Don t Give Goodwill Concessions

Don't Give Goodwill Concessions

Some trainers use the term 'goodwill concession' to describe one-way movement on your part for which you have not asked for any return. Why do unskilled negotiators wrongly do this? Such concessions are often given incorrectly to get the negotiation concluded, or even to start it in the first place. The reality is that it makes your counterpart stronger.

These concessions are often given out of insecurity or discomfort, usually because of lack of knowledge about what to do. That's why it is so important to develop our negotiating skills. This is most typical with business owners who do not enjoy selling, marketing or negotiation. They have made a proposal, calculated the price, the other person seems reasonable and appears to have a need for the service, but the final agreement seems stuck. Out of simple naïveté or often out of frustration, the business owner will give a concession out of purported goodwill.

This is wrong, and seriously so. First, the other person will take advantage of the concession and invariably ask for more. Second, the profit level of the job is now eroded and will affect the owner, his or her staff, perhaps even the company's viability. Third, it will affect the owner's motivation for this job, for this client. It will leave a sour taste that need not have been there. The hard fact is that it was the owner's lack of competence and no fault of the other party. The more damaging long-term impact is the erosion of confidence in the owner's own business skills - all so easily rectified.

These one-way movements are sometimes given 'to get the deal moving'. Of course movement is essential, but it must always be two-way. A good phrase to handle this situation is 'If you... then we will...' These four words are the nearest we will get to a magic phrase, because they force us to trade and not give. They always facilitate a response.

One-way movement like this creates a precedent that will rear its head every subsequent time you negotiate with the same person. They will expect it from you, and you will be weakened by the historic fact and the current pressure it is placing you under.