Negotiating? Make the First Offer.
I am writing this because I’ve found myself telling it verbally a couple of times by now so maybe it’s worth putting into text.
It may just exist in my little bubble, but it seems that there is some conventional wisdom that says that in negotiations, you should try to get the other party make the first offer.
It’s not that I have researched this a whole lot. I listened to a podcast once with some guy who had negotiated deals for lots of big companies and was considered a heavy weight in the field. I remember being a bit annoyed with this because when you represent IBM in some deal, you almost certainly have what everyone knows is the real, deciding factor: leverage. At that point, I don’t really care about your theories on body language and whatever. I am sure he made some good points but none that left a lasting impression on me.
Being the one who makes the first offer, however, is something I have practiced for a long time and I feel it serves me well.
I can see two risks with it. One, you end up like Michael Jr. in Road to Perdition (sadly I couldn’t find this clip anywhere):
Michael Sullivan, Jr.:
> So when do I get my share of the money?
Michael Sullivan:
> Well… how much do you want?
Michael Sullivan, Jr.:
> Two hundred dollars.
Michael Sullivan:
> Okay. Deal.
…
Michael Sullivan, Jr.:
> Could I have had more?
Michael Sullivan:
> You’ll never know.
The second risk is that you suggest something so outrageous that you get an Al Swearengen-style response:
Now, regarding situation #1, how likely do you think the situation is where your new employer thinks to themself “Great! We were going to offer twice the salary — but now we can get better drinks at the next company party instead”? I imagine it’s probably quite unlikely. If you are completely unaware of the value of the product or service you are buying or selling, negotiation is not the time where you are going to discover it.
As for #2, well even if this is indeed how they respond, do you think you would then have been interested at the price point (or whatever is being negotiated) that they had in mind? It’s not a pleasant situation for sure, but it’s probably good to get it out of the way and you can all be on your way.
If you want the other party to offer first because you think of a negotiation as a sort of poker game and you think that them revealing their hand gives you an advantage, I just have to say that I don’t see what that would be. State what you would like and work from there. If the other party wants a different number, it’s now on them to convince and compel you to move and not the other way around.
