How to Ask for More Money
Negotiating can be intimidating. It’s true whether you’re a CEO looking to close a deal that could take your Fortune 500 company to the next level, a junior regional manager in that same company trying for a raise, or a member of the YouEconomy trying to increase profit margins.
Running a business often means teetering between standing firm behind the value of your time and skill set, and the potential cost of losing a client. Sometimes the stakes are high, but many times, they’re bigger in our heads.
So why aren’t we asking for more money more often?
In a study of 78 graduate students, Linda Babcock, co-author of Women Don’t Ask: Negotiation and the Gender Divide, found that 12.5 percent of women negotiated for their starting salary, compared to 52 percent of men. The reason: Women are often afraid of damaging the relationship or being seen as overly aggressive. In her bestselling book Lean In, Sheryl Sandberg cited research which found that women who negotiated higher salaries for themselves were seen as “more difficult to work with”—a sign, Sandberg noted, of society’s stubborn adherence to traditional stereotypes.
A 2014 study of 4,600 employees in Australia found that the problem is not whether women are asking for raises, but that they are 25 percent less likely to receive them. Moreover, 15 percent of the participants, equally men and women, reported being hesitant when asking for a raise, for fear of upsetting the relationship.
In her new book, That’s What She Said, Joanne Lipman suggests the unpopular truth is that women are simply different. Women often don’t know their worth and tend to undervalue themselves. When they do realize their value, they are often seen as bossy and uncompromising.
“Men and women are wired differently,” Lipman writes. “And in some ways, women are programmed from birth to value their personal contributions less.”
Related: 6 Steps for Negotiating the Salary You Really Deserve
So does the answer lie in societal constructs, personal fears or genetic predispositions? As with most complex issues, the reason is likely a combination of multiple factors. For you, this means taking action to combat the factors that you can control. Whether you’re negotiating your first salary or working through contract renewals with 40 different vendors, knowing when and how to negotiate for more money is invaluable. Here are some tips to get you started.
1. Wipe the slate.
Don’t begin your money negotiations by considering past numbers. Often your previous salary or negotiation amount didn’t match the service given, and it’s not always an indicator of what you should receive now.
2. Be prepared.
This is not the time for a spontaneous conversation. Set a meeting far enough in advance to give yourself ample time to prepare, which includes gathering evidence that supports your ask. This can include measurable achievements and letters of recommendations from supervisors, colleagues and clients.
3. Take ownership.
Exude confidence in your abilities. If you landed a huge client last year, don’t say “we.” Similarly, avoid qualifier language that downplays your achievements. You didn’t land just 16 new clients and increase efficiency by only about 5 percent.
4. Envision a positive outcome.
What you think about matters. What you tell yourself matters. Before your negotiation, create a mental scenario. Imagine what you’re wearing, where you’re sitting and what you’ll say. Imagine potential responses and how you’ll address them. But most important, imagine yourself succeeding. You can help do this by putting your win in ink. In the present tense, write down your successful negotiation. For example, “I earn 12 percent more than when I started at this company one year ago.” Writing in the present signals your brain that the goal is a definite, and you’ll naturally begin focusing on ways to achieve that goal.
Our case studies look at business owners who have succeeded, and failed, in negotiations, and who continue working to perfect the art every day:
CEO and Founder of Frey Farms; St. Louis.
I’ve always had to ask for more money. The cost of doing business rarely goes down; it always goes up. When I was 8 years old, my mom said we needed to raise the price of the melons, and I just did it. I walked into the produce department and looked around. They were nearly sold out of cantaloupes, so I took advantage of the moment. I told the produce manager that our melons were really fresh and worth paying a little extra for. Then I suggested that not only he pay more, but that he also buy a few extra so he didn’t run out. I didn’t make it about what I wanted. Instead, I made it about what the customer needed.
At an early age, I felt a need to show my independence and prove that I could build this small family farm into a business. I was often the only woman in the room full of businessmen. I didn’t have an advanced degree at the time. I hadn’t worked for a major corporation. I was incredibly young. Plus, I was committed to building my agri-business in a sustainable way, which was an innovative way of thinking.
I am a risk taker at heart—sometimes to my own detriment. Be bold, be brave, and take risks. Stand up for what you believe in, and model good behavior for others around you. You have to advocate for yourself first. Don’t be afraid to ask for more money, but do it at the right moment and in a way that fills the other person’s need.
CEO of Agape Match; New York City
A typical matchmaking program for our clients, all singles, begins at $25,000, and a key component of negotiation in high-end services is to differentiate worth versus value.
Worth is the range it costs me to serve my client. Worth can also mean my client’s affordability. Value is the strengths and contributions I bring to my company that attracts the kind of people my clients want to date. Value can also be my client’s need to meet someone to fulfill their relationship goals. These are important in the negotiation discussion. I spend most of my time with a client making our negotiation conversation value-driven.
Managing expectations from the get-go is so key to any successful partnership. Working on those expectations and acknowledging the steps we’re taking to get closer to our goals gives our business relationship room to thrive. Know your value before heading into a meeting or negotiation and ask questions that showcase your value, your experience, accomplishments and qualifications. Research has shown that women negotiate better in communal environments, so if you find yourself struggling, imagine that you’re advocating for a qualified and respected co-worker.
CEO and Founder of Launch LA; Los Angeles
I’ve always considered myself to be a great negotiator in the corporate world, but when I took the leap to start my own company in entertainment and began working on my first licensing deal, I crumbled. Everything that worked for me in my career suddenly made me feel insecure on my own. I felt like I was missing the cushion and muscle from my corporate job.
Here are three things I learned about negotiating as a business owner versus a senior vice president:
- Keep a chilled confidence. In negotiations—in entertainment especially—people can sniff out fear, and they’ll use it to their advantage. Be clear on your unique value proposition going in and be OK with not landing it. No one deal will make or break your career, but getting into the wrong deal definitely can.
- Know your numbers. I can’t stress this enough. Run a thorough cost of business analysis so you have a clear and defined ballpark to stay within. Convey that with eloquence. That takes the emotion out of hard numbers negotiation. If you can’t make it work, know that it’s time to move on.
- Negotiate like you sell. But in this case you’re selling why someone has to work with you, give you this deal, etc. You need to find the why, and you can do that by employing one of three tactics:
- Scarcity: “If you can’t match this price, I’ll need to switch to another vendor that can.”
- Selling the dream: “We’re about to close a huge contract next year that’s going to double our revenue. This small discount per unit isn’t going to break the bank, but imagine what your commission is going to be when you double this in six months.”
- Let them sell you: “Your [product or service] is interesting, but addressing X and Y issues in our company is my top priority.” The best negotiations happen when the other party is trying to “win” you over. Let them make the suggestions and you’ll find soon enough they’ll be suggesting exactly what you were looking for.
Related: 15 Negotiation Tips From People Who Always Get Their Way
This article originally appeared in the Summer 2019 issue of SUCCESS magazine.
I just love to see a women drive a hard bargain. Her braveness, her confidence, her discipline and ambition are all intricate parts of her character. Her AMAZING unrelenting character.