Negotiation Strategies September 17, 2009

Everything to Know About Concessions During Negotiation

In most negotiations, both sides move from their original positions. It is wise to leave yourself 'negotiating space' when you make your initial offer.

Each side to a negotiation usually compromises by making some concessions to reach agreement. Careful concessions help guide you through this process towards a mutually satisfying agreement. Below we list some tips on things to keep in mind when making concessions.

Don't Give Free Concessions

Never give a concession without obtaining one in return. Don't give concessions away free or without serious discussion. A concession granted too easily does not contribute to the other party's satisfaction nearly as much as one that they struggle to obtain.

Craft Your Concession Wisely

Concessions that are poorly made can serve to further separate the parties rather than bring them together. A concession may serve to raise the aspiration level of the other party if it is interpreted as a signal of your weakness. Don't be too quick to give a concession, and don't 'shoot from the hip' -- think through the potential impact of any concession you give. How a concession is made is as important as the value of the concession.

Keep Count

Never lose track of how many concessions you have made, regardless of their value. The overall number is important and can provide bargaining leverage. Keep a written record of your concessions.

Stay Flexible

Flexibility is like money in a checking account. Do not use up your "bank account of flexibility." Every concession should bring you closer to some goal. If you use up all of your potential concessions your bank account is down to zero and deadlock is harder to avoid. Always look for a concession that the other side will value more than what it really costs you.

Build In a Way to Retreat

Don't feel constrained to stick with a concession on a specific issue. The whole agreement is more important than individual issues. Indicate to the other side that all concessions you give are tentative and based on a satisfactory overall agreement (i.e. "tie a string"). Some people tend to stick to interim concessions when they should not. They fear that their integrity may be questioned if they retreat from concessions they have made. Such rigidity can be costly.