Strategy
8 min read

Win Every Negotiation with a Concession Making Strategy

Know the secrets of winning negotiations with a concession-making strategy. See how top negotiators close deals effortlessly!
Written by
Samruddhi
Published on
September 24, 2024

Did you know that 83% of skilled negotiators say that effective concession-making is key to closing deals successfully?

In this guide, you’ll learn how to win every negotiation with strategic concessions and negotiation strategies, ensuring you always leave the table with a victory.

What is Concession Making?

What is Concession Making?
What is Concession Making?

Concession making is when you agree to give something up during a negotiation. It could be a small change to your demands or an adjustment to reach a mutually beneficial agreement.

Skilled negotiators use small concessions to build trust and create win-win solutions with the other party. For example, you might agree to lower your price a little, hoping the other side will accept your offer.


How to Develop a Strategy for Making Concessions

How to Develop a Strategy for Making Concessions
How to Develop a Strategy for Making Concessions

1. Start with Contingent Concessions to Build Trust

Offer Contingent concessions when you agree to make a concession if the other party also gives something in return. This method helps keep the negotiation balanced and fosters a win-win compromise solution. For instance:

  • You might offer a lower price, but only if they agree to a larger contract.
  • You could speed up delivery, but only if they offer better terms on payment.

Why this works:

Contingent concessions show that you're willing to cooperate, but only if the other side meets you halfway. This approach builds trust and keeps you from conceding too much too soon.

Here’s how:

  • Always tie your concession to a benefit for your side. This keeps the negotiation fair and ensures you don't weaken your position.
  • Use contingent concessions early to open up the dialogue and set the tone for collaboration.

Your opening offer should be strong enough to allow room for a few concessions later in the negotiation.


2. Understand the Priorities of the Other Party

Once negotiations begin, it’s crucial to observe the other party’s behavior and adjust your strategy accordingly. Offering a concession at the right time can alter perceptions of you on the other party.

Knowing what matters most to the other side is crucial. When you understand their priorities, you can make concessions or can offer concessions that matter to them without hurting your goals. For example:

  • If price is their biggest concern, consider offering a small price reduction in exchange for longer delivery times.
  • If they need faster service, offer quicker turnarounds but ask for a commitment on future negotiations.

How this helps:

By aligning initial demands and your concessions with what the other party values, you’re more likely to close the deal. It also shows that you are considerate of their needs, which can lead to a more positive relationship.

Here’s how:

  • Start by asking them directly about their top concerns. This could be pricing, timelines, or additional services.
  • Use this information to offer concessions that meet their needs without undermining your position.

3. Save Major Negotiation Concessions for the Final Agreement

Major concessions are significant changes in your offer that can make a big difference in the final deal. You should save these concessions for the last stages of the negotiation.

For example, if you're negotiating the price of a service, don't lower it too early. Keep that as a final move when you're close to reaching an agreement.

Here’s how:

  • Start with smaller concessions like adjusting timelines or small product features.
  • When the other party feels they’re getting close to a deal, offer your bigger concessions, such as pricing flexibility. This keeps you in control and helps seal the deal.

Each concession brings you closer to a potential agreement that satisfies both parties.


4. Quantify and Clarify Each Concession

When making concessions, it’s important to be clear about what you're offering. Don’t leave room for confusion. Quantifying means you assign a clear value or condition to your concession.

For instance, if you’re offering a discount, state exactly how much the discount will be and under what conditions.

Here’s how:

  • Clearly state the value of each concession. For example, say, "I’m offering a 10% discount if the agreement is signed today."
  • Clarify what you expect in return. For example, "In exchange for this discount, I would need a commitment to future negotiations."

By quantifying and clarifying the possible concessions made, you maintain transparency and avoid misunderstandings, ensuring a smoother negotiation process.


5. Prioritize Low-Cost, High-Value Concessions

What are low-cost, high-value concessions? These are things that don't cost you much but offer great value to the other party.

For example, you might offer extra services that don't take much effort on your part but mean a lot to them. This way, you appear flexible without losing anything significant.

Why this works:

By focusing on making strategic concessions that don’t hurt you but mean a lot to the other party, you build trust and move the negotiation closer to a deal. This shows you’re willing to give but in a way that maintains your overall position.

Here’s how:

  • Identify concessions that are easy for you to give but valuable to the other side. For instance, you could offer faster delivery or an extended warranty at little or no additional cost.
  • Think about what the other party really needs. If they're focused on getting a quick deal, offering speed might be a low-cost concession for you.

6. Link Concessions to Reciprocity

Reciprocity means giving something in return. When you make a concession, make sure you’re getting something back from the other party. This way, you don’t lose out by giving too much.

A reciprocal concession is when both parties agree to give something in return, keeping the deal balanced.

For example, if you agree to lower the price, ask for a commitment to future negotiations or a larger order.

Why this works:

Linking your concessions in negotiation to reciprocity ensures the negotiation remains balanced. You avoid giving away too much without getting something in return, keeping the relationship mutually beneficial.

Here’s how:

  • When you offer a concession, immediately ask for something in return. For example, say, "I can lower the price by 5%, but in return, I’d like to discuss an extended contract."
  • Make sure each concession is clearly linked to a gain for your side. This way, both parties feel like they’re moving toward a fair agreement.

7. Set Limits on Your Concessions

When making concessions, it's essential to set clear limits. You don't want to keep giving up too much, or you’ll weaken your position. By setting limits, you show the other party that there are boundaries, and they won’t expect endless unilateral concessions from you.

Why this works:

Setting limits on your concessions signals to the other parties involved in party that you’re serious and have firm boundaries. It keeps the negotiation fair and prevents you from giving away too much.

Here’s how:

  • Decide on the maximum amount you’re willing to concede before entering the negotiation. For example, set a firm limit on how much you’re willing to lower your price.
  • Let the other party know you’ve reached your limit politely but clearly. You might say, “I can’t go any lower than this price, but I’m confident we can still make a deal based on what’s already on the table.”

8. Use Concessions to Signal the End of Negotiations

Concessions can be used as a signal that you’re ready to close the deal. When you offer your final concession, make it clear that this is a unilateral concession from the last one. This helps the other party understand that you’ve reached the end of the negotiation process.

Why this works:

Using a final concession strategy signals that the negotiation is wrapping up. It gives the other party a clear choice — they can accept the deal or walk away. This tactic helps create a sense of urgency and encourages them to finalize the agreement.

Here’s how:

  • Save a meaningful concession for the end. For example, you could offer a small discount or additional service, but make it clear this is the final offer.
  • State your position firmly. For example, say, “I’m willing to offer this last concession to close the deal, but this is my final offer.”

How to Handle Hardball Negotiators

How to Handle Hardball Negotiators
How to Handle Hardball Negotiators

1. Stay Calm and Avoid Emotional Reactions

When facing a hardball negotiator, staying calm is key. They might use tactics to upset or frustrate you, hoping you'll make a mistake or give in. Don’t let emotions get the better of you. Take a deep breath, listen carefully, and think before responding.

Here’s how:

  • Keep your tone and body language neutral. Don’t let them see if they’re getting to you.
  • Take a moment to pause before answering. This can help you gather your thoughts and avoid saying something you’ll regret.
  • Remind yourself that staying calm helps you stay in control of the negotiation.

Good conflict management during negotiations helps you keep control when concessions are being discussed.


2. Counter with Objective Data and Facts

Hardball negotiators often use pressure, but facts are your best defense. Instead of arguing emotionally, present clear, objective data to back up your position. This shows that your stance isn’t just opinion—it’s based on solid facts.

Here’s how:

  • Use numbers, statistics, or examples to support your points. For example, if they’re pushing for a lower price, show market data that proves your offer is fair.
  • Keep the conversation focused on facts. If they try to steer the conversation away from data, politely bring it back.
  • Prepare your facts in advance. Know your numbers and be ready to explain why your offer makes sense.

3. Respond with Silence to Pressure Tactics

One powerful response to hardball tactics is silence. When someone is pressuring you, staying silent can make them uncomfortable. They might expect you to react quickly or give in to their demands. But silence can shift the power back to you.

Here’s how:

  • When they apply pressure, don’t feel the need to answer right away. A pause shows you’re not easily rattled.
  • Let them fill the silence. Often, they might reveal more information or change their stance when you give them room to talk.
  • Stay calm and confident, even if they try to rush you. Silence can be a tool that makes them rethink their approach.

4. Identify and Exploit Their Weak Points

Hardball negotiators might seem strong, but everyone has weak points. Identifying these can give you the upper hand. Once you understand their vulnerabilities, you can use them to your advantage.

Here’s how:

  • Listen carefully to what they say. Look for any signs of urgency or something they need to resolve quickly.
  • Ask open-ended questions. This can reveal what’s most important to them or what they’re worried about.
  • Use their weak points strategically. If they need a fast deal, you can take your time to get a better offer. If price is their main concern, offer a service or bonus that costs you little but adds value to them.

Conclusion

Concession making is a key strategy in negotiations. By understanding when to give and when to hold firm, you can manage concessions and create agreements that benefit both sides. The goal of any negotiation is to create a win-win solution where both parties benefit. Use these techniques to improve your next negotiation and build strong, lasting partnerships.

What is Alore?

Email Warmer

Generate real engagement to Warm Up Your Email Address without any human intervention

Drip Campaigner

Send emails that generate new business opprotunities for you

Collaborative Inbox

Improve team performance & customer experience - manage multiple email addresses from one place