Key Considerations in Making Concessions Remember: Every

behavior communicates. This is especially true with concessions. Because concessions are essential to
negotiating, there are some key considerations in planning for and in making concessions:
What will the other party infer from my concession? Will they perceive me as
giving in or rolling over? Will they infer that I asked for too much in my opening position and, therefore,
I might be willing to make an early concession just to keep them at the table?When should I make a
concession? If I am the first to make a move, will they assume Im more flexible? Dont make a
concession until both opening positions are out. The other party may try to get you to make an early
concession by responding harshly to your opening with a statement like, Youve got to be kidding!
Thats just not acceptable. Instead of conceding anything, ask What is your position?How much (or
what size) of a concession should I make? Depending on your planning, you might start with a small
concession and see if the other party makes a move. Imagine the signal sent when you make an initial
large concession. The other party might believe your opening was far too high, and continue to move for
more concessions. If you make smaller and smaller concessions (or stop making them), the other party
could perceive that you are at the limit of your concessions and thus might be forced to offer some
movement.What is the cost/value ratio of the concession? What will this concession cost me versus the
perceived value to the other party? Do they perceive the value of what Im offering? A common mistake
salespeople make in negotiating involves not knowing the true street value of what theyre offering.
Ask yourself the question: What would it cost them (other side) to purchase this separately, or from
another supplier? As an example, consider technical support. Most companies have technicians on the
staff whose job it is to help customers in the implementation phase. The salesperson may blithely give
away this service without realizing the value to the customer. Most companies say that technical
support is worth $250 to $500 per hour.What can I receive for making the concession? Before offering a
concession, ask yourself: If I move on price, are they willing to increase the volume commitment, or
extend the length of the contract? Some currencies are interrelated. Pricing is often tied to volume and
length of the contract. One way to look at this is by imagining a triangle (Figure 4.1).
Figure 4.1. Triangle