• Hot Deal

    Using Concessions to Make Better Deals

    Concessions are a necessary part of negotiation strategy. Few people like giving up things that they want, but in a business negotiation, letting go of less important benefits to make sure your top priorities are met is typically inevitable.

    Before approaching the bargaining table, you will want to determine and rank your possible concessions. Know which concessions will have the maximum value to your counterparty without sabotaging your top priorities. Once you have the items in mind, the trick is to deploy them carefully throughout the negotiation. 

    Time Your Concessions

    Your initial offer in a negotiation should be much higher than the agreement you are willing to settle for. This gives you room to make concessions as the negotiation continues, but be careful. Giving out concessions too quickly or slowly can send the wrong message to your counterparty. Give up too much too quickly and your counterparty may think you have more to offer them than you actually do. Refusal to make any large concessions can stall a negotiation entirely. 

    You don't need to make your first move right away. As you move towards an agreement, offer a significant concession, and be sure to label it. Your counterparty should know that you are offering them something that is valuable to you so they are motivated to offer something in return. 

    You generally want to start with a large concession and make smaller ones as you finalize the agreement. It's important that you let them make concessions as well or even suggest a trade. Giving up multiple concessions in a row without getting anything in return can cheapen your position. 

    Be Ready to Walk Away

    Eventually in a tough negotiation, you may hit the end of the concessions you can reasonably make. If they are still asking you to sacrifice more, it may be time to find a different supplier. Remember that the focus of the negotiation is to make a beneficial deal for your party. Reaching an agreement that's unfair to you is worse than no agreement at all. Not every negotiation can match your expectations and it's alright to walk away from a vendor who cannot meet your needs. 

    Prepare and study the contract carefully before making any final decisions. Are the concessions you made matched by reasonable concessions from your counterparty? Will the final agreement benefit you as well as your vendor? Pay attention to the contract’s presentation. A badly arranged contract can be misleading and looks unprofessional. 

    Be sure to convert JPG to PDF to check that you've evaluated the contract line by line. If you do agree to the contract, make sure it looks great when you present it to your counterparty.

    Use Concessions Wisely

    Concessions are an investment in the health of your final deal. If your vendor is not willing to meet that investment with one of their own, this may not be a beneficial partnership. You can influence the concessions your vendor offers by not rushing concessions and making the ones you do offer clear and measurable. 

    Join your local chamber of commerce today to network with your business community. 

     
    Contact Information
    Offer Valid: March 21, 2022March 31, 2024
    Cedar Park Chamber of Commerce