Every negotiation requires to give and take and concessions are a part of doing business. However, there are effective and ineffective ways of conceding. How you concede can have a huge impact on the outcome of the negotiation so it’s important to make thoughtful considerations before making concessions. As you prepare for your next negotiation, consider these tips for conceding effectively.
Make a List
Concessions are an essential part of any negotiation so you need to plan for them before you sit down with your counterpart. Write down a list of concessions you are willing to make and what you want in return for each one. Be sure and prioritize this list based on what is most important and least important to you. It is also necessary to consider how important each concession is to your counterpart. Prioritizing the list is a crucial step because you don’t want to give away your most valuable concessions first.
Build Concessions into your Negotiation Plan
Remember that your counterpart has an emotional need to feel like they have “won” the negotiation by beating down your price, pushing for earlier delivery, or extending the warranty. Knowing how much importance the customer places on each item can influence your negotiation plan and help you to decide which concessions to build into your plan. Make sure to allow for bargaining room on the topics that are most important to your counterpart.
The concession must appear to have value for it to be worth anything for your counterpart. You must make the other party feel like they have secured a victory when you make a concession. For example, you might be able to offer earlier delivery without any hassle but if you simply respond with, “No problem” to their request than that concession has very little perceived value. Your goal should be to make a low-value concession appear as a high-value win for your counterpart.
Never Give Anything Without Asking for Something in Return
You never want to make a concession without asking for something of equal value in return. Your counterpart should understand that any concession you offer is contingent upon a reciprocal concession of equal value. The “tit for tat” strategy helps to build a trusting relationship because both parties demonstrate a willingness to give and take.
Timing is Everything
When you concede is just as important as what you concede. You never want to offer a concession on the first major point. When you make concessions right out of the gate it will be perceived as a sign of weakness and your counterpart might start making demands to see how much they can get. Remember to concede slowly because those that happen quickly don’t feel like valuable concessions. You also want to save a little something for the very end to help you close the deal.