Product Manager Salary Negotiation Tips

It’s understandable for most PMs to skip salary negotiation once an offer has already been made. Why would you go through a Product Manager salary negotiation when the pay is already reasonable, right? 

Most think that working out how much the pay should be might jeopardize the opportunity but there’s actually an opportunity lost when you skip the negotiation. 

There’s high demand for Product Managers, especially in the tech industry. This translates to more competition for companies to get the best talents. If you bring both experience and expertise to the table, it’s beneficial for you to discuss fair compensation.

But where would you start? Is there a right and a wrong way of approaching the Product Manager salary negotiation? We answer these questions and more today.

The Truth About Salary Negotiation 

Salary negotiation is a discussion between two parties (you and your potential employer) to reach a compensation agreement. Salary negotiation aims to get a fair deal for both parties involved.

So, will negotiating your salary compromise your chance to work with a company? It may help to calm your anxiety to know that businesses expect candidates to negotiate their salaries.

Even though the prospect of the talk may induce anxiety, keep in mind that negotiations are typical and, when conducted effectively, can set your lifetime earning potential on the proper path.

What Should You Consider When Negotiating Your Salary?

When you’re negotiating your salary, there are a few things you should keep in mind:

• What is the market rate for a Product Manage?
• What are your PM skills and experience worth?
• What is the company’s budget for your work?
• Are you willing to negotiate other benefits, such as vacation days or flexible hours?

Once you’ve considered these factors, you can start formulating a salary range that you’re comfortable with. Also, consider the following as you think about different factors to keep in mind:

Titles Make a Difference

Your title might have a substantial effect on your income. If you are currently employed as a Product Manager but are looking for a position with a different title, be careful to research the typical compensation for the role you are applying for.

You may be able to get a higher salary if you’re willing to negotiate for a different title. For example, suppose you’re currently a Product Manager applying for a Senior PM position. In that case, you may be able to get a raise by negotiating for the new title.

The Location Matters

The location of the business can affect your compensation. If you are seeking employment in a large city, you can anticipate earning more than if you were working in a small town.

That is because the cost of living in large cities is often higher, requiring employers to provide considerable compensation to attract top people.

If you would like to know more about the states that pay PMs the best, you can check: What are the Best States for Product Managers?

Consider the Company’s Size

The size of the company you’re applying to can also have an impact on your compensation. Generally, large corporations can provide higher compensation than small businesses or startups.

However, remember that giant firms typically have more bureaucracy, so your ability to make decisions and implement changes may be limited.

Previous Salaries

Your previous salaries can play a role in salary negotiations. If you’ve worked for a long time, you may have some negotiating power if your previous wages were lower than the industry average.

Conversely, you may not have as much bargaining leverage if you are starting. Consider additional advantages, including vacation days and flexible hours. It’s also important to take note that Product Managers are typically offered bonuses and equity.

When to Negotiate Product Management Salary?

Knowing when to negotiate can have a significant impact on the result of the conversation.

When it comes to talking about pay, there are two common mistakes to avoid: mentioning it too early in the interview process or too late after the decision has already been made to have you onboard.

The best strategy is to wait until you’ve received a job offer to discuss your salary.

Top Five Product Manager Salary Negotiation Tips

To help you gain more confidence in negotiating your Product Manager salary, we provide you with five negotiation strategies that will give you the courage to take action:

Listen along via Youtube if you prefer:

Do Your Research 

How you conduct research depends on factors such as your job status (employed or seeking employment) and current salary. However, there are some basic questions you should answer upfront: 

• What is your current salary?
• Have you received a raise in the past, and if so, for how much?
• What is the average salary of a product manager in your city or state?

For example, the average annual salary of a Product Manager in Washington is $116,243. But if you move to Oregon — which is only one state to the south — the average wage dips to $98,336. 

Note: Remote work is creating a new trend where salaries are the same across the country. When negotiating, it helps to know if the company adjusts its compensation based on location. 

You have a solid leg to stand on if you’re earning less than the average of other PMs in your area. As a general rule of thumb, ask for at least the 90th percentile of the salary average in your state. 

Negotiate at the Right Time

There’s a right and wrong time to negotiate your Product Manager’s salary. Your approach is based mainly on whether you’re employed as a PM or have recently received a job offer. 

If you’re already working as a PM, here are some things to consider:

• Negotiate during or after a positive performance review.
• Negotiate after the completion of a successful project. 
• Don’t be “that person” who attempts to negotiate a higher salary several times a year. 

If you’ve received a job offer, here’s what you should do:

• Don’t answer on the spot; give yourself enough time to think it over.
• Compare your request to the average PM salary in your city and state.
• Dig around online to learn how much the employer pays other Product Managers.
• Use the internet to understand how much other companies pay PMs, especially if it’s a niche space like crypto or fintech. 

Regardless of your employment status, you can put yourself in the driver’s seat if you have another offer. It’s one of the best negotiating times, as you can use it as leverage.

Explain to the company that you prefer to work for them but have a better offer from another employer. 

Another suggestion:

Remember that trying to bargain will not put you in the best light with your future employer. Know when to ask for extra money and when to put these ideas on hold.

Back-Up Your Stance With Results

It’s one thing to negotiate your compensation. It’s another to back up your claims. Could you explain why you deserve it?

For example, if you’re mulling over a PM job offer, let your experience and achievements guide your negotiation. 

Do you have targeted industry experience? Have you shipped products before? Do you have above-average expertise and knowledge of the industry in which you’ll work?

Or perhaps you’ve worked as a PM for the same company for several years. Make a note of your most significant achievements and most impactful contributions. It helps prove your value, which improves the likelihood of successfully negotiating a higher salary. 

There’s nothing wrong with talking about your achievements. You don’t have to brag. Stick to facts. It may not result in a higher salary all the time, but it’ll put you in a better position to get what you want. 

Salary is Important, But Don’t Stop There

At the onset, your goal is simple: to reach an agreement on a higher salary. However, don’t get so caught up in cold hard cash that you overlook alternatives that are just as appealing.

Your employer or hiring company may not be able to offer a higher salary, but they could:

• Offer better benefits, such as a more considerable matching contribution to your retirement account.
• Offer a sign-on bonus. 
• Give you stock options. 
• Allow you to work from home full-time or part-time. 
• Offer tuition reimbursement (which could result in a higher salary in the future).

Even though a higher salary is what you’re chasing, keep an open mind. 

Practice, Practice, Practice

We’ve talked primarily about how to position yourself to negotiate a more attractive salary. Also, this includes understanding the average wage of PMs in your area and knowing when to take action.

While all of that is important, you must be fully prepared when facing the hiring manager or your supervisor.

Here’s where practice comes into play. You never know how a salary negotiation conversation will unfold, but the more you practice, the easier it is to manage anything that comes your way. 

Here’s what you should do:

• Be sure how you’ll kick off salary negotiations. Will you come out and ask for more money? Or will you send an email or request an in-person meeting? 
• Talk through your “pitch” in front of a mirror: It sounds silly, but it’s a great way to improve your confidence. Do this a few times, make any necessary tweaks, and start back at the beginning. 
• Get help: This is particularly useful if you’re new to salary negotiations. For instance, our “Discuss” feature makes it easier to connect with Product Managers who can provide advice and feedback. 

Other Important Details to Remember

The following points should be kept in mind by anyone who plans to negotiate a wage for a Product Manager:

You Have Value

If they did not believe you would be valuable to the firm and were not willing to invest in you, you would not be this far along in the process. Therefore, negotiate accordingly.

Do Not Count on a Raise

It is not a good idea to accept a lower wage with the thought that after you begin working, you will be so valuable to the company that they will eventually raise your pay. In most cases, this is a poor decision.

Because promotions and salary raises, and cost of living increases are no longer guaranteed, you should expect to make the same amount of money as you did when you started.

Learn Your Limit, and Don’t Go Over it

Determine the absolute bare minimum that you are willing to accept, and regardless of how appealing the role or the company might be, don’t let that stop you from asking for it.

You will swiftly resent the corporation for lowballing you if you cannot pay your bills, save for your retirement, or take a vacation (and yourself for taking it).

Comprehend the Facts

Ensure you thoroughly understand the offer before accepting it, as benefits like stock options and equity can be precious.

There is no significance to the number of votes a company promises unless the total number of shares issued and their overall prospects are known. The same is true for the complimentary meals and massages offered onsite.

Be Optimistic Right From the Beginning

Accepting a wage lower than your desired amount is acceptable, but you should begin your new work feeling optimistic about the move and not upset or guilty about the package you have been offered.

Final Reminders for Negotiating a PM Salary

As you enter a product manager salary negotiation, it’s natural to fear the unknown. You don’t know if everything will go as planned or if your strategy will soon run off track.

Here are some final reminders:

• Be professional: Not only does this improve your odds of success, but it also helps minimize bad feelings if you come up short. 
• Don’t assume you’ll earn more in the future: You want to get your foot in the door, but it’s not always a good idea to do so at a lower salary than you deserve. Don’t fall into the trap of assuming that a pay raise will come your way down the road.
• Know what you want and how flexible you are: Go into salary negotiations with a clear idea of how much money you want. “As much as I can get” is not a good approach. Also, if you’re a new hire, set an absolute minimum that you’re willing to accept.

These product manager salary negotiation tips will help you prepare for and move through the process. However, before you reach this point, you have to ace your Product Manager interview first.

PM Exercises has plenty of helpful resources to get you started in prepping for an upcoming PM interview. Check out our PM interview prep course which has over 100 video hours plus more than 100 online lessons that will equip and make you feel more confident before your interview.

Along with the PM prep course, we’ve also compiled over 2,000 Product Manager interview questions with sample answers from our PM community. Lastly, there’s also a feature on the PM Exercises website where you can search for members of the community who are willing to do mock interviews.