♖ This Book Made Us a Lot of Money

Intro

You are going to be a top 1% sales negotiator if you get to the end.

In this issue, I’ll break down:

• The 7 laws of sales negotiation that helped us 2x our deal size and led to our exit.

• Why "your competitor is cheaper" isn't about price.

• PLUS: An exclusive Q&A with Ron Hubsher (expert business sales negotiator), where he shares insights he typically reserves for his paid training.

While I'll share my experience from enterprise software, these principles apply to ALL B2B businesses–whether you're a lawyer, consultant, freelancer, or service professional.

Trust me.

The Discovery That Changed Everything

In Mercatus’ early days, we were selling enterprise software at ~$200K average deal size. Throughout my time there, one of my key missions was helping our sales team close deals faster.

I had a theory that seemed logical: "If we discount more, we'll close faster." Lower prices should mean less resistance and new logos, right?

But when I analyzed our CRM data, I discovered something surprising:

Deals with bigger discounts had LONGER sales cycles. 
Some of our highest-paying clients closed the fastest.

I initially dismissed this as a sample size issue. However, conversations with industry mentors revealed this was a "known secret" among successful B2B companies.

This led me to "Closing Time: The 7 Immutable Laws of Sales Negotiation" by Ron Hubsher— a quick read that helped shape a new perspective.

By implementing these principles (along with other strategic changes), we more than 2x our average deal size and accelerated our growth, ultimately leading to our successful acquisition by State Street in 2021. The company continues to thrive at State Street under the Charles River Development brand.

Don’t Be a Wet Towel

Ron writes this metaphor in the book that I haven’t stopped thinking about. If this is your only takeaway, I would be happy man.

B2B buyers do the same with discounts.

Once you start giving concessions, you signal there's more to be had. Our discounted deals at Mercatus turned into nightmares—endless meetings with legal, finance, and delivery teams, each extracting "just one more thing. Any new adjustments restarted the entire meeting cycle.

This is one of many reasons why discounting in B2B is a sure way to increase deal length.

When you learn to resist price squeezes early, buyers stop pushing and focus on getting the deal done.

What are the 7 Laws of Sales Negotiation?

These laws are sequenced by priority and build on each other.

1️⃣ You Must Be the Buyer's #1 Choice

Why it's important: Being the top choice lets you command a premium price. If you're not, you risk being leveraged against your competition.

Action: Confirm you're the buyer's #1 choice before negotiating, or go back and sell better.

2️⃣ Know the Financial Benefit Your Solution Creates

Why it's important: Focus on the financial benefit, not price, to speed up the sale and defend your value.

Action: Co-author and agree upon the financial benefits with the buyer.

3️⃣ Anticipate Getting Squeezed on Price

Why it's important: Price pressure is inevitable. Be ready to resist by focusing on your solution's value.

Action: Prepare 5 ways to respond to price squeezes without lowering your price.

4️⃣ Be Proactive on Budget & Remove Obstacles Early

Why it's important: Knowing the budget and decision-making process prevents pricing pressure and delays.

Action: Uncover the buyer's budget and decision makers early to secure future allocations.

5️⃣ Expand the Pie with Non-Monetary Trade-Ups

Why it's important: Offering non-monetary trade-ups can maintain your price premium while increasing value for both sides.

Action: Create a list of non-monetary "gives" that are valuable to the buyer and cost-effective for you.

6️⃣ Never Give Without Getting

Why it's important: Giving concessions without receiving something in return diminishes your value.

Action: Always ask for a trade-off when offering a concession.

7️⃣ Know Your Walk-Away Price

Why it's important: Being willing to walk away shows strength and can push the buyer to reconsider.

Action: Set your walk-away price before negotiations and stick to it.

Here is a high-resolution one-pager you can send to every sales member at your company.

EXCLUSIVE: Q&A with Ron Hubsher

Ron and I connected on LinkedIn and became friends. He graciously agreed to share his insights with The Moat community. Highlights of our convo below:

Me: What's the biggest myth around business negotiation?

Ron: "The biggest myth is that negotiation is confrontational. People imagine a barrel-chested person smoking a cigar, counting their hands on the table. But great negotiation is actually collaborative. As salespeople, we're trained as pleasers, so we avoid confrontation. Instead, think about using what I call the 'velvet hammer' – there's a nice way of saying no that actually helps buyers. When done right, you end up with a better deal AND deliver more value to the customer."

Me: When a buyer says 'your competitor is cheaper,' what's the next move?

Ron: "This is Law #1 – get price off the table. Always ask: 'If price wasn't an issue, would we be your number one choice? And why?' If you're not their number one choice, they're just using you to beat down the price of the real winner. Once you hear 'yes' to that first question, it becomes 'So you want to work with us, let's figure out how we're going to do that.' This takes away all that tension."

Me: How do you become the buyer's #1 choice?

Ron: "People don't buy price, they buy risk. If you can show you're the least risky solution, you've earned the right to command a price premium. Risk comes in two forms: business risk and personal risk. Everyone in the room will tell you about business risk – improving profitability, increasing throughput. But what's their personal risk? 'Because our software didn't work, I missed coaching my daughter's softball game' or 'I'm in here late every Sunday night. Always listen for emotional words in your discovery. When someone says something 'kills them' or is 'awful,' that's your rabbit hole into personal agenda. When you address both business AND personal risk factors, you become the clear number one choice."

Me: What separates A+ players from B- players in sales negotiation?

Ron: "It comes down to two things: preparation and confidence. They're self-reinforcing – the more prepared you are, the more confident you become. The more confident you are, the more you tend to prepare. Average reps typically use only 1-2 of the 7 laws, while elite negotiators have a systematic approach to all seven."

Me: If you had just 30 minutes with any B2B SaaS company, which laws would you focus on?

Ron: "The laws are written in order of importance. You can go through all seven in under seven minutes, but I'd focus most heavily on Laws #1 and #2. Make sure you're their #1 choice, and know the financial benefit your solution creates. And remember what you said earlier – make it collaborative. Anytime you bring someone a number they didn't have a hand in creating, they'll argue with it. Build value collaboratively: 'What do YOU think? How will this affect YOUR business?”

3 High-Impact Actions to Implement Now

As a consultant, I've seen these three laws create immediate results for my clients. You can implement all of them within two weeks:

1. Calculate your solution's financial benefit – Create a simple ROI calculator (or back-of-the-envelope calculation) that quantifies your value in customer terms. This puts you in the driver's seat.
   

2. Practice price-squeeze responses as a team – Run recorded role-playing sessions where your best reps demonstrate how to handle discount requests. Make this a regular team exercise. Require this step for a new sales onboarding process.
   

3. Create a formal give/get framework – Document what you'll ask for in exchange for any concession (case studies, referrals, longer terms, etc.). Never give without getting something valuable in return. Make this systematic at your company.

Want To Go Deeper?

Reach out to Ron.

Ron is CEO of Sales Optimization Group (www.salesog.com), an international sales and negotiation training organization with an impressive client roster including Google, Oracle, ADP, Adobe, Prudential, Morgan Stanley, Walgreens, Kimberly-Clark, Comcast, and Thomson Reuters.

• Email: [email protected]

• Phone: 650-520-9849

• LinkedIn: Ron Hubsher

In summary, don’t be a wet towel.

Til next time,

—Ali Mamujee

P.S. If you found value here, please share with people on your team who might benefit. Each share helps The Moat grow.

P.P.S. Unlike those corporate newsletters that come from [email protected], I actually read every response! Hit reply and tell me the areas top of mind in your business. I promise it won't disappear into the void (and yes, it's actually me reading, not some AI assistant pretending to be human).

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