Negotiations Training

The Art of Making Concessions, Part II:
Tips on Concessions

We've already talked about the cardinal rule of giving and asking for concessions:

Never give a concession unless you get one in return

Now that we have made that point perfectly clear, it helps to understand some other very important pointers on giving and asking for concessions. To begin with, concessions normally come up at during the bargaining phase of the negotiation. If you plan on opening with the initial offer, you should keep two things in mind. First, when you make the first offer, you show the other party your aspiration level. They will have a better idea of what you have in mind. At the same time, by making the first offer, you may actually influence the other party's aspiration. That is, if you start high (which is what we recommend), you may actually lower the other party's aspiration. The best approach is to provide criteria that back up the reasoning for your initial offer. Don't pick an offer out of the blue - it needs to be supported by reasonable data.

Once you find yourself in a situation where you are looking at different alternatives with the other party, it helps to use conditional questions. These questions generally use "what if" or "if/then" structures.

"If you are able to have your crew start by 7:00 AM tomorrow, I can make sure that payment is delivered by noon."

"What if I were to provide an on-site engineer to help them team with the base deployment... could you then have the project finished by the 31st?"

As you work your way through the bargaining phase, remember some of these key guidelines:

* Never give concessions first. Encourage the other party to make the initial concessions during a negotiation.
* Provide concessions that are of low value to you but are perceived as higher value to the other party.
* When forced to give a concession first, give in on a minor concession in return for something else from the other party.
* One effective way to get a big concession is to offer several small concessions.
* Make the other party work for their concessions. This will increase their perception of value.
* Don't be too eager to give a concession. Do so slowly, even if your eventual intent is to provide it.
* Don't allow your concession patterns to lower your aspiration level. Stick to your aspirations as you bargain.
* If the other party refuses an offer, don't give in so easily. Persistence pays off.

One caveat - yes, it's true. There may be times when you may have to give a concession without giving one in return. These are rare cases. These should be unusual exceptions as you should always fall back on the cardinal rule of concessions.