Decide whether to make the first offer, based on what you know.
Arjun is a freelance video editor who is about to agree a retainer with a developer he has already made launch clips for. Before he speaks to the manager there, he has to decide whether to name a figure himself or wait for her to name one.
You will hear two pieces of advice on this. One says whoever names a number first loses. The other says always go first and anchor high. Neither is right all the time. Lesson 4.1, "How the first number pulls everything toward it", explained why the first number matters. The question here is whose number it should be, and the answer depends mainly on how well you know the range.
Arjun knows the range for the retainer. He knows what the developer paid him for the launch clips, what two other editors charge for similar packages, and what studios publish on their websites. His target is S$5,500 (an example figure), and he has a reason for opening at S$6,000 (also an example).
If he waited, the manager might say S$4,000 and he would spend the call dragging the figure up. So he goes first and gives his reason. His number becomes the anchor, and the discussion happens around it instead of around hers. Because he explains the figure, the conversation starts near S$6,000.
If you have done the market research from Lesson 3.1 and know roughly what the deal is worth, going first usually helps you. In many situations it is natural or expected anyway. A freelancer is expected to quote, a seller sets an asking price, and a tenant asking for repairs to be included states what they want.
A different client, an agency, wants to license some of Arjun's drone footage for a television advert. He has never licensed footage for broadcast and doesn't know whether the going rate is hundreds or thousands of dollars.
Going first here is risky in both directions. If he names a figure that is too low, the agency accepts immediately and he never learns how much he left behind. If he names one that is too high, he may look like he doesn't understand the market and lose the deal.
So he asks the agency what budget they have in mind for the licence. Their answer tells him something about the range, even if it is a low opening. He can then do some quick research and come back with a reasoned counter. When you genuinely don't know the range, the other side's number is information you would otherwise pay for by guessing wrong.
Job offers often work this way by default, because the employer makes the offer. Letting the employer go first is fine as long as you have done your research and written your numbers down beforehand. Their number then lands next to yours instead of filling an empty space.
Whoever goes first, there is a stage before the number. Questions asked at this stage make the number better, because they let you build your figure around the other side's real needs and explain it in their terms.
On the retainer, before naming his figure, Arjun asks the questions from Lesson 3.3, "Plan your opening, questions and concessions". He asks how many launches are planned, what matters in launch weeks, and who else approves. He then frames his figure in the developer's terms, roughly: given three launches in six months and the need for fast turnaround in those weeks, this is the figure he proposes.
Questions also help when you have decided to let the other side go first. Asking about scope, timing and what matters to them often leads them to mention a budget or range without you asking for it directly.
Wei Ling is a job candidate. A recruiter calls and offers S$6,000, only S$200 below her target of S$6,200. She is tempted to accept on the spot out of relief, but she holds back.
Accepting instantly has three costs. The other side may wonder whether they offered too much. You give up a small improvement that is often easy to get. And you skip the chance to settle the rest of the package.
Wei Ling thanks the recruiter, says the offer is encouraging, and asks how the bonus and the first pay review work before she responds. Once she has the answers, she counters: if they could make it S$6,300, she would be ready to accept this week. Her reason for the counter is that she is ready to commit quickly, and the amount is small.
The result might be S$6,300, S$6,150, or a firm no at S$6,000. Any of these is fine, because she ends up above or close to her target and the conversation stays pleasant. When an offer comes in close to your number, follow the same pattern:
Don't accept instantly. Show you're pleased. Ask a question, for example about the rest of the package such as the bonus or pay review. Make a modest counter with a reason, such as being ready to commit quickly. Accept any outcome at or near your target, and keep the tone pleasant.
For your own negotiation, weigh how much you really know about the range against how much you would learn from hearing their number. The activity asks you to make the call and write down why.
For your next negotiation, decide whether you will go first and write down your reason in one sentence.
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