How To Get Paid What You’re Worth & Other Negotiation Tips
For most us, the thought of bargaining over money is an awkward and painful affair, something we try to get over with as quickly as possible like a root canal or watching a slideshow of our in-laws’ vacation.
But if we skip a few minutes of haggling, we can leave some serious cash on the table and, more importantly, short-change our true value as creatives. One study found that negotiating a raise of $5,000 for your first salary can result in more than $600,000 in additional lifetime earnings. A Cautionary Tale
In 1912, Teddy Roosevelt’s campaign printed three million pamphlets with his picture featured prominently. It was only after the pamphlets were printed that his staff noticed a small line of text that read “Moffett Studios – Chicago” under the picture. The campaign did not own the rights to the photo and licensing a photo for reprinting usually cost $1 per reprint.
A campaign manager was tasked with calling the photo studio and negotiating a fair rate for the use of the image. Shrewdly, the campaign manager contacted the studio and simply asked how much it would cost use the picture, never revealing that the campaign had already printed millions of fliers using the photo. Without further inquiry, the studio quoted a price of $250, which the campaign promptly accepted.
Had Moffett Studios been savvy negotiators they would have taken the time to gather all of the information before offering $250 and proposed a much higher rate instead.
How To Become A Better Negotiator
While the Moffetts of the world might appear a little naive, oversights of this sort are extremely common: we often fail to consider the full impact of a deal in the long run.
To make sure you get a better deal, here are a few tips on mastering the dark art of negotiation:
1. Separate the person from their position. This is one of the primary points of the popular negotiation book Getting to Yes. When we argue over positions, our egos are attached to what we are proposing. Instead, focus on the other party’s underlying interests. Find where interests overlap and work to develop solutions with the other party as a partner not as a combatant. An example from the book:
Consider the story of two men quarreling in a library. One wants the window open and the other wants it closed. They bicker back and forth about how much to leave it open: a crack, halfway, three quarters of the way. No solution satisfies them both.
Enter the librarian. She asks one why he wants the window open: “To get some fresh air.” She asks the other why he wants it closed: “To avoid the draft.” After thinking a minute, she opens wide a window in the next room, bringing in fresh air without a draft.
The librarian could not have invented the solution she did if she had focused only on the two men’s stated positions of wanting the window open or closed. Instead she looked to their underlying interests of fresh air and no draft. This difference between positions and interests is crucial.
2. Money isn’t the only factor in a negotiation. If we make it all about money, the negotiation only has one measure of success. In a 2001 Harvard Business Review article, Harvard professor James Sebenius advises us to recognize the other factors that may be less black-or-white.
For example, when negotiating a project with a client, price isn’t the only thing on the table. You can discuss deadlines, delivery methods, communication preferences and a host of other options. Give a little on deadlines, but propose a higher rate. The more variables you can negotiate, the higher the likelihood that both parties will feel like winners.
3. Practice your negotiating skills with a friend. Think back to the first time you drove a car. It was likely pulse-pounding affair that caused quite a bit of stress and maybe even embarrassment. But, as an adult, you can now hop in your car and drive to the store with barely any stress. So what happened? Practice made the difficult into the routine, and negotiation is no different.
The more variables you can negotiate, the higher the likelihood that both parties will feel like winners.
Do you know that friend you have that can poke holes in any idea? Enlist him or her to enact all of the possible scenarios for a negotiation to help you prepare proper responses. If you’ve already made your mistakes in the (forgiving) company of friends, you can remain calm, cool and collected when it’s game time. Personal finance author Ramit Sethi drops a ton of knowledge about negotiation on his site I Will Teach You To Be Rich, including this tip:
“The people around you matter. Practice matters,” writes Sethi. “If we just become marginally better negotiators than we currently are, we can reap disproportionate rewards.”
4. Never name the first number. It’s accepted wisdom that naming the first number is bad negotiation form, but rarely do we see an exact script and reasoning for a stingy negotiation partner. Short story: the other party often has much more information than you do, so have phrases like “You are in a much better position to know how much I’m worth to you than I am” ready for use.
The other party often has much more information than you do.
5. The First Number Named Has A Profound Impact of the Rest of the Conversation. The blog “You Are Not So Smart” tackles the psychology behind the phenomenon of naming the first number, or “anchoring.” When we have to guess a number or price for which we have no previous information, we crave a “foundation” to base our guess on. Think of your perception of value when you discover a pair of shoes were “originally” $200 but are now “on sale” for $50.
It’s one of the many reasons it pays to make the other party name the first number whenever possible: if you were to name a less favorable number it could “anchor” the conversation to your disadvantage.