The right moves

Strategies for giving and getting concessions

Negotiation

As a young sales professional, I mistakenly thought that closing profitable sales made me a skilled negotiator.

Reality struck when my sales territory expanded to include New York and New Jersey. After a month of meeting my new clients, I hadn’t made a single sale. Desperate for help, I reached out to the VP of sales to discuss my situation. That conversation changed my business life.

One of my key takeaways was realizing how every move I made during a negotiation conditioned the other party how to negotiate with me. For example, if I “caved in” when they became aggressive, I taught them that pressure was my weakness. If, on the other hand, I offered options to their concession demands, they learned to talk through different scenarios so we could find a mutually agreeable solution.   

Most people don’t enjoy negotiating. For them, the tension of the give and take can be overwhelming. I’ve heard some people describe the give-and-take experience as “a war zone” when, in fact, it is an adventure of discovery.

To transform feelings of intimidation and overwhelm to curiosity, become familiar with concession strategies and practice using them. To get you started, I’ve listed five strategies below that people often overlook that are easy to implement:   

  1. Try to determine all demands before you make a concession. When the other party demands a concession from you, simply ask, “In addition to X, what else is important to you?” This will reveal their list of concessions so you can decide how best to work through the demands. You may have to ask the question several times before you get all of the items on their list.
  2. Keep concessions small, make them slowly, and make each concession progressively slower. This will give the other party the impression that you are close to reaching your bottom line.
  3. The best time to get a concession is when you give one. When you are asked to make a concession, simply say, “If the possibility to provide you with X exists, can you provide Y?” This will force the other party to re-assess if their concession request is important enough that they are willing to give something up. 
    This strategy ties nicely to No. 2 above. Simply stated: “Never make a concession without getting something in return.”
  4. Avoid a pattern when making concessions. Don’t be predictable. When you do the same thing over and over, it becomes a pattern that makes it easy for the other party to leverage. You don’t want the other party to know your next move. 
  5. Split the difference. It’s best to refrain from splitting the difference unless it works in your favor. For example, let’s say that you are the supplier who charges $100 for a particular product. Through a series of concession demands, the customer has gotten you to reduce your cost from $100 to $87. 
    When you meet to sign the contract, the other party starts out by saying, “Our VP won’t approve this. He said that we need to be at $80 to close the deal but I told him that I felt that was unreasonable. He said if we split the difference, I can sign the agreement.” Don’t do it! The buyer is gaining another $3.50 while not giving anything up. 
    Your best response is to say, “Unfortunately, if we start playing with the numbers at this point, I’ll be forced to start from the beginning which means we start from $100.  Please let me know how you would like to proceed.” Typically, they back down.

With any negotiation, you want to begin by defining your needs (must haves) and your wants (wish list). This makes it easy to focus on what is most important to you about the outcome of the negotiation because when your needs are met, you win! If you secure nothing else, it doesn’t matter because you secured what you needed.

As part of the preparation process, after you define your needs and wants, anticipate potential situations that may unfold and prepare accordingly. The insights that you gain and the strategies that you develop prior to the actual negotiation will help you to remain confident, calm and centered during the negotiation. This step alone could prevent you from making a false move or becoming overwhelmed.

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Christine McMahon
Christine McMahon helps leaders develop strategies and improve speed of execution by developing leadership talent, creating alignment between business functions and improving communications and accountability up, down and across a business. She is co-founder of the Leadership Institute and is in partnership with the WMEP. For keynote presentations, executive coaching, sales and leadership training, she can be reached at: ccm@christinemcmahon.com.

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