Concessions are an inevitable part of every negotiation. However, moving a negotiation to a satisfactory close is almost always going to require a series of concessions.
Ultimately, your ability to make concessions will determine if all of your hard work during the negotiation will get you the result you need. However, knowing when to concede can be a conundrum for many people. On one hand, you may feel as if you’re being too firm or rigid in your demands or trades, and that the ensuing impasses are difficult to navigate. On the other hand, you may fear that every concession means less of a win for you in the end.
Going into a negotiation without a concession plan to achieve the best possible outcome is like going into a sword fight blindfolded. The most skilled negotiators not only recognize the need for a concession plan but are also intimately aware of the five concession patterns that come about in negotiations.
The 5 Concessions Patterns:
Some concession patterns work better than and are inherently more effective than others, but you must know all of them to be able to successfully navigate the majority of negotiations requiring strategic concessions.
Pattern #1: “I’m over-eager. Take it or leave it.”
- You are trying to “win the business” in one try.
- After that, you will frustrate the other party.
Now, let’s assume we make the same concession, but with a much different impact. In Pattern #1, we give it all away at the beginning and concede nothing after that. We affectionately refer to this as “The Sucker” pattern because it looks like a sucker or a lollipop.
However, it still sends the wrong signal. A big concession upfront, and then nothing? This can be incredibly frustrating for the other party. Unfortunately, this is a pattern that many negotiators use to close the deal.
Pattern #2: “I’m inflexible. I am not willing to negotiate.”
- No “give and take.”
- Hardball negotiator.
- This negotiation could break down.
Now, this pattern is the exact opposite of Pattern #1. For example, let’s say I state my opening demand but make no concession. Then a while later when the other party offers a concession, I do reiterate my opening demand and offer nothing in return. Then again, at a later point, I repeat my opening demand and concede nothing. Then finally, at the very end, I concede everything all at once. This pattern is referred to as “The Wrecking Ball”.
Doing this may fulfill the other party’s initial concession requests, but you run the risk of angering and confusing the other negotiator, who would conclude that you were inflexible and not willing to negotiate.
Pattern #3: “If you hang in there, you can get it free.”
- Motivates the other party to keep pushing.
- Even if he/she gets a lot from you, the other party may still feel unhappy that he/she didn’t get more.
- He/She may wonder if it’s some kind of game.
- He/She will certainly want to drag you into round 5.
Now let’s continue to assume the concessions add up to the same amount as the previous examples. Pattern #3 differs in the message being sent.
We call Pattern #3 “The Avalanche” because it keeps getting bigger and bigger as it rolls along. With this pattern, another negotiator will inevitably conclude, “If I just hang in there, I’m going to get everything I want for free.” This pattern encourages the other party to keep pushing for more, and more, and that would prolong the negotiation, and lessen my chances of making a good deal.
Pattern #4: “I am willing to negotiate and concede some, but have a bottom line.”
- Give enough of a concession to show good faith.
- Send the message that you’re getting to the limits of your flexibility by diminishing concessions as you approach closure.
Send the message that you’re getting to the limits of your flexibility by diminishing concessions as you approach closure.
We call this one the “Ice Cream Cone.” Pattern #4 gives us a very different picture. The big concession upfront shows a willingness to negotiate, but as the concessions get smaller, it’s sending the message, “I’m reaching my limits.” Our negotiator is testing the waters, holding firm, refusing to make an initial concession until he/she tests the other party’s resolve.
These last two patterns – with shrinking concessions – send a very similar message. It says, “We’re getting to the limits of my flexibility, but I’m doing everything I can to make this work for you.”
Pattern #5: “I am serious about my proposal, yet willing to concede some. However, I have a bottom line.”
- Initially, hold firm to test the other party’s resolve.
- Give a concession as necessary to keep making progress.
Pattern #5 is the most mature of the bunch. We refer to it as “The Martini.” This pattern means holding firm, then decreasing the size of your concessions as the negotiation progresses. This reminds the other party that, “We’re getting to the limits of my flexibility.”
Also, Pattern #5 differs from the other patterns in that it asks the other party to ante up as well, and if and when you make a concession, make sure you get something in return.
Finally, concede slowly and reluctantly, and remember to only make a concession if it is absolutely necessary to keep the deal moving. When you do these things, you accomplish the other goal of making the other party feel better about the agreement you’ve negotiated because they’ve had to work for it as well.
At the end of a negotiation, and this is particularly important in developing a long-term relationship that leads to more productive negotiations in the future, both parties must feel that something has been earned throughout the course of a negotiation.
Negotiators that rush the process and want to concede everything upfront end up diminishing the value of their position, as well as potentially leaving a ton of value on the table. Expert negotiators are able to master the art of conceding, and for every concession they make, they push the momentum towards a finalizing the deal while also collecting valuable concessions from the other party.
RED BEAR Negotiation Company is a global performance improvement firm dedicated to maximizing the profitability of the agreements negotiated with suppliers, customers, partners, and colleagues. If you’re interested in enhancing the performance of the negotiators in your organization, click here for more information on RED BEAR’s solutions.