Case Study: Negotiating a $16,000 raise doing what others will not

Ramit Sethi Ramit Sethi · May 12th, 2011

An in-depth look at the salary negotiation techniques Will used to get a $16,000 pay raise. How to use the techniques that 99% of people will NOT do.

Today, an in-depth look at the techniques that one of my readers, Will H., used to negotiate a $16,000 raise.

Before you read, be sure to acknowledge any psychological barriers you may have about asking for a raise.

For example, many people will say, “A raise? In this economy??” That is a barrier: If you are indispensable, and your boss knows it, you have a good shot at negotiating a salary increase in any economy. However, if you think the economy solely dictates your compensation, then you are, by definition, not a top performer.

Using the right techniques helps, too…like doing the homework and practicing a negotiation over and over — which 99% of people will not do.

Watch how Will did it.

“I’m not being paid what I’m worth”

Will is an interaction designer for a non-profit research institute in the Bay area. He loves his work.

He was also a self-described “personal finance nerd.” Will stumbled onto I Will Teach You To Be Rich when another blog linked to my post on weddings. We all know that weddings are expensive, but he was impressed by the analysis of why it might actually make sense. Looking around the rest of the blog, he found another idea that really struck a chord with him:

When it comes to increasing your net worth, you don’t just have to save money — you can also focus on making more money. Most people who read personal finance advice get so caught up in saving a few dollars every week that they miss out on the far more effective (and less punishing) method of bringing in more money.

One of the most effective ways to do this is to negotiate your salary.

Bonus: I wrote a huge free guide to salary negotiation and getting paid what you’re worth that goes into even more detail on the strategies described here.

Since Will had joined this firm right out of college, he’d quickly gone from doing junior-level work to giving presentations to important clients and taking on more and more responsibility managing his projects. Now he wondered if his salary reflected that growth in value.

He read some of my posts on negotiation and wondered, “What do I have to lose?”

“I’m not going to wait until my next performance review”

Working up the courage to pursue his raise, Will was inspired by the phrase, “Success in life is directly proportional to the number of awkward conversations you’re willing to have.”

He wanted to be very successful, so he was willing to skip the easy route and confront uncomfortable questions: Will this damage my relationship with my boss? How much am I really worth? Will all this extra work pay off?

Most people simply worry about these questions, letting low-level concern hold them back from taking action. Will wrote down the questions and potential answers, going from worry to constructive next steps.

He wasn’t willing to wait until his next performance review. He quickly decided that it wouldn’t be enough to simply browse a salary research website and come up with an average number based on his job title and geographic area. He wanted real leverage, to give himself as much power as possible in negotiating a significant raise.

He needed to find out how much he was really worth – not just his job title, but his whole package: his specific skills, personality, experience, conversational ability, and everything else that set him apart from some nameless aggregate on the internet.

How to determine how much salary you’re worth

In addition to the usual and, Will wanted to get even more specific about how much he was worth.

He decided that the only way to learn his true market value was to the market and find out. He decided to respond to job openings in the area and to go into the interviews with an open mind. After all, even though he was perfectly happy with his current job, he would naturally be willing to jump ship if he found a much better fit somewhere else. And his research would help him determine his true market value, which he could bring back to the company.

At first, he was nervous about looking for another job while still employed. But he was able to convince himself that he had been providing so much value to his employer that he deserved to get some of that back. And, the best way to do that would be to get some experience interviewing, quantify his value, and to come back with the ability to say, “Rival company X thinks I’m worth Y — what can you do?”

Not only would this get him some valuable experience holding his own in nerve-wracking negotiations (which he’d be soon able to use with his manager), but this kind of real-world proof would be much more compelling than following the path of least resistance and simply presenting a number from a salary website.

Notice the difference between top candidates and mediocre ones.

  • Mediocre candidates let others drive their lives — they let their bosses set the agenda, they let their bosses set the timetable for salary discussions, and they let their bosses decide their salary.
  • Top performers respect their bosses experience and skill, but they are different in two ways: First, they provide extraordinary results for their companies (rather than being focused on process, like how many hours they worked. Who cares about that?) Second, they employ a mindset that THEY will drive their own careers, whether that means asking for the best work, asking to run projects, or even asking to discuss a salary increase. They run it — not somebody else.

Paradoxically, great bosses love top performers who run things.

Using The Briefcase Technique in Salary Negotiation

Will began interviewing with other firms with the goal to secure several high-salary offers, then take them back to his own boss.

But what kind of unique value could he provide to the interviewers? He couldn’t just sit there and answer their questions about his experience. Instead, he had to offer something so different from the other candidates that he would be sure to get the offer he was looking for.

His first interview was for a software engineering position. Sure, he could write code, but his real strength was interaction design. He would get through the preliminary phone interviews answering whatever questions they had about engineering; but, when it came time for the in-person interview, he was going to take control of the conversation.

His plan was to define the sort of work that he would be doing and convey to them that he was uniquely qualified to provide an amazing value that would solve specific problems they had.

Will came into the interview prepared. Spending about five hours total, he had evaluated the company’s website and made a list of 30 things they could do right now to improve it, even if they didn’t end up hiring him.

Having learned the Briefcase Technique from Earn1K, Will understood the value of presentation. He kept the “briefcase” in his back pocket during the initial interviews, waiting for just the right opportunity.

Finally, he found himself in an interview with the VP of Technology talking about engineering. Now that he’d made his way through the middle management guys, Will felt that this was finally someone with a high-level enough view that they could appreciate the value of good design. When the time was right, Will explained that while he could do engineering, he could actually provide them with far more value by improving the user experience on their website.

That’s when he pulled out the big white binder he’d prepared.

The interviewer was so impressed that he called a product manager into the meeting. It turned out that the company hadn’t even been thinking much about user experience, and Will had provided them with a huge amount of totally unexpected value.

Total cost? 5 hours of time and $5 for a few binders.

“Won’t They Just Steal My Ideas?”

As he’d prepared for the interview, Will had met a surprising amount of resistance to his idea. His friends worried that the company might just steal all his great ideas and hire somebody else.

But Will didn’t see it that way at all. He’d learned from this blog to just go in there and test assumptions. It doesn’t make sense to guess what someone will do when you have the chance to actually test it.

He understood that simply stealing the ideas didn’t make sense from a value prospect perspective. Presumably there was a lot more where that came from, and these 30 ideas were just a taste. Sure, the company could steal them, but they’d be a lot better off hiring the person who could execute them.

If you build real value for someone, they will want to forge a relationship with you.

Worst case scenario? If they simply stole his ideas, it was their loss and he could always try again at the next place.

Adapting with Changing Negotiation Conditions

Will got the job offer, but the salary was lower than he’d hoped for. (It was a startup, so they’d put a big chunk of the compensation into the form of equity.) He’d been hoping for a number that could inspire shock and awe at his current job, but he soon realized that is wasn’t so bad – after all, his current employer didn’t necessarily care about the exact amount of a rival offer — but simply the fact that a rival was trying to poach their employee at all.

(Notice how a top performer will roll with the punches, adapting as conditions change.)

With his new leverage in hand, Will now felt comfortable to negotiate a raise. At this point, he made one of his most important decisions: He didn’t speak to his direct manager. Instead, he targeted the influencer who would feel the most pain if he left: the project’s technical lead.

Meeting with her, Will framed his concerns not in terms of money, but from the standpoint that he’d been providing a lot of added value over the past year and wasn’t sure that it had been properly reflected back to him. The company just wasn’t properly structured to take full advantage of his skills.

When she asked if he had already made his decision to leave, he said no — he would rather work it out and remain there. He let her know that the rival company was more agile and that — over there — he would be able to give his input at an earlier stage and focus more on the user experience. “What can you do to match that and keep me here?”

This shifted the burden onto them, and it made the project lead consider what their company might be doing wrong. How might this rival company be doing better?

The project lead came away feeling that she was the person with the power to keep Will at their company. People respond well to pleasure, but even more so to pain, and she knew that both the company and she herself would feel it if he left. She took it upon herself to argue his case to the lab director.

One more thing: She was the one to bring up salary – “I don’t know what you’re making now, but I wouldn’t be surprised if it wasn’t enough… I think a title change might also be appropriate.”

The $16,000 Raise

The next day, she had scheduled Will a meeting with the director. While he wasn’t especially familiar with Will’s work, the project lead had primed the pump and explained that this guy is really valuable to us – we need to do whatever we can to keep him.

Once again, it was the director — not Will — who brought up the issue of money, “Salary – what are you thinking?”

Using the leverage of the rival company’s offer and his skilled in negotiation practice, Will first established his value (going over how much he had done and could do for the company), then explained that his current responsibilities felt more like those of a senior user experience designer. He threw out a number that he thought was really high, and the director responded, “I’ll see what I can do.”

At that company, raises usually only happened at the end of the year, but Will got his the next day – an increase of $16,000 (along with a promise from the lab director to focus more on user experience).

Top Performers Demand Their Worth

Nowadays, Will’s on the fast track. Sure it had been a little awkward to reveal that he had been interviewing at other companies, but the decision makers also respected him. Going in there and demonstrating his value got Will noticed by the senior management, and his project lead has now taken a vested interest in him and has been helping his career along.

The best part is that, even if he decides to eventually move to another company for real, the increased salary will stay with him. Once you start making more, you keep making more year after year.

And it’s all thanks to a couple of white binders.

How can you apply these lessons to negotiate a raise?

  • Understand that top performers (1) drive extraordinary results and (2) employ a mindset of driving their own career — instead of letting a boss determine their future for them
  • 85% of a negotiation happens before you ever set foot in the room, including deciding to negotiate, doing extensive research — including competitive intelligence, if necessary — and practicing the negotiation
  • A large salary increase is one of the quickest ways to earn significant amounts of money. In fact, a large salary increase in your 20s or 30s can drive over $100,000 of income over your lifetime, since a newly negotiated salary will now be a baseline benchmark to work up from
  • Whiny complainers about “this economy” are likely (1) not top performers and (2) looking for an excuse to do nothing

NEXT STEP: To learn how to use the Briefcase Technique to earn more money, including a step-by-step video and 3 case studies with real results, click here:

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  1. Stickypurplecat

    The briefcase technique is my favorite and by far the most valuable advice of yours that I’ve ever put to use. Truly it’s priceless, because it’s something you can use over and over again for crazy amounts of money.

    With it I earned a prestigious promotion at work, a job for which I competed against 40 coworkers that were way more qualified and much more experienced than I was. At a glance they seemed superior in every way, but I had Ramit Sethi in my back pocket!

    After living and breathing everything about the company for a whopping 2 days, I was totally prepared. My resume was tailored to reflect that every single skill I had existed to make this company successful (this is supposed to be obvious, but you’d be amazed at how few people bother to edit their resume). The application itself- full of generic short essay questions- was instead framed around how I could make the company successful by saving customers from themselves. When it came time for the interview I got to present performance numbers which demonstrated that by promoting me, my new boss would get to take credit for spying awesome new talent who was simultaneously an angel with customers and great for the bottom line.

    Craigslist Penis Effect! The interviewer was stunned that I was so well-prepared. Everyone else had been relying on their credentials or their socializing skills to land them the job. That even ONE person would bother to prepare an explanation for WHY they should get a job was baffling. And after all that great reasoning, who could afford /not/ to promote me? Obviously if they didn’t, I was going to find superior work- and pay- elsewhere. It was a no-brainer, at least to the interviewer.

    Bear in mind that this was at a non-profit, during a time when business was slow and profits were down. Management was so impressed with what I had presented that they went out of their way to give me a bonus in addition to the raise that accompanied the promotion. They were falling over themselves to give me more money!

    Furthermore, getting the interviewer to start sputtering numbers- instead of letting me paint myself into a corner with a mediocre number- opened the door to discuss additional benefits that they could pile on the cash they were dumping at my feet. Best of all, it made sure that when it came time to dive into work at my new job, the right people were watching me closely, paving the way for more benefits down the road when I proved to them quantitatively that they made the right choice, again outperforming my coworkers, this time at my new station.

    When I started the application for the promotion I got warnings from everyone I knew, coworkers, family and friends alike. They said I was too young, under-educated, inexperienced, and hadn’t done enough schmoozing with management to get the job. Seniority trumps great work, right? Well so much for that!

    “Thank you” will never suffice. I try to make up for it by telling anyone who will listen to just give it a shot- you’d be hard put to it to find anything you might lose in the process, save a bit of your time, and the possible rewards are more than worth your trouble.

  2. I like the way Will did this, first covering his bases by getting another offer which gave him the confidence to be able to go into the meeting with a “Win-win or no deal mentality” if everyone wasn’t pleased with the negotiation he could take the rival offer.

    When he got into the meeting he didn’t start asking and demanding he started stating his value and made them realize he was under paid which then made the salary negotiation easy.

  3. […] Case Study: Negotiating a $16,000 raise doing what others will not via I Will Teach You to be Rich […]

  4. Lindsay

    Ah, thanks for the article. I hadn’t thought about it lately but my job description has changed over the last 2 years. While my salary is still a great salary for what I used to do, I did a little research and I am going to ask for a very large raise as well. Thanks.

    • Lindsay


    • Lindsay

      Also: I did a soft-sell and said the following in summary:
      1. I’m paid very well for [title of former role]
      2. My duties have changed and I’ve been taking on more responsibility for the past [duration of time]
      3. Concrete examples such as the number of people I provide billable work to on a regular basis, and tasks that I now perform on my own, which used to be done under supervision or as an assistant.
      4. Therefore, I would like you to review my salary in light of my changing role.

      I didn’t name any numbers. I felt that it might piss my employer off if I said that I looked at other jobs and other salaries on-line, and I could always reply with the more “hardball” negotiation tactics if i wasn’t satisfied with the raise offered. The subject of the post may have had success using the “hardball” tactics, but I don’t think everyone can get away with that. I think the decision on how to sell it should be based on some sound political knowledge. If you can, I recommend consulting with a mentor or trusted senior staff or partner to get a feel for the waters first or get advice on your approach. You don’t have to tell them you want to ask for a raise even, you can ask them for an anecdote of the best or worst pitch for a raise that they ever heard! 😉

  5. For me, the key takeaway here is that the discussion of why you should be paid more, and have a better title, should be focused on value you’re poised to add in the future. It’s good to talk about past accomplishments, and how they exceed your current job title, but it’s critical to offer an additional bonus value, something you’d be prepared to undertake if moved to a higher-level position. This way there’s both a stick (implied threat to take your talents elsewhere if not rewarded appropriately) and a carrot (something else your company can get, beyond the extra work you’re already doing at your lower salary/title – in other words, for free). There’s both fear of pain AND the tempation of additional awesomeness that your manager didn’t even know was an option.

  6. I’m about partway through Ramit’s book and am really enjoying it. To me, one of the things that sets him apart from everyone else is his ability to also teach how to make money. If you’re just stumbling across his blog, pay attention. You’ll learn not only how to save some money but as is illustrated in this article, you’ll learn how to earn a lot more. Keep up the good work Ramit.

  7. Sarah

    This was extremely informative, but I miss hearing your voice in the article. Where’s the name calling? The delicate sarcasm and strategically placed profanity?

    Way to go, Will! Congrats; your raise is certainly well-deserved.

  8. @Stickypurplecat Awesome comment, thanks! Got two blog posts in one. 😉

    I also work in a non-profit so it’s reassuring to see that these strategies aren’t exclusively for the for-profit world.

  9. This was almost my exact situation. I wrote to Ramit a month ago to thank him for writing the blog posts that inspired me to action. By using almost the exact method detailed in the post above I parlayed a outside job offer into a $20k raise at my current company.

    This only works if you are a top performer. I wasn’t two years ago, but reading IWTYTBR inspired me to get my ass in gear and kick butt. Now I am enjoying the results. Get comfortable with the uncomfortable!

  10. Leif David

    @Sara: I think you’re right. I don’t think Ramit wrote this one.

    Great article either way. I love these techniques. Too bad I’m self employed and I can’t just go into a meeting and demand more money. On the plus side, I don’t have to listen to a boss (I think that’s worth $16,000k/year)

  11. Ramit,

    Sorry to post an off-topic!
    I’ve just read your tip #25 and I would like very much, if possible, to read about what Jeff, the book researcher, does and did for you. What called my attention was your description of his “ability to dig up anything, any time, and quickly”.


  12. Good job on getting the raise! Sometimes you have to be willing to discuss the corporate taboo…more money! I’ve found my largest raises have come in the form of taking a position at a new company. Though I certainly wouldn’t advocate job hopping, especially if you are happy, the days of being at the same company until retirement are long gone. You have to interview at other places, and then use that leverage in negotiating with your current company…the best tactic is having another offer waiting.

  13. This was a compelling story. It’s nice to see that this type of technique is appreciated. I think it’s important to find out your base worth by actually doing some market research, which is exactly what Will did. and I’m sure that since he was not under pressure to take the job, he probably was very calm and confident in the interview as well which makes a big difference.

  14. This is such a great story that I am going to send it along to my sons – senior engineer and web developer!

    Ladies take heed. One of the top reasons we are still underpaid for the same jobs as the guys is our lack of negotiation skills and refusal to take risks!

  15. I’ve been a military engineer for a while now, and its stories like this that make me resent the government/military pay structure.

    It’s not based on performance, but more your time in service. Even career field hardly matters.

    Compare this to the real world, where you get stories like this, and it makes me sad.

    Oh well- guess that’s the price of having a “secure” government job.

  16. […] Case Study: Negotiating a $16,000 raise doing what others will not from I Will Teach you to Be Rich. […]

  17. It is somewhere between astonishing appalling that this blog post has less than 20 comments.

    Ramit: great copy. Really great.

  18. Truly inspiring! This is a wake-up call, don’t wait for the right moment. Know your worth and stand-up.

  19. […] You could also use a higher offer from a new company to convince your current employer to give you a raise, explains personal finance and behavior expert Ramit Sethi. […]

  20. […] Salary negotiation: how to negotiate a $16000 raise, … – An in-depth look at the salary negotiation techniques Will … you want to ask for a raise … above I parlayed a outside job offer into a $20k raise at my …… […]

  21. Nicole Jag

    I could use some advice on my situation which differs a bit.

    My boss who was a senior manager quit two months back and I stepped up as the de facto manager without being asked. However, even before he left, I was the go-to person for people within and outside of our team. In the few instances where people went to him, he deferred to me.

    I now have a new manager whom I really like but have reached a point in my role where I need a change. Something bigger and more challenging that I don’t think can be satisfied in my current role.

    I have discussed this with my boss and my director and their feedback while it has not been negative, was rather flat. But, it shook things up enough that the VP Finance has schedule a meeting with me.

    There are two things that I would like to accomplish from this situation which is consideration for a more challenging role and an increase in salary. I received a stellar performance review and am told that I am perceived as a top performer. I have lots of ideas of things we can do to improve our financial reporting and decision making, so I am walking in with ideas.

    How do I bring up the salary thing without any job offers to use as leverage?

  22. This is hilarious. Everyone is so amazed with this story that it seems not a single person asked: What was the percentage of the salary increase? A $16K increased on a $40K salary is significant. But for a $200K salary is not such a big deal. The article does have some value, but given how things are described in an exaggerated manner, it really detracts from the main point.