406 / CONDUCTING NEGOTIATIONS
Making concessions
Conceding in small steps
Each negotiation event is unique, so
there are no absolute rules for how
to make concessions that apply to all
situations. However, it is generally true
that people like to receive good news or
benefits in installments, rather than all
at once. Skilled negotiators, therefore,
tend to make multiple small concessions
in order to increase the level of
satisfaction of their counterparts.
Knowing what to concede
Inexperienced negotiators often
make a first sizeable concession as
an expression of goodwill. However,
this can set the expectation that
there are many concessions to be
provided. Experienced negotiators,
by contrast, tend to untangle the
relationships from the concessions.
Sometimes, in order to set the tone
of reciprocating concessions, these
knowledegable negotiators concede
first by making a concession on a
minor issue.
Wait before you make the first
sizeable concession. During this time,
advocate for your initial offer and convey
the idea that it is not that easy to make
concessions. The second concession
should be smaller in size than the
first and be a longer time in coming.
Making concessions in progressively
declining installments will then lend
more credibility to when you finally say:
“There is no more to give.”
Experienced negotiators know that successful negotiations involve a
certain amount of give and take, and are well versed in the process of
making concessions. They tend to develop offers that leave room for
concessions, as these are the oil that lubricates the making of a deal.
WATCH YOUR TIMING
Think carefully about the
timing of your first sizable
concession. If you make it too
soon after your initial offer, it
will give the other party the
impression that the initial
offer was not a credible one.
Tip
30%
of bargaining behavior
is influenced by the behavior
of others, not self-interest
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MAKING CONCESSIONS / 407
ENABLING RECIPROCITY
Label the concessions you make as ones that are costly to you and then
reduce your value. This sets up the expectation that you will receive a
concession in return, implying value for value.
USING CONTINGENCY
If you suspect that your concession will not be reciprocated, offer a
concession that is contingent upon the other party providing a concession in
return. For example: “I will be willing to extend the terms of payment to 45
days if you will increase your order by 500 items.”
SETTING BOUNDARIES
Some negotiators put the deal at risk by asking for too much. Set boundaries
for the other party by being clear and precise about what you can concede and
what you absolutely cannot.
SETTING RULES
Sometimes negotiators make final concessions but then withdraw them or
make them contingent on receiving a new concession. Set a clear rule that a
concession cannot be withdrawn, unless it was explicitly offered as a tentative
or conditional concession.
SPOTTING DEAL BREAKERS
Some concessions are deal breakers: without them, your counterpart will
walk away from the negotiation table. Try to distinguish these from value-
enhancing concessions, which are demands that will get a better deal, but if
not provided, would not result in the other party abandoning the negotiations.
Making and interpreting concessions
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