Making the first offer
When you know the market, going first lets you set the anchor; learn how ambitious to be, why a precise number helps, and when to let them go first.
SET THE ANCHOR
Why going first often helps
Because of anchoring, the side that opens tends to end closer to its own number. Research by Galinsky and Mussweiler (2001) found that in their negotiation experiments, whoever made the first offer tended to get the better outcome. Your number becomes the reference point, and the other side's counter-offer is pulled towards it.
Sara's employer asks what she has in mind. If she names a well-researched $64,500, the talk starts around her number. If she waits and they say $55,000, the talk starts around theirs.
Who should open?
Let them go first
When you truly don't know the range and can't find out: an unusual item, a role with no public pay data. Their number teaches you something, and you avoid opening far too low. Even then, research what you can, so you're ready to resist their anchor.
Go first
When you have good information about what the thing is worth: listings, pay surveys, past deals. You set the reference point, and you set it where your research says it can be justified.
Check yourself
When is it wise to let the other side make the first offer?
- Always: going first shows your hand
- When you genuinely don't know the market range and can't find out
- When you have plenty of market data
- Whenever you feel nervous
Show the answer
When you genuinely don't know the market range and can't find out
Right. With no reliable sense of the range, their number gives you information and protects you from opening far too low. With good data, going first usually serves you better.
How ambitious should the first offer be?
- At or somewhat beyond your target, never at your walk-away point. You'll almost certainly move, so start where moving still leaves you happy.
- Justifiable. You should be able to give a real reason: "Based on three similar listings..."
- Not extreme. An offer you can't justify can insult the other side and end the conversation.
- Leave room to concede. People expect movement, and a deal where both sides moved tends to feel fairer to both (lesson 5).
$4,850, NOT $5,000
Precise numbers sound researched
Research by Mason and colleagues (2013) suggests that a precise first offer, like $4,850, is read as better informed than a round one like $5,000, and tends to draw smaller counter-offers. A round number sounds like a guess, and a guess invites a round counter: "How about $4,000?"
Parisa, a freelance designer, quotes "$4,850 for the logo package". The client assumes she's worked it out, and counters with $4,600 rather than a round $4,000.
Check yourself
Parisa is quoting for a logo package. Which opening is strongest?
- "About $5,000?"
- "Whatever you think is fair."
- "$4,850, based on comparable projects at $4,500 to $5,200."
- "$9,000, because I really want it."
Show the answer
"$4,850, based on comparable projects at $4,500 to $5,200."
Yes. It's precise, ambitious within the market range, and comes with a reason the client can check.
Sara's job offer: her numbers before the call.
Market data for the role: $55,000 - $65,000
Walk-away point: $57,000
(current pay + the cost of changing jobs)
Target: $63,000
First offer: $64,500"Based on market data for this role of
$55,000 to $65,000, and my experience,
I'm asking for $64,500."
Anchored high, justified, room to move.Notice what she didn't say: "I was sort of thinking maybe around sixty, if that's OK?" Justify the number; don't apologise for it.
Range offer
Giving a range instead of one number, such as "$62,000 to $66,000". It can feel softer and more open. The catch: the other side will hear the bottom of the range. So if you give one, make the bottom your target, not your walk-away point.
Sara's target is $63,000. "$63,000 to $67,000" works for her. "$57,000 to $63,000" tells them she'll take $57,000.
Check yourself
If you give a range, put your target at the top of it.
Show the answer
False
False. The other side will hear the bottom of the range, so put your target at the bottom. A range that starts at your walk-away point tells them exactly where you'll settle.
Make your first offer
- Check your prep
BATNA, walk-away point, target and market data (lessons 2 and 3). If you don't have data, decide whether to find some or let them open.
- Pick a precise number at or beyond your target
$64,500 or $4,850, not "about sixty" or "five thousand-ish". Leave room to move.
- Attach the reason
"Based on..." plus something they can check: listings, pay data, comparable projects.
- Say it plainly, without apologising
No "sort of", "maybe" or "if that's OK". A calm, level voice does more than a clever phrase.
- Then stop talking
Whatever you add now tends to be a concession nobody asked for. Lesson 6 is all about this moment.
Check yourself
Parisa quotes $4,850 and the client says "Deal" before she's finished her sentence. What does that most likely suggest?
- Her offer was probably lower than it could have been
- Her offer was far too high
- The client didn't understand the quote
- Nothing: the speed of a yes tells you nothing
Show the answer
Her offer was probably lower than it could have been
Yes. An instant yes usually means the number was comfortably inside what they'd pay. It's not a disaster, but it's useful information for her next quote.
Lesson recap
- The first offer sets the anchor, and in experiments whoever opened tended to get the better outcome. "Never go first" is not a good general rule.
- Go first when you know the market; let them go first only when you truly can't find out the range.
- Aim at or somewhat beyond your target, with a reason you can give, and leave room to concede.
- Precise numbers like $4,850 sound researched and tend to draw smaller counters than round ones.
- If you give a range, make the bottom your target. Then say the number plainly and stop.
- For your prep sheet: my first offer, and the reason I'll give for it.