You never get the deal you deserve, but the deal you negotiate. When leading two Mount Everest expeditions, I learnt very quickly that the ability to negotiate — the hiring of yaks, critical oxygen supplies or even Sherpa porter wages — can count towards success or failure.
How can you effectively make reasonable concessions and allow the other party to feel it is not costing him an arm and a leg?
After studying the process, I'm convinced that there are certain principles or guidelines that can help you to be more effective in the art of getting and giving concessions. One of the key considerations is whether or not you have issues about asking for a concession.
Many people are reluctant to do so because they do not want to appear cheap. On the other hand, many give concessions because they do not want to seem unreasonable or want to be liked.
Here are a a few guidelines to bear in mind:
Don't make the first concession on a major item
Hold fast to important items and make no offer to compromise. This is on the presumption that you may make concessions on the other less important items. You may use those concessions as reasons as to why you cannot compromise on the items that you feel are of more importance.
Know the relative importance of each item to each party so you can develop a strategy for concession-making. Ask questions such as “What is most important for you?” or “Of these three things, which is the least important?”
Give as little as possible, but what you do concede should be things that are of high value to the other party and hopefully of less value to you.
One of the best times to get a concession is when you are asked for one
Don't give a concession without getting one in return, even if it’s just a “small one”. Capitalise on basic human nature and remember that one of the best times to get a concession is when one is asked of you.
When asked for a concession (even a small one which you know you can give), ask the othe party: “If I do that for you, is there anything you can do for me?” There are two reasons for asking such a carefully worded question:
You are likely to get something of value that you hadn't bargained for. Most good negotiators have some concession they can throw in, if simply asked for it.
It will discourage the other party from asking for additional concessions. They realise that for every time they ask for a concession, you will ask for one in return.
I’m truly amazed at how people think they can ask for a concession without giving up anything, and how many people actually do that.
If you do meet with such a request, you should say: “When you mean by a cost reduction, is your expectation that I reduce the cost to you without any other benefit accrued to me by your side?
You’ll be surprised at the response. When put in this light, many people —not wanting to appear unreasonable — will often offer some benefit in exchange for the concession.
Don't accept the first offer
With practically every negotiator, some concessions are possible. Begin every negotiation by saying to yourself, “Every negotiator will concede something!”
Most of the time, you will be right. Explore the deal together to see if you can maximise the value for everyone. Remember, you want the best deal for all parties. By not accepting the first offer and by creatively probing for areas where concessions are possible, you open your mind, and hopefully the mind of the other party, to every possibility.
If you accept the first offer, about 99 per cent of the time, you could have done better.
Make people work for their concessions
Let's assume you want to buy my boat and I tell you I'm selling it for $500,000. After a quick inspection and brief test run, you agree to the price and we seal the deal.
I just got exactly what I asked for the boat in less than an hour from the very first person that approached me to buy it. Put yourself in my position. I'm happy, right? Wrong! Why do I feel that way? Because you didn't make me work hard enough to get the price.