Negotiation Concessions — 5 Strategies to Maximize Deal Results

The art of using negotiation concessions is a skill that sometimes takes years to master. Getting two people together to discuss a common issue is already challenging enough, but to get two people to listen and finally agree on a concession is herculean, to say the least.

For this article, we are going to define what negotiation concession is, how it can be applied towards negotiations when to use and not use it, and the advantages and disadvantages of this negotiation style. 

After reading through the article and our examples, using negotiation concessions should be easier for you. Also, you’ll be able to identify if and when the other party is using concessions and how to turn it around for your advantage.

I have created a free-to-download editable in-negotiation toolkit template. It’s a PowerPoint file that can help you create the best approach when negotiating with other parties. I even created a video where I’ll explain how you can use this template.

Negotiation Concession– What is it?

For a seasoned negotiator, a negotiation concession is a tool that brings both parties to the negotiating table together. 

Simply put, you or the other party can make or suggest concessions to bring one or the other to a common ground. Think of it as something that can hold two minds into one temporarily to gauge each other. 

It is safe to say that negotiation concession is a fairly common sight during a negotiation itself. 

Negotiation Concession– When to Use It?

In the hands of a master negotiator, the application of a concession strategy in negotiation provides great impact during the negotiation itself. When used properly, you will uncover important information about the other party. 

Important information may include the interests of the other party, their resistance point, their budget allocation, and any costs associated with the negotiation.

As such, a good time to use concessions would be:

• When you want to gauge the other party’s negotiation strength.
• When you want to assess how much budget the other party has. 
• When you don’t want to alienate the other party during the negotiation.
• When you want to bring back your position to the negotiation table.

Negotiation Concession– When Not to Use it?

Just like any strategy, there will be times when you have to use a negotiation concession sparingly. 

• Giving out too few concessions during the negotiation table will present you as a hardball negotiator and this will ultimately alienate the other party.
• Meanwhile, giving out fewer but bigger demands for concessions will surely anger the other party. 
• Lastly, avoid giving premature concessions during the negotiation. A good note about this is when you already gave a negotiation concession and then you give another one before the other party gives out their counter concession.

Real-life Examples From My Experience in Using Negotiation Concessions

In my years as a negotiator, I always tried to make my proposals conditional. This is important for two reasons:

1. By doing so, you will get something back for your offer
2. By making variables conditional, you will never give something ‘away’ unintended

When considering a conditional proposal, try to avoid introducing more than three items at once. It can prove difficult for the other party to respond or calculate at once in a meaningful way. It also slows down any momentum created. If you factor in every conditional proposal prepared all at once, you are more likely to draw a delayed response from the other party for three reasons:

• Your negotiation counterpart may find it incredibly difficult under pressure to calculate what it all means. Thus, they are more likely to pick off the terms they do like while ignoring the conditions attached to them.
• They will have some ideas that you want to think about first before tabling your entire position.
• They are left without the task of working out links or connections between each conditional proposal, which will probably confuse them even further.

The approach of gradually tabling your proposals and allowing the deal to build requires a lot of patience and a certain degree of comfort with the early ambiguity. Before making any proposals check your and your counterparts’ priorities one last time. Priorities can change at the last minute, so always make sure that you update priorities when it needs changing. Remember, where there is complexity, you’ll need to park elements and return to them later after examining some of the other agendas first. Having a record of proposals will help you negotiate more efficiently.

The Cons of Negotiation Concession

Because a negotiation concession is often used during a negotiation, there are also several disadvantages to its use. Some of its disadvantages are the following:

• Negotiators tend to over-rely on negotiation concessions.
• Sometimes, negotiation concessions are used as a means to end a negotiation swiftly.
• When used incorrectly, a negotiation concession can cause harm to your party especially if the concession is considered a loss.
• A negotiation concession must sound sincere so if you don’t have that particular tone of voice or stance, you may have a hard time using it.

The Pros of Negotiation Concession

Being able to handle a negotiation tradeoff without problems is a very powerful skill. This is why as a professional negotiator, it is one of the first few skills that you need to master before everything else.

Some of the advantages that a negotiation concession can bring during negotiations are as follows:

• A negotiation concession sets the tempo of the negotiation itself and can evoke or alter emotions or perceptions.
• A concession is sometimes seen as an act of good faith from one party to the next.
• Being able to understand a concession gives you an edge at times with the other party.
• Employing a negotiation concession can also calm down both parties when negotiations are heating up.
• A negotiator who handles concessions perfectly is seen as an expert in negotiations.