Successful negotiations are all about finding mutually agreeable solutions and that can only happen with a little bit of give and take. Concessions are an important, yet often misunderstood part of negotiations. Contrary to popular belief, concessions are not an indication of weakness, but rather a strategic plan for reaching a win-win outcome. Effective negotiations often require trade-offs on both sides, so learn how you can use concessions to your advantage. Here are some tips for meeting the needs of your counterpart without sacrificing your own goals and objectives.
When to Use Concessions in Negotiations
A concession strategy can be helpful for uncovering important information that include the interests of the other party, their budget, and their priorities. When used properly, this can help you close more lucrative deals. A good time to use concessions would be:
- When you want to gauge the negotiation strengths of the other party
- When you want to assess the other party’s allocated budget
- When you want to show interest in the needs of the other party
- When you want to bring your position back to the negotiation table
Just like any strategy, there will be times when you want to concede sparingly. Here are some important guidelines for implementing a concession strategy:
Never conceded too early, too quickly, or too much.
If you begin a negotiation by making concessions right away, you risk creating the expectation that you will concede on all issues throughout the discussion. Even if you have planned to make a few concessions, making it a hard fought concession so it appears as though you are giving away something of real value.
Never concede without asking for something in return.
Always have something in mind that is comparable in value to you before offering concessions. You can also bundle several concessions together if needed and offer the package in return for something of greater value if needed. You want to condition the other party in the process of give-and-take so that both parties can find value.
Plan your concessions in advance.
Prior to negotiating, you should make a list of items you would be willing to concede in order of importance. This will prevent you from conceding too much, too soon.
Always keep score.
Business negotiations can be complex and cover a wide range of topics so keep close tabs on what you give and receive throughout the negotiation, confirming any agreements in writing. Continue to remind your counterpart of concessions that have been made on behalf of both parties.