On the flip side, a friend of mine uses this tactic aggressively when negotiating salary and equity at companies. It's always worked for him and is considered a "cost of doing business" when trying to hire this person.
What's the difference? The former was being hired for a junior position, the latter for a senior position.
It's all about leverage. If you can bring a lot to the table, you can play the "other people want me" card. If you are bringing relatively commoditized skill to the table, then that card just makes you look foolish.
Hope this helps.
> Right Time, Right Place
> Relevance, Comparability
> Don't Bluff
Right time is only when it will make a difference. Upfront is not the right time. The right time is when there is an actual/reasonable offer put forth with a flaw or other "bridgeble" gap, that if it were "at market" would be a non-issue. The other offer is evidence of "where the market is at". This is completely fair use.
Relevance and comparability, though, mean that you should not pretend an offer for X is the market for Y. If you do this (on purpose or unwittingly), not only will it most likely not work, you may raise some eybrows. Classic example is using a comp from one market (like, from SF) in another market (midwest), or between job-titles, or whatever. If you are truly deciding between a career in X and Y, you need to be very careful about this.
Lastly, be very careful unless you are willing to walk from the table. If you are 100% OK with taking the other job, for example. Alternatively, if the point you are negotiating is a definitive deal killer (ie, it will make you walk away) then again, it makes sense to consider bringing what you have to help get a deal done. This will give the other party some ammo to use internally to overcome a barrier, which is in both of your interests, etc.
You aren't more interested in the money than the job, likely, unless the job is eating Doritos and watching TV all day. Most people have plenty of things to keep themselves occupied with such that, if they didn't need to work, they'd have plenty of other things to do. You go to work for the paycheck, and while other things factor into the equation, for most people the paycheck is the biggest factor.
Tell them you have other offers, and cannot respond to them immediately but will get back to them. Tell them your concerns about remuneration: quality of life, work role, etc. but so you have more points to negotiate upon.
If you make it about a singular point, it could just break negotiations and get you less in terms of total compensation than you'd have otherwise been able to gain.
Have conviction in whatever you do. For me the most effective way is to be completely open, share with each party the offers I already have and transparently share with them the pros-and-cons for joining them.
It's important to not just try to sound genuine but be genuine. Involve them in your decision making process, invite them to explore all options.
But once they've offered you everything they can, sit back and take a decision that serves your best interest.
...if you like the job but the offer is grossly under the other one you have already.
...if it's a direct competitor. Tell them that you're only telling them as a professional courtesy in case they may not want to divulge sensitive information during this stage of the negotiations.
Don't...
...mention it early in the interview for no relevant reason as this clearly makes you look arrogant.
...mention it at all if you're not even interested in this job.
Use this in addition to the value you bring and other context etc. as you mentioned.
I will say that I have competing offers, and I'll be up front about what I want to make. I think at that point my potential employer has all the information they need.
When you use it as your main tactic for giving off an aura of competence due to the market fighting over you, it comes off as arrogant and makes you look foolish, especially when applying for junior level positions.
Wait till they ask, if they ask, it means they want to fight for your "interest" in working for them.