Have you ever watched a friend or family member try to haggle on a car or negotiate prices at the store — and completely fail?
It typically goes something like this:
Timid negotiator: “Excuse me, sir . . . do you think you might possibly maybe somehow lower the price on this item for me? I was thinking — ”
Salesperson: “Nope. Sorry, it’s a set price.”
Timid negotiator: “Okay.” (head down, internally asking themselves, “Why did I even bother?”)
And it’s not just when haggling for a car or something at the store — people timidly approach salary negotiations with the exact same weak attitude…which is RIDICULOUS!
I LOVE salary negotiations. With just a five-minute conversation, you can both earn a Big Win and make thousands more a year — which really adds up over your lifetime.
Check out this chart that shows how much a $5,000 increase in salary can add up over the years:
If there’s an earning potential of MILLIONS, why would you want to throw your chances away with a weak approach?
Unfortunately, there are a lot of misconceptions out there when it comes to negotiations.
Which is why I’d like to address them first before diving into HOW to negotiate your salary. After that, I’ll detail the exact steps to nail a negotiation.
How to negotiate salary
Salary negotiation myths
5 steps to NAIL your salary negotiations
Find the exact salary you want
Identify the issues the company is facing — and how you can solve them
Prepare the Briefcase Technique…again
Have a fallback position ready
Practice negotiating relentlessly
Perks to ask for beyond salary
A to-do list for this week
Negotiation myth #1: Salary negotiations need to be adversarial
Here are some common phrases of people who don’t want to negotiate their salary:
- “I don’t want to be mean.”
- “He’s just a small-business owner — I’ll just pay him what he wants.”
- “I hate arguing with people.”
The first thing you need to realize is that you shouldn’t be mean while you negotiate — quite the opposite. You want to explore the situation with care and nuance. After all, both the salesman and you want the exact same thing: for you to buy the product.
With that in mind, when confronted with a denial to an offer on an item, rather than saying, “OMG THESE PRICES ARE AWFUL. YOU MUST BE CRAZY…plz give me a good deal?” you’ll want to say something like, “We’re close, but we just need to find a good fit here.”
Negotiation myth #2: I need to read (and read, and read) a lot about negotiating before I do anything
This is one of the biggest pitfalls someone can get into when they’re trying anything new — studying instead of doing.
Don’t get me wrong, you do need to get educated. BUT you’ll learn 100x more from practicing 5 negotiations than from reading another blog post or watching another YouTube video about negotiating — and yes that includes THIS article.
Negotiation myth #3: You can negotiate everything
Unfortunately, sometimes you’re just going to have to eat the costs for something you want because the simple truth is you can’t negotiate everything.
After all, you’re not entitled to a deal on everything — but you CAN pick your battles, because the right ones can save/generate thousands of dollars for you.
That said, there’s still a lot you CAN negotiate. Anyone with Asian parents can tell you that.
In fact, here’s a list of just a FEW of the things you probably didn’t know you could negotiate — I know because I’ve both done it before AND have taught thousands of people to do it themselves.
- Car insurance
- Cell phone plan
- Gym membership
- Credit card
Check out my video on negotiating your bills for more on this topic.
Negotiation myth #4: Some people are born negotiators
Let’s make one thing clear: negotiating is a skill. And like any other skill it can be learned, honed, and mastered.
Luckily, I learned from some of the best negotiation masters of all: my parents.
For example, my mom would show me how to negotiate at department stores when I was a little kid. Then, visiting India, I saw the game taken to a whole new level when they dealt with salespeople in stores and markets.
The point is, the people around you matter and practice matters. Sure, none of us may ever be the world’s top negotiator . . . but we don’t have to. If we just become marginally better than we currently are, we can reap disproportionate rewards.
Negotiation myth #5: I don’t know as much as the other person to “win” at negotiations
This kind of goes back to negotiation myth #1: stop looking at negotiating as a win/lose situation.
People seem to think that someone has to get screwed over in a negotiation to get what you want — but that’s completely backwards.
Of course, you can’t just make a demand and expect the other person to give it to you — you have to make a case for it. Credit card, insurance, and cell phone companies are willing to offer discounts to keep high-value customers. And an employer is equally happy to give a raise to keep an employee who does fantastic work and provides value every day.
You’ll hear some people say “no” but I promise you’ll be surprised by how many people say “yes!”
As long as you prepare and are ready to make your case, salary negotiation becomes a lot less scary.
Which brings us to . . .
5 steps to NAIL your salary negotiations
These 5 principles will help you prepare for your negotiations, allowing you to talk to the hiring manager confidently and be ready to earn more money.
Remember, though, all the prep in the world won’t amount to ANYTHING if you don’t actually negotiate your salary.
Step 1: Find the exact salary you want
If you walk into a salary negotiation without a hard number, you’re going to be at the mercy of an experienced hiring manager who will simply control the conversation. That’s what they do for a living.
When you know what you want, though, not only can you communicate crisply to the other person, you can also demonstrate why you deserve that much.
That’s why you can’t just go in and say, “I want to make $100,000 a year!!!”
Instead, you have to show them your value — I’ll go into this more later in the article with the Briefcase Technique.
If you’re unsure about how much to ask for, though, there’s only three crucial pieces of advice I can give you:
- Ask for a million dollars…just kidding! RESEARCH.
Before you even speak to the hiring manager to negotiate salary, you should have done as much research as you could about what the average industry pay is for your job. Only then can you properly apply the tactics in this article to effectively negotiate salary.
To that end, there are a few great resources for you to find a good place to start:
- Salary.com: This is a great website for both employers and job seekers to compare compensation rates for specific jobs across a huge variety of companies.
- Glassdoor.com: Though this site primarily acts as a “Yelp for jobs,” it also includes an incredibly handy salary tool that allows you to look at the national average salary for your job as well as the average rate of compensation in your city.
- PayScale.com: This website sends you a personalized salary report based on a questionnaire you fill out regarding your career history. It’s especially great for recent college grads.
- Ask a friend: Do you know anyone who has worked in this field before? Maybe a friend of yours has been in the industry for a few years. Ask them how much they were paid — as well as advice on how much you should ask as well.
- Google it: A search as simple as “average digital marketer salary” will give you a wealth of information that you can use.
Only with sound research can you ever expect to negotiate well.
Step 2: Identify the issues the company is facing — and how you can solve them
I once had a guy I interviewed for a job. He negotiated with me — but he kept offering things I didn’t care about.
He said things like, “I can also do [X skill that doesn’t matter] for you, and [Y work that’s already getting done by others], and [Z value that I’m already doing better myself].”
If he had taken the time to find out what I REALLY wanted — which was reliability — he would have been able to offer specific examples, like a weekly digest of everything that he accomplished and what he was working on the next week.
If he did THAT I would have been more than happy to pay him thousands more for the peace of mind.
But because he didn’t take the time to find out what I wanted as the employer, I didn’t hire him.
Which is why it’s so important to identify the main issues the employer is currently facing so you can later find out how to solve them.
During the interview, ask whomever you’re speaking to a lot of pointed questions regarding their pain points. I LOVE it when I get asked questions like:
- What’s something that you would like to improve within the company — and how can I help?
- What traits do you value the most in a new hire?
- How can I help with your most important goal this quarter?
Remember: you can add a lot more weight to your salary negotiation if you crush your job interview.
Once you recognize all of the areas where you can add value to the company, you’re going to use one of my most favorite techniques…
Step 3: Prepare the Briefcase Technique…again
This is one of my absolute favorite techniques to utilize in interviews, salary negotiations, client proposals — whatever! And the beauty of it is that you’ve already done 90% of the work before you started speaking to the hiring manager.
Ideally, you’ve used the technique already during your initial job interview in order to wow your employers.
But now you’re going to use it AGAIN utilizing the information you learned in step 2.
Here’s how it works:
First, you’re going to leverage the information from step 2, and create a 1-5 page proposal document showcasing the specific areas in the company wherein you can add value.
Then, you’re going to bring the proposal with you when you negotiate your salary. When the question of compensation inevitably arises, you’re going to pull out this document and outline exactly how you’re going to solve the challenges of the company.
Hiring manager: So what’s your price range?
You: Actually, before we discuss compensation, I’d love to show you something I put together.
And then you literally pull out your proposal document detailing the pain points of the company and EXACTLY how you can help them. IWT bonus points if you actually use a briefcase.
By identifying the pain points the company is experiencing, you can show the hiring manager where specifically you’re going to add value — making you a very valuable hire.
Approach the proposal as the most compelling menu they’ve ever received — complete with issues that they know about and how YOU are the person to solve those problems.
I go into even more detail on the Briefcase Technique in this 2-minute video. Check it out below.
Step 4: Prepare a fallback position
There’s a classic psychological technique I’d like to introduce to you called the “Door in the Face” technique.
Imagine there’s a nonprofit worker soliciting donations to a homeowner.
Nonprofit worker: “Hi, would you like to donate $50 to the Save the Whale Foundation?”
Homeowner: “Hell no.”
Nonprofit worker: “Okay, how about $5?”
Homeowner: “Hmm okay, sure.”
See what the nonprofit worker did? He knew he wasn’t ever going to get $50 — but he also knew that if he gave a drastically reduced amount after his initial ask, the homeowner would be much more susceptible to donating.
You can do this by asking for a salary higher than what you would settle for. At worst, you’ll meet in the middle with the hiring manager. At best, you get a higher salary.
Remember: if you’re negotiating, odds are you’ll fail — but that’s totally fine. You should EXPECT failure. Embrace it. And plan accordingly by turning “failure expectation” into domination.
This 6-minute video shows you strategies — including word-for-word scripts — that’ll help you command their respect and make them excited to pay you what you’re worth.
Step 5: Practice negotiating relentlessly
How do musicians get to Carnegie Hall? The same way you earn thousands in a salary increase. Practice.
Most people will lose tens of thousands of dollars over their lives due to their failure to practice negotiations. Actually, most people won’t negotiate at all. Even when people DO negotiate, they won’t practice.
They’ll say things like:
- “It feels weird.”
- “Who would I practice with?”
- “What do I say?”
IT DOESN’T MATTER!!!! That’s why you’re practicing.
As I always say: Don’t shoot your first basket in the NBA. After all, if you don’t practice, you’ll be going into negotiations cold with a hiring manager whose job it is to negotiate all day.
So find a friend or family member to run through tactics with. You can even go to your local farmer’s market and haggle for small items or try negotiating on Craigslist. Every little bit helps.
Here are a few question scripts you should prepare responses for — and have your practice partner run through with you:
“What is your salary expectation?”
Answer this using the information you gathered from step 1. By the time you walk into negotiations, you should already have a firm number or range in mind.
“There’s no room in our budget. We can’t possibly give you more money.”
LIE!!! If they tell you something like this, make sure you DON’T FALL INTO THIS TRAP. This is a scare tactic companies often use to make us settle for less than we deserve . . . and pocket the money that should’ve been ours.
“What are you making now?”
This question is asked by employers to see if you’re making the industry average. After all, if you’re NOT making the average, they’re going to wonder why? And this greatly affects what they’re going to offer you.
That’s why it’s so imperative you showcase how you’re going to add value to the company with the Briefcase Technique before the question of salary comes up — so that you’ll look incredible once it does.
Follow those steps and you’ll be set up for success when negotiating your salary.
Perks to ask for beyond salary
Salary is just the first step of what you can negotiate in the process. In fact, there are a big number of benefits you can negotiate if you’re a top performer.
Telecommuting. That’s right — you can actually negotiate with your boss to convince them to let you work from home.
- Stock options. Some companies offer options for their employees to incentivize their work. Though there are often times a fixed number for all employees to receive, you can actually negotiate for more stock options with the understanding that you are a top candidate.
- Vacation days. Paid time off and vacation time are benefits most every company offers — but not many people realize that you can actually negotiate your vacation days too.
For each of these, it helps to simply remember the ARMS technique. An example using telecommuting:
- Agree. This is a nice psychological trick by giving your employer something they agree with first — so they’re more apt to go along with the rest of your pitch.
- Reframe. Instead of showing your employer how much telecommuting will benefit you, you’re going to show them how great it would be for the company to embrace it.
- Make your case. Here you make your pitch: Sell them on the idea of you working from home — but give them an out by saying you’ll work in an office if it affects your work output.
- Shut up. When you’re done, you’re done. Yield the floor and let the employer speak.
Here’s a great script you can use to negotiate remote work.
You: This is great news. I’m thrilled to be invited to join your company and look forward to adding great value to the organization.
That being said, I’m afraid the commute time will affect both my work flow and focus. It would make a world of difference if I could work from home a day or two each week.
Hiring manager: I’m sorry. We don’t do that here.
You: [Agree] I understand that your company hasn’t done it in the past — but this could be a great opportunity. We have the technology to make everything possible.[Reframe] If it works out, we can find candidates in other states for XYZ roles. [Make your case] And given my credentials and background, testing it out with me on a small scale is low risk. If it doesn’t work out, we can always go back to the old way. [Shut up] So what do you think?
And if they agree, good job on the Big Win! If not, that’s fine too. You can always go back during your review period and pitch again after you’ve really shown your value to the company.
In this video, I interviewed my friend Justin Wilson, a former management consultant and absolute MASTER at negotiations. We ran through a mock negotiation wherein he expertly negotiated for benefits outside of salary.
Check the video out at the 2:52 mark.
To do this week
Here’s how to get started:
- Spend 30 minutes — and ONLY 30 minutes — reading case studies, scripts, and examples on how to negotiate.
- Pick ONE of the following areas to negotiate:
- Personal finance (credit card companies, cell phone bills, etc)
- Craigslist (It doesn’t matter if you’re selling or buying)
- Farmers/Flea market (See what great deals you can put together)
- Your clients (raise your rates, or put together longer term contracts)
- Find a creative way to negotiate something within 3 DAYS.
- Leave the results of your negotiation, what you took away from the experience, AND THE SCRIPT YOU USED in the comment section below.
Remember: Be respectful when you negotiate. Never take advantage of the other person and never get rude.
Once you do this bit of practice, you’ll be ready to negotiate salary.
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