You often hear that someone in a negotiation
gave away a concession. It's an interesting phrase 'gave away' because
good negotiators, whether professional or amateur, rarely give away
concessions. Some, as a point of principle, never 'give away' a
concession. Someone with good negotiating skills 'trades' concessions.
By its very nature a concession – however easy it is for you to make or
however trivial it might seem to you – is worth something to the other
party. Therefore good negotiators put a value on that concession and
will exchange it, or trade it, for something they want in return.
Whenever you think about making a concession always ask yourself the
question – What am I getting in return?
What you get back will often depend on how much thought you put into
your preparation. Part of good preparation is to think through what you
might ask for in return for a concession. Also, be careful about how
you put a value on these concessions – both what you are doing for the
other party and what you are getting back. The ideal win-win concession
exchange in a negotiation is to trade something that costs you little
but is valuable to them in exchange for something of similar (or
greater?) value to you.
As an example, I once knew someone who traded
the low-cost hire of some old electronic test equipment in exchange for
a signature on a contract to buy a new system. The test equipment was
of little value to the seller and was just sitting in a store cupboard
waiting to go into a skip whereas hiring it cheaply was valuable to the
purchaser. Whilst the purchaser had the funds in the current year's
budget to buy the system he did not yet have funds to buy the test
equipment that would help him get the best from the new system. Hiring
(using revenue funds) cleared the way for the purchaser to buy the
system now, cleared out some valuable storage space for the seller and
saved him the cost of hiring a skip.
It is worthwhile thinking about just how you discuss making a
concession. If the other party is simply asking for something, say a
discount, you could make agreeing to that discount conditional on, say,
an increased order. If that is your thinking then you are about to make
a conditional offer. This can be done in two ways depending on whether
you state what you want in return first or second. Both approaches have
Putting your demand before your offer is often seen as forcing you to
think about what you want in return rather than gifting things away. If
you will increase your order by 1000 units then I might be able to look
at a discount of around 5%. Alternatively, putting your offer
before your demand is seen by some as putting the other party under
some social pressure to reciprocate and be as nice as you are being. I
might be able to offer a discount of around 5% if you can increase your
order by 1000 units.
In either case, one course of action is
conditional on the other. Do not let them believe that you have just
indicated that a 5% discount is feasible for the existing order. It may
be wise to open with a phrase such as: I cannot give you a discount
on the existing order but…
Notice that in these examples the offer is tentative but the demand is
precise. I might be able to… no firm commitment is made, but a
firm demand is… 1000 units. Of course, having said this the
other party is going to expect you to deliver on this idea – but,
importantly, that word might leaves you some room for manoeuvre
whereas the 1000 units attempts to pin them down. Naturally, as
the discussion progresses you will move to precision in both the offer
and the demand.
Let's sum up the important points about the negotiating skill of making
Finally, if other people negotiate on your behalf
then you should always ask for a report on how each negotiation has
gone. When you do this, push them to improve their negotiating skills
by asking them this question: What did you concede and what did you
get in return?
- Never give concessions, always trade them
for something back.
- What you are conceding is valuable to the
other party; how valuable?
- Make your demand something that is
worthwhile to you.
- Always make your concessions conditional:
If you will do this... then I might do that.
- Consider putting you demand before your
- Make your demand precise but leave some
room for manoeuvre in your offer.
- Before making your offer, rule out any
chance of it not being conditional on your demand.
Author: Tony Atherton
© Tony Atherton 2005, 2013 (For permission to reproduce this article
please write to Tony