Today, we’re breaking down the negotiation tactics from my #1 all-time rep, Morgan Melo. When I was Pave’s VP of Sales, she closed $750k as a Mid-Market AE in a single quarter before moving onto Enterprise, where she then closed dozens of blue chip logos like Doordash and Okta:
- Master discovery efficiency to defend your price
- Deliver price without overjustifying, shut up, and laugh
- Create give-gets based on the 3 types of negotiators
Let’s dive in.
1. Master Discovery Efficiency to Defend Your Price
If you uncover massive problems in discovery, it’s really hard for a prospect to justify a discount when you’re paying back your solution 10:1.
Morgan’s secret sauce is that she’s massively efficient in discovery. The more efficiently you can identify a problem, the more likely your prospect is to realize that they’re in the right hands with your team.
She does 3 things to nail discovery efficiency:
1: Lead with a hypothesis on the problems you think they have. For example, Morgan sells compensation software at Pave. If she sees her prospect grew from 40 to 150 employees, she might focus on hiring (rather than retention or compliance) and say something like:
“I saw you’ve tripled your headcount in the past year. Usually when clients have grown so quickly, we make sure they can create compelling compensation offers to hire all the A-players they need, without overspending industry averages. Would reviewing that be a priority for today?”
2: Ask “Typically” questions to isolate the problem. Instead of: "Tell me about your process" – Morgan uses typically questions to steer the prospect into common problems she knows she can solve:
"We typically see companies at your stage trying to analyze compensation data from outdated spreadsheets, paying for expensive analyst reports, or combing through unreliable social media sites. Which one of those are most relevant for you?”
3. Once you find a problem, trade a story. Instead of interrogating your prospect, use stories to show them that they’re not alone in feeling the problem and you’ve helped other people solve it:
“What you mentioned about forecasting challenges reminds me of our customer, Acme Manufacturing. They were losing about 15 hours a week manually reconciling data. They started using our centralized dashboard and cut the process down to 30 minutes. Has your team experimented with any other workarounds for forecasting?"
2. Deliver Price Without Overjustifying, Shut Up, and Laugh
Once you’re on the negotiation call… the quality of your discovery should tell you whether or not you’ll even need to discount.
And now the key is delivering price without shying away from it, over-justifying it, or caving on a discount too quickly.
Morgan delivers price without hesitation in 4 steps:
- Explain how pricing works with implementation fees, seats, products, etc.
- Give the number and SHUT UP. Wait a few seconds, then ask: “Is that within the ballpark of what you’re thinking?”
- Laugh when they ask for a discount: This sounds ridiculous, but you need to make it seem like they’re the ones who are out of line for asking for a discount.
- Ask what’s prompting the discount: You might say something like: “Tell me about this $50k you mentioned. Let’s be transparent about what you need, because I know we’re not able to meet that number.”
From here, you’ll get a sense if their ask is real… or if they’re a trophy hunter who just wants a win. Which brings us to the final step...
3. Create Give-Gets With The 3 Types of Negotiators
From here, Morgan buckets her prospects into 3 types of negotiators and has a different approach for each:
- The Trophy Hunter just wants to feel like they "won" something... For this one, treat your ARR like it’s gold but give them alternate “wins” like flexible billing terms, free months, or product seats.
- The Competitor stacks you against a competitor who is ⅔ the cost. Don’t negotiate price until you know you’re their number one choice. From there, remove value based on what that competitor can’t do: “My understanding is that competitor X doesn’t do these things you said were important. I can take this product out of our scope to reduce the cost, would that be better for you?”
- The Budget Guardian actually can’t exceed a fixed budget. For these ones, you’ve gotta help them sell internally and push for power. You might create a roadshow deck that they can use to justify a direct call with a CXO.
That’s a wrap folks! If you liked this one, Morgan has one of the most downloaded episodes of all time on 30MPC right here – check it out.
