January 5, 2024

Managing Concessions

How a person responds to a concession can be affected by the concession itself. For example, if one party makes a large concession, instead of being satisfied, the other party often reacts by making greater demands.

Cause & Effect

What we do or say affects, and is in turn affected by, what the other party does or says. It's like a chain reaction!

Where does all this lead us? You have to think through the effect each concession will have on the other person. Ask,

• "If I make this concession, how will they react?"
• "What should I do next?"
• "What decision do I 'realistically' want them to make?"
• "Why have they not already made that decision?"
• "What action can I take that would make it easier for them to make a decision in my favor?"

Little questions like these can help you see your concession from the other person's viewpoint, and will help you develop a concession strategy. These questions will also help you think more constructively about your own actions and how they relate to the decision-making process of the other person.

Let's Be Fair

Most of us have a desire to be fair. Justice dictates that if I make four concessions to you, you will feel obligated to make at least one to me.

The central question in negotiation is not whether I made four and you made one, but whether your one was more valuable than my four. Many a negotiator has done well by making a series of minor concessions and then saying, "Now, what are you going to do for me?" That's the one point that really matters.

Let's Split the Difference

Splitting the difference is a quick way to reach agreement. It seduces us. After all, people are used to giving and getting equal shares at home, at restaurants, and at birthday parties. Splitting in the middle is simple. Not splitting in the middle is full of problems. It brings up a tough question: "If not in the middle, where else?"

The question "Where else?" is interesting. Things that are equal are not necessarily equitable.

• Players in the World's Series share the purse equally. Yet, each player did not contribute equally. It would be difficult to determine each player's real contribution in helping the team make it into the series.
• Many divorces occur in "community-property" states, where the husband and wife are entitled to equal shares. If the law in those states did not recognize that they are entitled to equal shares, divorces in those states would be much more complicated.

Splitting the difference is equal. It may be a fast way to reach an agreement. But it may not be equitable or fair.

I know a buyer who does well using the split approach. He makes a low starting offer, raises it only slightly, and then says, "Okay, let's split the difference." The buyer knows that it's hard for a salesperson to say no to such a reasonable request. The salesperson who gets sucked into the split finds he or she is giving too much away. Of course, if the difference is small, the salesperson would have good reason to go along.

The next time somebody says, "Let's split the difference," try saying, "No, you can't. Here's why." You will be surprised at how often you get more than half.