Last week I was a by-stander in a negotiation, and a pretty funny one at that.
No one wanted to be the first person to put their offer on the table.
Both the seller and the buyer seemed to be tapping into what many of us were taught—never be the first to put your offer on the table. As a result, that negotiation had a lot of awkward moments, and the negotiation kind of went sideways.
You were probably taught the same thing by some well-intended person. They said “Don’t be the first to put your offer on the table.”
Well, that person was wrong.
First, every study done on the subject clearly shows the person to make the first offer sets the starting point for the negotiation.
For example, let’s say you’re bidding a new piece of business. You will be better served to offer your price before the prospect tells you what they will offer.
Now this assumes your price can be justified, and it’s not just some crazy number you plucked out of the air. It also assumes you know their budget number…if they have budgeted something (and I find most smaller businesses don’t).
Better terms come your way when you put your justifiable number on the table first. The negotiation starts from this number.
The other reason to go first is this: If you won’t go first (because that’s what some knucklehead taught you) and your prospects won’t go first (because another knucklehead taught them the same thing), nobody moves!
And then things get awkward. The conversation goes uncomfortably silent. You hem; they haw. No one gets to the point. Perhaps a bit of suspicion about you and your offer starts to set in. Where they trusted you a few minutes ago, now they’re not as sure.
So when it’s time to share the price for your services, take a breath and put your justifiable offer on the table.
Be the leader and watch your return.