Lesser alternative to NameTwoFigures. Trouble is your prospective employer frequently doesn't know where the market is and is looking for you to give 'em a place to start the negotiation. If you don't give them one, they may start well below where they could start. Also tends to make you look ignorant of the market yourself.
- One application of this rule is to never state your minimum number; or else that's what you'll likely get. Feel free to state a number which is higher than the minumum number (or lower that the maxium if you are the buyer) as a starting point.
The old rule of thumb is that the first party to name a figure loses the negotiation.
- Were that to be taken to its logical extreme; no negotiation would ever conclude as both parties would DeadLock waiting for the other to name a figure first. (Unless some neutral third-party were used who would solicit bids from buyer and seller, and keep doing so until the asking price was equal to or less than the bid price).
- Not at all. It's not "deadlock", it's both parties walking away from the deal, which is perfectly normal during negotiations when neither party are desperate for the deal.
- OK; however it seems odd that negotiations would stop because neither part was willing to make an offer first. Were that to be occur; I'd either a) suggest simultaneous offers from both parties, revealed simultaneously, or b) make a high/lowball offer just to get the ball rolling.
- Perhaps; it's only a rule of thumb, but the rest of this page illustrates the inherent dangers in being the first one to name a number. It might be quite a bit higher (respectively lower) than the other guy would have been comfortable with.
- In negotiating with potential employers, however, the employer has all of the advantages ahead of time, so when they try to insist that I name a number first, I just politely point out to them that companies are the ones with the advantage, so it behooves them to go first. They always do. Other kinds of negotiations may need some kind of device to avoid deadlock of egos, as suggested.
- If either party is desperate, then they are at a supreme disadvantage in negotiations.
- Another important rule of thumb is: truly BeReadyToWalk away from the deal. Otherwise you can't truly negotiate. This is related to KnowWhatYouWant, which consumers do not, but professional negotiators do.
- Keep in mind. Once either party states a number; that number becomes a ceiling or floor (as appropriate) for the final price. (Offers can be withdrawn, and you can give a DeadlineToAccept; but it's difficult to get a higher price than one you've previously offered to sell for. In many situations, retracting offers on the table is considered a bad-faith negotiating practice, though it can be quite effective against a party with a weak position). Only true if all else remains the same. Ask SirHumphrey? how often that happens. "Now that I understand what you're looking for, ..."
As for the employer not knowing the market, that's absurd. Companies have resources for finding out about these things trivially, whereas it is typically much more difficult for employees.
Part of the NegotiatingPatternLanguage.
CategoryNegotiation
Never State Your Number