Negotiation is a conversation
I’ve been wrestling with my starting sentence for this piece. Because what I want to say is “Everyone has an opinion on how to start a negotiation,” but I’m willing to acknowledge that maybe not everyone has such an opinion. But opening with “Most people have an opinion on how to start a negotiation” feels unnecessarily wishy-washy.
A lot of folks advise you never to throw out a number first. Let the other side do so. That can work — sometimes! But if you’re thinking the thing is worth $10,000 and the other side offers $100 to start things off, you’ve let them set the tone in a way that doesn’t serve you well in this negotiation.
The risk, some might say, is this: What if they’re willing to pay $30,000?! If you open the negotiation at $10k, you forfeit that $20k upside!
That’s true. And I understand how capitalism works, and I understand you want to extract the maximum value you deserve for what you’re selling. But I’d also note that if you were willing to sell the thing for $10k, and you think that’s a fair and good price, you’re not forfeiting anything if you successfully charge them $10k. And while I wouldn’t fault you for saying yes to $30k if that’s where they started, you’re also charging them 3x what you pegged the value at, which isn’t necessarily the best long-term path to building a great relationship with them.
And you’ve no doubt heard — and likely internalized! — advice that if you want to charge $10k for the thing, you need to come in higher, so that you can land on $10k. I get that advice, and it’s absolutely valid… If you intend to make your negotiation a game.
To be clear, I’m not saying that dismissively. Sometimes you can tell that you’re dealing with someone who wants to negotiate. Or if you’re doing a deal with someone you’ve done other deals with before, sure, you know how they handle these conversations, and you can plan accordingly.
But many, many people dread negotiations. They fear they’re going to “lose” or get taken advantage of or fare poorly. If I offer a price and the other person doesn’t counter, I’ve absolutely worried that I priced too low. If, as a buyer, I counter and a person says yes, I wonder whether I could’ve paid even less. That’s human nature. Negotiating can be stressful and frustrating and scary on a good day.
I try really hard to circumvent the things that make negotiation scary — both for me and the other party. My approach is (sorry, the headline was a spoiler) to make each negotiation a conversation, and to approach it with transparency and honesty.
I often use an approach just like my opening paragraph for this piece: I plainly explain the exact situation from my perspective. “I want to get paid $10k. My instinct is to come in at $12k, you’ll counter at $8k, and we’ll land at $10k. I can get this deal done at $10k. If this is worth $10k to you, let’s do this.”
That’s not going to work 100% of the time, of course, but it’s my open aim to eliminate the mystery from negotiation. Everyone involved is wondering what the other person is really willing to do. I’m trying to pre-negotiate and explain my thinking. If I can build a rapport and prove I’m an honest negotiator and build up a reputation as that kind of person, this works far more often than it doesn’t.
Negotiate by talking normally — by having a conversation. Don’t worry about gamesmanship. Just talk.
I’ve joked that a successful negotiation is like a successful compromise: everyone feels comparably annoyed about the outcome. The truth, though, is that the best negotiations are the ones where everyone feels like they won — because they feel fair.