Strategies for Making Concessions
In addition to the previous key considerations, other strategies for making concessions include:
Always get something in return. If done for goodwill, acknowledge it. One of the classic errors made by inexperienced negotiators involves giving something to the other side in the interest of maintaining goodwill in the relationship but not labeling the offer. Skillful negotiators will label their concession: “I’m doing this in the interest of goodwill” or “In order to keep things moving, I’m willing to . . .”
Look for elegant concessions (i.e., low cost/high value). Before making a concession, analyze the value of your currencies by assessing the cost to purchase the same item separately. In many cases, service contracts on electronics or other consumer goods can provide a customer with peace of mind while providing a high margin gain for the store. As demonstrated in the creative currencies exercise described earlier in this chapter, the currencies we control may have a much higher value to the other party than we realize. The secret is to analyze the other’s needs and make appropriate concessions that are low cost to you, but high value to the other.
Agonize where appropriate. In the enthusiasm to make the deal, salespeople sometimes make the error of offering a concession by saying “Sure we can do that for you.” Even though it might be easy to engineer, the best approach is to hesitate and say, “I’m not sure I can do that, let me check to see what [fill-in-the blank with some authority, sales manager, or company policy] says.” On the buyer’s side, you may really desire the item, but be cautious. If the real estate agent knows you love the house and are already mentally moving your furniture into it, you are likely to find a firmer position on price. A better tactic involves saying: “That would really stretch the budget” or “I’d like to look at other properties to get a better sense of the market.”
Use your settlement range as maneuvering room. One of the best reasons to develop a settlement range becomes obvious when we are considering a concession. If you focus on your Desired Settlement Point, you can add or subtract the value of the currencies in play and determine if the deal still meets your needs and expectations.
Make the concession and move on. Timing is important. Unlike agonizing as mentioned earlier, if you have to offer a concession, make it and move on. You do not want the other side to continue to pursue this issue on the table. This is where a partner on your side can be a great asset. Shifting the speaker signals a move to a new issue.
Watch your pattern of concessions. If you progressively increase the size, the other party may try to prolong the negotiation. How you make concessions communicates as much as what you concede. During the negotiation, be aware of your time limitations. If you have to reach agreement by a certain time, you may feel forced to make concessions earlier in the process than you had intended. When the other side senses that you are under deadline pressure, they may try to delay the negotiation to see if you will make additional concessions.