In a negotiation it’s important to avoid opening first if you can, because if the other person opens first it might be good news for you, and that would be good news that you would never have received if YOU had opened first.
For example, if I can get the potential Vegas conference to open first they might offer me $20,000 to do a talk, when I was only going to ask for five, expecting to end up on three! Or if I was buying a company and I get them to open first, and they say they are prepared to sell it for $1 million, thank goodness I did that because I was going to offer them $3 million, having estimated that it’s worth $4million (perhaps wrongly – maybe it’s only worth $1.5m, but my estimate is all I’ve got to go on if I open first. And maybe nobody really knows that it’s worth, there are lots of ways to value things, especially complicated things like companies, but even the going rate for a conference keynote is hugely variable and debatable).
But I don’t want to talk about that!
My message in this post is that after you have got them to open first, it’s VITAL to ignore their opening offer, and talk about your counter offer, …to play at YOUR end of things.
Yes, get their opening offer in case it’s great – although you are then still going to say it’s nowhere near acceptable! (“Far too low” if you’re selling, “far too high” if you’re buying).
….and then you talk about yours.
Here’s a true story as an example – someone I know was buying a house, the price was $300,000 (the seller had opened first as is normal with houses) and she, the buyer, offered him $270,000. He appeared shocked and exclaimed “I can’t possibly go as low as 270, I’d need at least 272!” and she just said “er, OK then” and made $28,000 in under a minute!
(this is why you need my negotiating training course!!)
His mistake was to play at HER end of the pitch. Clearly he should have said “$270 is way too low, but I could come down to $298” and then she replies with “$298! That’s far too much. The most I can pay is $272” – etc.
So the rule is “Get them to open first in case you discover something great, but then talk only about your end of things”
So in my final example, imagine if you were applying for a job, and they are almost certainly going to offer you the job, but you still need to talk about money….
They’ll probably ask you how much you want, but don’t open first, because you might open too low and accidentally inadvertently give them a bargain. Because however much you know about the market, you don’t know about THEIR situation, how rich they might be, and how badly they might want you.
When they open, even if it’s a nice high offer, you must appear unhappy and counter-offer higher. If they offer a bit more, don’t be tempted to ask for a bit more than that, because then you are playing at their end – keep talking about your price and coming down from there.
And even if you have had to open first, the same rule applies. Either they’ll ask for you to come down a bit – in which case great, you’ve got almost your top number! – or they’ll then make a counter offer, in which case don’t ask for that plus a bit, say it’s not enough, and then come down slightly from YOUR number. Always playing at your end of the pitch.
Final point of clarification – and this is a whole other part of negotiation that I’ll deal with fully in another post, and on my training course, but everything is interconnected so a quick mention now – when you move from your previous position always trade: “If you gave me X then I could come down a bit” – because if you just come down then it looks as if your previous position was dishonest, just trying it on. You need a reason to come down. Here are some examples of trades that could be applied to my job interview example:
“If you added another week of holiday/longer notice period/share options/ option to work from home on Fridays to avoid commuting/ results related bonus …then I could to the job for £1000 less”. “Especially when the bonus or working from home would be win-win for both of us, and the extra days of holiday costs the company nothing because I’ll still do job fully by doing whatever hours are necessary.”
onwards and upwards!