We recently shared with you our Top 7 Tips for Creating the Ultimate Wishlist.
The flipside of developing an effective wish list –and just as important-is coming prepared to any negotiation with a well-considered concession list. It’s not that different in principle: it just means adjusting your perspective to that of the party with whom you are going to be negotiating.
Our definition of Negotiation is:
“The process by which parties in conflict adjust their positions by trading issues of lesser importance in exchange for issues of greater importance because the agreement must be implemented by all parties.”
Therefore, it is important in a negotiation not only to try to achieve an outcome that works for you, but also for the other party. You must ‘give’ to ‘get’ and, by creating a concession list for trading purposes, you are able to be more efficient and agile at the table.
With this in mind, here are our top 5 tips for creating a solid negotiation concession list:
1. Think ahead
Whilst you are in the midst of a negotiation, it is very difficult to be spontaneously creative in coming up with variables that may be of value to the other party to trade into the deal, in order to attain what you want. By preparing a useful list of concessions well before the negotiation commences, you are saved the difficulty of having to produce them under pressure, and have the added benefit of not having to ‘reinvent the wheel’ for similar future negotiations.
2. Brainstorm as a team to create a concession list
Gather your team and utilise their joint creative energy to brainstorm concession items which may be of value to the other party. This will give you flexibility at the table. If you establish a varied and creative list you will have more variables you could trade into the deal when you potentially reach deadlock on items that are important to you. A great way to test a concession item to get what you want is to use the OPEN DOOR TECHNIQUE: “Just suppose we would be able to concede on X, would they then be willing to provide us with Y?”
3. Ask for input from other parts of the company
Probe whether other departments within your organisation such as Logistics, Legal or Finance could offer items to add to your concession list. Would it benefit the other party for you to adjust their payment terms or invoicing frequency? Reduce legal risk by removing a clause from their standard agreement? Vary the delivery schedule? These are often relevant concession list items which would cost your wider team little,and that may be of interest to the other party.
4. Value your concessions
How should you value potential concession list items? We teach that you put the value of the concession in the other party’s terms rather than your own. You may, as a business or an organisation, be able to provide additional services or terms that are quite easy and of low cost for you to concede. Value your concessions as to how much it would mean for the other party to have them. You can then put the relevant price on that concession-based on the value by which they would perceive it- to derive an equivalent value in return for your organisation.
5. Lengthy concession lists are good
Developing a long concession list will provide you with items of different values, shaped by what you may need. This will enhance your trading agility at the table so that you achieve more of what you want from the deal. For example, you may have an important variable on which you would like agreement. You can then offer an item that you think would be important to them in order to create their willingness to give you what you are after, in return. Long concession lists are also critical if you are employing the OUT OF BOUNDS TECHNIQUE. This is where you have a “sticky” non-negotiable item that you need to get across the line. You can highlight that you are inflexible on this item, but that you can be flexible on a mix of A, B, C, D, E and F. This will give you a greater chance of achieving acceptance from the other party on that “sticky” item. However you must have a long concession list ready in order to deploy this technique.
In summary, negotiating is about ‘giving’ to ‘get’, and having a long concession list that is valued in the other party’s terms will give you a greater chance of achieving more of what you want, more quickly, whilst maintaining the relationships involved.
Happy negotiating,
Tyler