Truth 17. Plan your concessions

Few negotiations end after one round. Rather, there is a back and forth, with parties making offers and counteroffers. This is the dance of negotiation. I advise you to plot your offers and counteroffers with the precision that a football coach would bring to the Super Bowl. In other words, to prepare for an upcoming negotiation, you should know every stat about past negotiations: how many concessions you made, the size of your average concession, how many concessions the other party made, how far apart the two opening offers were, and so on.

Why? Because people often get carried away by the momentum of the negotiation and fail to think analytically about the pattern of concessions. This leads to one or more of the following mistakes:

▪ You make concessions too quickly, before you explore interests.

▪ You make concessions that are too large. (In contrast, making small concessions creates goodwill and signals that you’re reasonable but getting closer to your reservation price.)

▪ You make concessions while the other party remains intransigent.

To get in the habit of keeping track of the negotiation game, I strongly advise keeping a little notepad in front of you, even making visual sketches, rather than writing in paragraphs. That way, you can say things like,

Look Pat, I want to point out that I’ve come down $50,000 since we started talking, and by my records, you’ve increased your offer by only $10,000 so far, or only one-fifth of what I’ve come down. (Such a statement puts pressure on the counterparty to make concessions.)

Francis, I’ve made concessions on all the issues we’re talking about; according to my records, you’ve only made concessions on one. I ask you now to consider what you could do on some of the other issues.

Sometimes, negotiators make a plan they can’t follow through on. For example, I’ve heard several negotiators plan to make no concessions. This is ill advised: If you refuse to make concessions, the negotiation quickly reaches a stalemate.

Sometimes, negotiators make the opposite mistake: They open with a great first offer, which is inevitably refused by the counterparty. On their next move, they make a too-deep concession, effectively giving up all their bargaining ground.

As a general principle, negotiators should make concessions on issues that are the least important to them. Don’t expect the other side to give you credit for making a concession. They usually won’t. For this reason, you need to announce your concession. Say something like,

I’ve been listening to you carefully. My current offer on the issue of paid vacation days is 7 per year. I know you want that number to be higher. So, I have thought about it and I could live with 10 paid vacation days per year. (Get up and cross out 7 and write 10.) Thus, I’m willing to concede on this issue by increasing from 7 to 10 days.

Note that in the preceding statement, the negotiator is doing four things: (1) reminding the counterparty of an opening offer of seven days; (2) drawing attention to the fact of being willing to make a concession on that issue; (3) writing the new number on the board, another way to create quid pro quo pressure; and (4) explicitly inviting the other party to respond.

If you don’t invite the counterparty to respond, he has much less incentive to make a concession.

I would advise you as the negotiator in this scenario not to make further concessions on any of the issues until the counterparty has made a concession. When making concessions, if the counterparty doesn’t write down the numbers proposed, take over the board yourself. I’ve seen too many negotiations break down because of “miscommunication.” Words and proposals fly back and forth, but everyone gets confused when it comes to actually writing the exact terms.

Suppose the counterparty does indeed make a concession. At this point, you might want to make another concession—again on an issue that is less important to you. I advise negotiators to reduce the size of their concessions with each successive offer, to signal to the counterparty that they are nearing their reservation point.