Mismanaging concessions can cause you to give away the store if you give too many or give important ones up front. If too stingy with concessions, on the other hand, you may not get the concessions you seek, or may fail in the negotiation altogether. Here, we’ll examine some specific mistakes that may cause your concessions to fall short of your goals.
When you sit down to prepare for the negotiation, you should not only “see” the deal but also “see” some of the details. This means doing some open-ended thinking about possible concessions. Write down the possibilities, large and small, that might be used at various points in the negotiation. Make sure you and your team are clear on which ones are the major pieces and which are the minor pawns in the game.
Evaluate the Competition!
With today’s real-time access to information, it’s easy to find and evaluate possible concessions. You have easy access to your own company’s product offerings, shipping charges, and so forth, but you may be able to find out those of your competitors at the click of a mouse. Preparation includes evaluating the best set of concessions and the up-to-the-minute price, cost, and value of each. Chances are, your competition can arm you with all the information you need.
There’s no need to feel greedy or afraid to ask for something you think the other party views as trivial. You never know what your counterpart will be willing to agree to. If you didn’t ask for minor concessions you could have gotten, you’ll probably regret it later. Aim high. Even if you think you’re aiming too high, your goals might not seem to be as ambitious to your counterparty as they do to you.
When it’s your turn to make concessions, one of the most common mistakes is to think that the counterparty values what you’re offering the same way you do. You’ll inevitably under-concede or over-concede. Where you can, try to figure out how the concession fits into their business model. If they operate a “just in time” manufacturing line, you’ll know immediately that in all likelihood expedited shipping is a concession of real value to them.
Again the best path is to prepare before the negotiation, and keep preparing during the negotiation by working to understand their business better during the conversation. You’ll learn what makes them tick and what has the most (and least) value to them. That will help you make the right—and the fairest—offer.
Remember—when making concessions, always ask for something in return. And remember, timing can be everything.
You might think it to be a good gesture to give away something because you figure you can ask for something in return later. Problem is, the later never really happens, or you feel compelled to give away something else when it comes. If you haven’t been keeping track of concessions, you’ll fail to see what you’ve given away and what you’ve received. You may also have to backtrack and re-evaluate the issues under discussion at the time you originally gave up the concession.
Get It in Writing
Always keep track of key points, decisions, and concessions in a negotiation. It will help you track what’s happened, what’s been given and received, and what further actions are necessary. Like a court record, written documentation provides a handy reference for everyone involved, and it makes drawing up an agreement a heck of a lot easier.