Tweet

Trading Concessions

Written by: Nikki Owen

Article Overview: A Win-Win negotiation can only be achieved if both parties are prepared to concede some of their ‘would like to have's’ in favour of preserving their ‘must have's’. The way concessions are handled is a vitally important negotiating skill and can have a huge impact on the final result. Below are 10 Top Tactics to help you:

Trading Concessions

1. Discover and agree all the points for negotiation before it begins. Ensure that for each one of these points you have identified whether it is a fixed or a variable point from your perspective. (Variable means that there is some flexibility of movement.) If you have a separate meeting scheduled for your negotiation, it’s a good practice to send out you points for negotiation prior to your meeting. This ensures that both parties aren’t presented with any sudden surprises.

2. Increase the number of points for negotiation (if possible) because you increase the opportunities for a trade. If you only negotiate on price you are potentially setting the stage for a Win-Lose outcome. People very rarely buy on price alone, which is why it’s important to do a through fact find at the beginning of the sales process, to flush out the buyer’s list of requirements.

3. Always trade concessions (as opposed to giving them away). This means that for each point where you agree to a concession, you’ll want the buyer to make a concession in return. If you give a concession without requesting a return concession then you’ll be unlikely to get one afterwards. Therefore, it helps to preface your concession with the words ‘what if’. For example, "What if I offered you this (specify concession), what could you offer me in return?" As soon as you begin the process of trading concessions, you are creating a frame for agreement, this underpins the belief that together you can reach an overall agreement.

4. Make concessions in small incremental amounts, gradually. If you offer up a large concession too quickly you could create the perception that ‘you loaded the deal’. It’s always best to aim to hold something in reserve for those buyers that are tougher with their negotiations and present every concession as if it has huge value to you. When presenting concessions, use features and benefits to really highlight the value that you are offering.

5. If the price changes, change the deal. This can help to maintain your credibility and justifies the reason for the price change. If you simply comply with a request to lower your prices then you imply that you were asking too much originally.

6. Use a calculator to quantify the impact of price decreases overall. For example, a couple of cents or euros on a large deal could equate to a huge amount over a 12 month period. This can be useful to show just how much you are offering in the long term. It’s a good idea to calculate the long-term value of every concession you are offering.

7. It can be disadvantageous to have your opening offer completely disregarded so encourage the buyer to go first with their offer if you can. Sometimes the buyer offers more than the sales person was prepared to accept, yet avoids having to do so because they kept quiet and let the seller go first. It also provides you with the opportunity to evaluate their opening stance in terms of the possibility of getting an overall result. If their opening offer is ridiculously low then, then they may not be taking the negotiation as seriously as you.

8. Make each concession really count. People have a tendency to appreciate what they have worked hard to get. If the winning of a concession is too easy then you are depriving the buyer of some emotional satisfaction. This is also an ideal time to request the opportunity to consult with another individual within your organisation. If the buyer sees that their requested concession appears to be outside of your own authority limits then this helps to build the case that they have negotiated well.

9. Be creative when generating concessions. Work with the other party to generate a variety of options and brainstorm each option neutrally. You’ll be amazed at how many good ideas are created when this process is allowed to occur. You can help this process prior to the negotiation by seeking input and ideas from other people in your organisation. Often, getting some alternative suggestions from people who are not involved in the deal can provide you with some refreshing new insights.

10. Leave price until last so you build a sense of agreement between both parties. Aim to discover what the buyer really needs when they request a particular price. At the end of a negotiation, the buyer has made an investment of time and has demonstrated a desire to do business with you by making concessions. Therefore, to reach a stalemate at this final stage will be viewed as a waste of their time. Before tackling the price, summarise all the concessions that you have made and where possible attach a value to them. This amount can look even more impressive if you total this over a 12 month period. Always have a list of the buyers agreed requirements in front of you so that you can show the buyer just how many of their requirements you have already met.

Related Articles
  Implications of the New Agreement for Africa’s Export Trade
  Discounting: DON\'T DO IT !!!
  If You're So Dumb, Why Aren't You Rich? Part II
  8 STEPS TO GET LEANER IN A TOUGH ECONOMY!
  Mentoring, An Essential Part Of Forex Success

Article Tags: belief that, concession, concessions, flexibility, negotiation, negotiations, outcome people, perception, perspective, preface, price changes, surprises, variable point



Related Forum Posts
Re: 10 ideas to make you money in 2010 - I think Education would be hard to break into. Baby Boomers, Life Support and Trading Down, however, seem like good markets. As for Green technology goes, I don't think the business has to be entirely based on Green ideologies, but rather a business that embrace Green philosophies and use that as a marketing tool.
Keywords - Keywords in your URL are good, but you also need to include these in headings on your pages. If you were going to search Google for this content, what words would you use? What common words would people use in a search engine if they wanted to find your site? You don't need to overdo the headers, just add a couple to each page and especially on your home page to attract search engines. I think someone also mentioned listing your site in directories. This is good and make sure to list your site under beauty - this should attract people that want to find you. Trading links with sites is good and especially sites that attract the people you want to bring onto your site. Miss Shri
Re: Investor needed to Generate Wealth in the Market - I actually have a partner that trades Forex. He went through a lot of classes and learned a great deal on charting and technical analysis. I use similar charts that he uses and the concept is almost the same. I just prefer to trade stocks over $5 dollars in the major exchanges, mainly the s&p 500. You get familiar with certain specialist on each stock and the stocks in the s&p500 only have one specialist per stock. So you get familiar with how they like to set their price. There are also variables in the market that allows you to trade with the best possible outcome of making money if you know what effects what. I think an average of 15% return on investment a month is pretty good. I have pulled 180% in a little over 2 months before. The market corrects itself about 3 to 4 times a year, this is were I make most of my money. Making 50% or more during the times of these market corrections is not hard to do at all. If you are making more then 15% a month on average then keep doing what your doing. Im sure any investor out their wouldnt mind making as little as 3% a month on his/hers money. Well im willing to paper trade with any investors that are serious before any commitments are made. I appreciate the advice. Happy Trading
The Game Inventor's Guidebook - by Brian Tinsman, 2002 I checked this out of my local library today and its pretty interesting... didn't address what I wanted to know, which was how to actually design an online gaming system (indeed this doesn't cover online games at all), but for board games etc. it's pretty good. Here's the TOC: 1. How they diid it: Trivial Pursuit Magic, the Gathering Dungeons & Dragons Pokemon Trading Card Game Interview with an inventor Interview with a publisher 2. How the industry works 1. What's in it for you 2. How new games happen 3. Anatomy of a publisher 4. Markets for games 3. Games and companies you should know 1. Mass market games you should know 2. Mass market companies you should know 3. Hobby games you should know 4. Hobby companies you should know 5. American specialty games and companies you should know 6. European specialty games and companies you should know 4. Self publishing 1. What am I getting into 2. Before you print 3. After you print 5. Selling a game step by step 1. How to invent a game 2. Game design 3. Game development 4. Targeting publishers 5. Before you submit 6. Eight submission strategies 7. Contacting publishers 8. Protecting your property 9. What to do if they don't say yes 10. What to do if they do say yes! 11. The game industry's dirty little secret 6. Resources and examples Publishers and mnufacturers Distributors Brokers Game conventions and trade shows Industry publications Sample query letter Sample record of disclosure Sample licensing agreement Sample option agreement


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Top 5 Tips for Better Online Ads

Leader's Success Secret: Celebration

Why Small Businesses Don't Survive

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.