Every negotiation involves a little bit of give-and-take and that’s why concessions are often a necessary part of negotiations. That said, the process of making concessions is easier said than done. Concede too much too fast and you risk leaving money on the table but concede too little too slow and you risk losing the deal. There are effective and ineffective ways to make concessions so these strategies will help to ensure you are conceding the right way.
Make a List of Concessions Beforehand
Concessions are to be expected in just about any negotiation so it’s important to consider them beforehand. Write down a list of concessions you are willing to make and what you want in return for each concession. You also need to prioritize the list based on what is most important and least important to you.
You should never make concessions without getting something in return. Otherwise, you risk having your counterpart ask for more even more concessions. Sometimes your counterpart might be slow to reciprocate so you should make things very clear right from the start by saying something like, “I am prepared to do this for you if you do that for me.” Make sure your counterpart knows exactly what your expectations are by stating them clearly.
If you make a large concession right off the bat you will lose credibility with your counterpart. You will leave them thinking, “If they are willing to give that up so easily, what else are they willing to give up?” If it comes time to make concessions, concede the least amount necessary to keep the negotiations moving forward.
Label Your Concessions
You can never assume that your actions will speak for themselves. Your counterpart is trying to play the game too, so they will try to ignore and overlook your concessions whenever possible so they can avoid the need to reciprocate. Therefore, it is up to you to label your concessions, so you have made it clear what you are giving up. When you label your concessions, be sure to emphasize how they will be beneficial for the other side.
Keep Track of Your Concessions
Concessions can amp up the complexity of a negotiation and it can be difficult to remember everything that has been agreed upon. Therefore, you need to write down and keep track of every concession between both parties. You can also refer to concessions to remind your counterpart of your willingness to be flexible.
Save Something for the End
Sometimes negotiations come right down to the wire and you want to have enough fuel in your tank to close the deal. If you have already given up all your concessions, you will have nothing left and it can end up costing you all that hard work. Rather, hold on to one last concession and always have that final deal up your sleeve. When the time is right, come in with that last bang so you can wrap up the deal.