How to Ask for More Money
Article by Cecilia Meis
Negotiation can be intimidating, 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 your profit margins.
Running a business often means teetering between standing firm behind the value of your time and skill set and bending over backward to avoid losing a client. Sometimes the stakes are high, but often, it’s all in our heads.
So why aren’t we — especially women — asking for more money more often?
In her book That’s What She Said, Joanne Lipman recounts a study conducted by Linda Babcock, coauthor of Women Don’t Ask: Negotiation and the Gender Divide, which found that 12.5 percent of women negotiated for their starting salaries compared to 52 percent of men. Lipman also cites a study of 4,600 employees in Australia which found that even when they ask for raises, women are 25 percent less likely to receive them.
Women may be hesitant to negotiate because they are often afraid of damaging the relationship or being seen as overly aggressive. In her bestselling book Lean In, Sheryl Sandberg cites research which found women who negotiated higher salaries for themselves were seen as “more difficult to work with” — a sign, Sandberg notes, of society’s stubborn adherence to traditional stereotypes.
In That’s What She Said, 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.”
Does the answer lie in societal constructs, personal fears, or genetic predispositions? As with most complex issues, we’re likely looking at a combination of multiple factors. For you, this means taking action with regard to the factors 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 negotiations by considering past numbers. Your previous salary or negotiation amount may not have matched the service given, meaning it’s not necessarily 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 request. This evidence can include measurable achievements and letters of recommendation 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 qualifying 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. Most importantly, imagine yourself succeeding.
You can 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 tense signals to your brain that the goal is a definite, and you’ll naturally begin focusing on ways to achieve that goal.
Case Studies in Negotiating
Here are a few case studies that look at business owners who have succeeded, and failed, in negotiations and continue working to perfect the art every day:
1. Sarah Frey, CEO and Founder of Frey Farms
“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 he not only pay more but 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 a 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 agribusiness 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.”
2. Maria Avgitidis, CEO of Agape Match
“A typical matchmaking program for our clients 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, your accomplishments, and your qualifications. Research has shown that women negotiate better in communal environments, so if you find yourself struggling, imagine you’re advocating for a qualified and respected coworker.”
3. Angelica Terrazas, CEO and Founder of Launch LA
“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 as a senior vice president:
“First, 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 okay with not landing it. Missing one deal will not make or break your career, but getting into the wrong deal definitely can.
“Second, 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. This takes the emotion out of hard-numbers negotiation. If you can’t make it work, know that it’s time to move on.
“Finally, negotiate like you sell. 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 is 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
“The best negotiations happen when the other party is trying to win you over. Let them make the suggestions, and soon enough they’ll be suggesting exactly what you were looking for.”
Cecilia Meis is a full-time writer and editor based in Dallas, Texas. Besides SUCCESS, her work has appeared in Time Out Dallas, Rewire, Healthline, and others. Outside of work, she plays beach volleyball, attempts home cooking, and is ardently working toward making her cat, Nola, Insta-famous.