When we enter into a negotiation, our goal is to get a deal that we can live with. We spend a lot of time thinking about what we want the other side to give us as a result of the negotiations. However, we also have to keep in mind that they are probably thinking the same things. What this means for us is that we need to start planning on what we are going to be willing to give up in order to get what we really want. These concessions are the things that are going to get us the deal that we want. We need to know how to go about making concessions in the right way.
Always Label Your Concessions
Skilled negotiators know that making strategic concessions during a negotiation at the right time can be an effective tactic in a negotiation. In a negotiation, don’t always assume that your actions will speak for themselves. The other side will be motivated to overlook, ignore, or downplay any concessions that you make. Why would they do this? Simple: they want to avoid the strong social obligation to reciprocate. As a result of this, it is going to be your responsibility to label your concessions and make them meaningful to the other party.
When it comes to labeling, there are a few rules for you to follow. First, let it be known to the other side that what you have given up (or what you have stopped demanding) is costly to you. By doing this, you clarify that a concession was, in fact, made. Second, you are going to want to emphasize the benefits to the other side. Research suggests that negotiators reciprocate concessions based on the benefits they receive, while they tend to ignore how much others are sacrificing. Third, don’t give up on your original demands too quickly. If the other side considers your first offer to be frivolous, then your willingness to move away from it will not be seen as concessionary behavior on your part. By contrast, your concessions will be more powerful when the other side views your initial demands as serious and reasonable. Accordingly, spend time legitimating your original offer to the other side and then use it as a reference point when labeling your concession.
You Need To Both Demand And Define Reciprocity
Labeling your concessions during a negotiation helps to trigger an obligation to reciprocate, but sometimes the other side will be slow to act on their obligation. To increase the likelihood that you get something in return for your concession, you need to try to explicitly – but diplomatically – demand their reciprocity. When you do this, you are going to want to achieve three goals. First, you’ll want to label the concession (“This isn’t easy for us, but we’ve made some adjustments …”). Second, you’ll want to tactfully demand reciprocity (“We expect that you are now in a better position to make some changes …”). Finally, it begins to define the precise form that reciprocity should take (“An extra month for each milestone… “). While each of these elements is critical, negotiators often overlook the need to define the reciprocity that they are looking for. Remember that no one on the other side understands what you value better than you do. If you don’t speak up during the negotiation, you’re going to get what the other side thinks you value or, worse, what is most convenient for them to give.
Make Sure That You Make Contingent Concessions
One hallmark of a good working relationship is that parties don’t spend time nickeling-and-diming each other for concessions. Rather, each side learns about the interests and concerns of the other and attempts to make good-faith efforts toward achieving joint gains. Unfortunately, while fostering such norms is desirable, it is not always possible during a negotiation. When trust is low or when you’re engaged in a one-shot negotiation, you should consider making what are called contingent concessions. A negotiation concession is considered to be contingent when you state that you can make it only if the other party agrees to make a specified concession in return. Contingent concessions are almost always risk-free for you. They allow you to signal to the other side that while you have room to make more concessions, it may be impossible for you to budge if reciprocity is not guaranteed. You need to keep in mind that an over-reliance on contingent concessions can interfere with building trust. If you demand immediate compensation every single time you make a concession, your behavior will be seen as being self-serving rather than oriented toward achieving mutual satisfaction.
What All Of This Means For You
During a negotiation, if we want to be able to reach a deal with the other side, then we are going to have to be willing to make concessions to them during the negotiation. However, if we don’t know how to go about making concessions, then all of the bargaining in the world won’t end up getting us the deal that we are looking for. As negotiators, we need to understand how to go about making concessions that will land us the deal that we want.
The first thing that we need to understand is that every time that we make a concession, we have to label it. The other side is going to want ignore that you’ve made a concession so that they don’t have to reciprocate it. You have to let the other side know what you’ve given up for them. When you make a concession, you are also going to want to make sure that you both demand and define what reciprocity is in this negotiation. Finally, if you have to you can make your concessions contingent on the other side making similar concessions.
Concessions are what is going to allow you to reach a deal in your next negotiation. However, how you go about striking those concessions is going to be very important. If you don’t know how to do this, then your time and efforts will be wasted. However, if you do know how to make a concession correctly, then you’ll be moving towards the deal that you want to reach each time that you make a concession.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™
Question For You: Do you think that you can ever take a concession back after you have made it?
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What We’ll Be Talking About Next Time
One of the biggest problems that any negotiator faces when they sit down at the negotiating table is that we are all affected by bias. We might like to think that we aren’t, but study after study has shown that we all are. What this means is that we need to understand that we may be affected by outside forces when we are negotiating and so we need to take steps to minimize their impact on us. Just exactly how can we go about doing this?