first one is stage one is understand the context and define your goals. So before you meet this is before you meet any counterparty, when you’re negotiating, as in the formal bit of the negotiation, the back end, you sit down and you write down, what’s the context of this deal? What are their objectives? What are my objectives? What’s their walkway position? What’s my walkway position? You’ll make loads of assumptions, but you make assumptions and you write them down. The second thing is you then go, well, what’s the process and timescales over which we’re going to negotiate? Is this going to happen in eight weeks because they’ve got a budget meeting, or is it going to take six or nine months? Because it’s a very complex legal agreement and it’s in an area of the business which is highly regulated. They’re going to take their time and what the process steps, what steps are we going to go through from here to the end of the negotiation? And you’ll get it wrong, but write it down and send it to your counterparty and say, is this what we’re looking at? The third thing is you then prepare your deal variables, which is what we talked about before Drew, which is there might be seven things on the table that you can negotiate around. Well, write them down and then work out really simply, what’s my most desirable outcome? I the best I can get. And what’s my least acceptable outcome? I the worst I’ll accept. So now you’ve got two ranges, you’ve got seven variables, and you’ve got for each variable a range. What’s my best outcome? What’s my worst outcome? And that’s your range. And as one starts to move towards worst outcome, another should start to move towards the best outcome. And then the fourth stage is now you’re prepared and you’ve done your thinking and you’ve got your variables. Now you engage with your counterparty. Now you engage, you listen, you try and build trust, you empathize, you put the variables on the table, you start to negotiate. What will happen is you’ll go around that circle several times because you’ll do the first meeting you’ll get so far. You’ll then need to regroup, rethink, go back to the table and renegotiate as things start to change. And then when you’ve done that several times, the last thing you do is you’ll negotiate the service level agreements. The SLAs, the KPIs, and how you’re going to transition into operations. And that in itself is a negotiation as well. There are four steps which you keep iterating around. And the final step is you conclude around those contractual SLAs, KPIs, etcetera, and transition. 

 

Drew McLellan: 

And from what I’m understanding, you might go through the first four multiple times, because every time you walk away from the table, you have to start over again with, okay, where are they at now? Where are we now? And then you go through the same. The same preparation steps to go back into the next meeting. 

 

Mike Lander: 

Exactly. I mean, they may switch negotiators. I’ve seen it. Whereby a negotiator on the client side gets so far and then they switch it out and they get in the. 

 

Drew McLellan: 

CFO or someone like that. Right? Yeah, exactly. Right, right. 

 

Mike Lander: 

And that’s normally to get the last 10 yards of the deal. And it’s to do something that you don’t want. And you’ve got to be prepared for that. And that wheel helps you prepare. I understand where you’re coming from. Great to meet you. You start building trust. You take your time, you go back to the preparation table, you really think you come back again. And if the CFO says, look, I’m busy, I’ve got until 5:00pm today, it’s 2:00. Do the deal today or don’t do it. I don’t care about. I want 20% off. That’s what you said before. If they started dating that way, they’re going to continue like that when you’re married. 

 

Drew McLellan: 

Right, Right. 

 

Mike Lander: 

Don’t do the deal. 

 

Drew McLellan: 

Right. That is such a hard moment for agencies, as you and I both know. You’ve invested all this time. You have hundreds of hours in prep, in presentation, in all of that. And to get that close and have to have the discipline to walk away, that is tough. And that gets to having a. We could talk for another hour. That gets to having a robust enough pipeline and lots of enough opportunities that you aren’t in that desperate place. 

 

Mike Lander: 

Yeah. And another thing on that point, Drew actually is, let’s say they have brought the CFO in and let’s say this is a really big deal. Let’s say it’s a $5 million deal. Human beings don’t like to be cornered. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

So you’ve got to be really careful about putting the CFO into a corner where she says, 20% off, take it or leave it. The job’s done today. If you encourage them into that position, by being very standoffish and digging your heels in, that deal isn’t going to go anywhere. And then they’ve got a problem and you’ve got a problem. But they’ve got a best alternative. They’ve got agency number two. Not ideal, but they will go to the best alternative. My recommendation is if they bring in a new person, the cfo, I would rapidly just reset the negotiation by going. It’s great to meet you, Gillian. Thanks for taking the time. Can I just talk you through where we’d got to. Can I just talk you through what happened over the last, like, nine months of negotiations? If Gillian says, I’m going to stop you there, Mike, I don’t care about any of that. I just want 20% off. Rather than saying, we’re not doing that, I would recommend countering with. Understand that you might have budget changes, understand that things may have changed given the economic climate. Can we just talk through what kind of return you’re looking for, for what kind of investment? If she comes back again and says, no, no, no, I just want 20% off, I would say we don’t do that. We don’t just discount because we’re told it’s at 5pm, there’s a deadline. We can’t do that. That’s how agencies lose money. And you don’t want us to lose money because then we might be out the game and this is a big deal. So how can I help you think through for that budget? What could you achieve? What often happens then is they cut the meeting short and they send you back to procurement to finalize a deal. 

 

Drew McLellan: 

Right. It is an art and a science. That is for sure. 

 

Mike Lander: 

It’s an art and a science. 

 

Drew McLellan: 

Yeah. As we wrap up the hour, what is the biggest mistake you see agencies make? Like, if you could. If you could wave a magic wand and remove one mistake from every agency’s repertoire, what would it be? 

 

Mike Lander: 

The arrogance of believing that we are so brilliant at our creative work that clients will just buy us. 

 

Drew McLellan: 

Yeah. That’s a tough pill to swallow, right? I mean, when you’ve spent your whole career doing great creative work, it is hard to wrap your head around. It’s not enough, even though it isn’t. Right. Yeah, but you’re right. That’s a tough one. 

 

Mike Lander: 

It is. And I would recommend to any agency. I really admire the creative industry. I spoke to a brilliant guy a month ago for my podcast, a guy called Nigel Roberts, who was involved very early on with the Ogilvies, David Ogilvy and the Great Advertising Times. And he learned his craft. He’s a copywriter, a brilliant, brilliant man. And we were talking about, you know, creativity and the challenge, even more so now with the commercial agenda. And one of my kind of conclusions is that you must never give up that creative craft, and you must never say it’s undervalued. What you should be doing, though, is bringing in maybe someone different to negotiate the commercial arrangements, because going into a negotiation, emotionally charged is an utter disaster. If you try and negotiate with procurement from a creative director’s perspective, you will lose that deal. You may win the job, but you’ll lose the deal. 

 

Drew McLellan: 

Yeah. 

 

Mike Lander: 

Because procurement bluntly don’t care about the creative bit. At that point. They’ve been asked to sort out a. 

 

Drew McLellan: 

Contract, and they may not even be qualified to judge the creative. 

 

Mike Lander: 

They won’t be absolutely. I’m not qualified to judge creative work. There’s no way I’m qualified to judge that. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

So understand their agenda. Take your ego out of the room. And in fact, a guy called Kwame Christensen, who’s a US Negotiator, I was talking to him the other week, and we were talking about, or he was talking about the limbic system in our brain, the thing whereby that’s where the emotion comes from. And he said, if you walk into a room and someone’s emotionally charged, job number one, take the emotion out of the room, calm things down, get back to when the rational brain engages. Because there’s no point engaging in a negotiation with a highly emotionally charged counterparty. It won’t work. 

 

Drew McLellan: 

I think the other thing agencies forget is winning the deal is the beginning, not the end. And there’s nothing worse than landing a $5 million contract and being negotiated out of all profit. And so basically, you’re paying for the privilege of doing that work for the next three years. 

 

Mike Lander: 

Absolutely. It’s the trophy brand problem, Drew. 

 

Drew McLellan: 

Right. 

 

Mike Lander: 

Oh, we won this big trophy brand. It’s a Fortune 500. Brilliant. Okay. But we make no money on it. Okay, well, are you going to leverage that investment so that you leverage the use of that brand and the relationship, the brand, so that you win lots of other profitable work? It never happens. It never, ever, ever happens. 

 

Drew McLellan: 

Right? Yeah. Yeah. It’s a. It’s a slippery slope, that’s for sure. This is a. This has been a great conversation. You have provided a lot of really great tangible advice to our listeners. So I’m super grateful that you’ve been so generous with your expertise. Thanks for coming on the show. 

 

Mike Lander: 

Thanks, Drew. And I’ve really Enjoyed it. I always enjoy these kind of coffee shop conversations effectively. 

 

Drew McLellan: 

Me too. So, Mike, if people want to learn more about your work, they want to reach out to you directly. What’s the best way for them to do that? 

 

Mike Lander: 

Best thing is LinkedIn. So I’m always on LinkedIn. So, Mike Lander, on LinkedIn, you can also like. You’ve got a podcast. I’ve got one. Higgle the B2B Sales Club podcast. So h I g g l e Higgle the B2B Sales podcast. Listen to that. I have loads of great guests and hopefully, Drew, you might come on my show sometime as well. That’d be great. 

 

Drew McLellan: 

Oh, I’d be delighted. So we will include a link to Mike’s LinkedIn account. We will also include a link to his podcast in the show notes so you guys can find those. Because obviously, after listening to this episode, you’re going to want to keep listening to Mike and keep learning from him. So, Mike, again, thank you so much for being on the show, Drew. 

 

Mike Lander: 

Real pleasure. Thanks for inviting me. 

 

Drew McLellan: 

You bet. All right, so lots of takeaways. So the first thing I want you to do after listening to this is create that criteria list that Mike talked about. What makes an opportunity worthy of the time and effort that you are going to spend to try and win that project or client. As Mike said, if you don’t have that, and you’ve heard me say this before, you got to know who you can delight all of the time. Because that’s the goal is I want a client that I can delight, that that is going to value me, that’s going to invite me to the strategy table, that’s going to see me as a thinking partner, that’s going to value our opinion and our expertise. You need to know who you can delight and how do you show that in the procurement process or the RFP process or the proposal process. But it starts with understanding who’s the best fit for you. I think one of the big takeaways that Mike sort of underscored is it’s a mutual decision. They’re deciding if they want to hire you, but you should be working just as hard to decide if you want to be hired by them. Because again, winning the client, which I know feels great and it’s euphoric and it’s good. Winning the client and then selling your soul to keep that client is not good business. And so understanding who you can do great work for at a profitable level, that’s going to delight them, that’s going to help them keep their KPIs, they’re going to want to give you more money. They’re going to want to keep investing in you and have you be a part of their team. That’s job number one. And if you do that, you’ll stop chasing after some things that you shouldn’t. So you’ll stop wasting money, which means you can invest more time in chasing after the ones that would be a great fit. And lots of other great takeaways in this episode. So that’s homework number one, but there’s plenty of other homework, so go back and listen to it again or read the show notes and sort of note out all the things that Mike recommended because every one of them is spot on. So this is not a listen and forget it episode. This is do something with it episode. And you know, these are my favorite kind of episodes is when you leave with homework. So great, great lessons today that I hope you put into play very soon. Before I let you go, I want to thank our friends at White Label iq. They’re the presenting sponsor of the podcast. So for the last, gosh, five or six years they’ve been with us. And what they do is they come alongside agencies and they provide white label design, dev and ppc. And as you know, they were born out of an agency. So I’ve known these guys for 20 years. They’ve been, they were a client before they were a sponsor. So the agency side of their world is still a client of ours. And now White Label IQ was born out of that agency’s need to have faster turnaround, better skill sets around at that time, knocking out websites that were really great but also were profitable because as all of you know, that can be a challenge. And so head over to whitelabeliq.comami to learn more about them. They have a special deal for you if you’ve never worked for them before. And if you call them or email them or fill out their form, please make sure you tell them that A, Drew said hi and B, that you’re coming to them because of the podcast. I want them to know that their sponsorship is valuable. So help me let them know that we appreciate the fact that they make it possible for conversations like this with Mike to happen. So thank them for their sponsorship. Even if you don’t hire them, send them a little thank you note and just let them know you appreciate the show and you know that they help make it possible. All right? And guess what? We are marching towards the rest of 2025 together. I have been doing this, Gosh, I figured it out. It’s over. It’s almost 10 years we’ve been doing this show. Super grateful to come here every week and to learn from people like Mike. And I know I don’t get to do that if you don’t come listen every week. So here’s my promise. I will keep showing up with great guests like Mike if you keep showing up to listen and learn from great guests like Mike. Okay? I’m grateful for you. I look forward to spending time with you next week. Thanks for listening.