Negotiation 101: The Impact of Concessions (Part 2 of 2)
Victor Antonio
Keynote Speaker and Author - "Sales Ex Machina”, Relationship Selling" & "Mastering the Upsell | Hall of Fame Sales Speaker |
Now, having viewed the four graphs in the previous article, what’s your guess??
If you guessed Choice C, you are correct.??
Experts agree that concessions that start out big and then gradually get smaller are the most effective.?It makes sense if you think about it.?Progressively smaller concessions signal to the buyer that you are winding down the negotiations (i.e., further compromise).
When you look at Choice A, you see a pattern of small concessions, then they get progressively larger.?What signal does that send to the buyer??There are more concessions to be had.
When you look at Choice B, you can see a consistent pattern of concessions equal in magnitude.?In other words, every time a demand is made, the seller gives a 20% concession.?This only encourages the buyer to keep asking for more.
Choice D sends a signal to the buyer an ultimatum; this is my final offer. Take it or leave it.?One can hardly call this a negotiation tactic.
Summary of Concession Rules:?
1) Every concession sends a signal to the buyer
2) Big concessions encourage more requests from the buyer
3) Small concessions signal your closing down the negotiation.
4) Know your target (i.e., bottom line) price.
5) Plan out the magnitude (how much) of each concession and the number of rounds.
Resources I recommend if you want to do a deep dive into this particular subject on concessions:
★ WHY JUST STAND UP WHEN YOU CAN STAND OUT? ★ Preferred presentation design resource for main-stage speakers unwilling to compromise
1 年In my younger days, I was much more willing (okay, FAR TOO willing) to settle for less. My logic was that getting $1K for a $2K project was better than $0K--everything helped pay the bills. The critical fault in this logic was that, for subsequent projects, buyers now knew to halve my quote and offer only that. Now, I seldom budge, although I still often provide a range based on how many bells and whistles my client may seek. And, rather than lower my fees, I'll sometimes just whip up something that a longer-term client hadn't requested and give it to them as a Mother's/Father's/Birth-day present.
Proven Powerful Effective Sales Professional
1 年Thanks for the resources and perspective.