Everything You Need to Know About Concessions in Negotiation

Executive Summary

Concessions are one of the most critical levers in negotiation. They represent the compromises and trade-offs that shape agreements, yet too many negotiators give them away without strategy. This article explores what concessions are, how they differ from compromises, and the strategies to manage them effectively. Drawing on Dr. Chester L. Karrass’s teachings, it emphasizes the importance of reciprocal trade-offs, timing, and communication to transform concessions into tools for progress instead of pitfalls

The Importance of Negotiation Space

In most negotiations, both sides move from their original positions. It is wise to leave yourself "negotiating space" when you make your initial offer.

Each side to a negotiation usually compromises by making some concessions to reach agreement. Careful concessions help guide you through this process toward a mutually satisfying agreement. Below we list some tips on things to keep in mind when making concessions.

What Are Concessions in Negotiation?

Concessions in negotiation are the compromises or trade-offs that each party makes to move closer to a final agreement. These may include changes to price, scope, timing, terms, or other conditions of a deal. A concession strategy is critical for navigating the back-and-forth of bargaining while still protecting your interests. Making the right concession at the right time can help build trust and momentum—but giving up too much too soon can lead to poor outcomes. Mutual concessions—when both parties give and get—often lead to stronger, more collaborative deals.

Next, we’ll share some strategies to effectively make concessions in negotiations.

Don't Give Free Concessions

Never give a concession without obtaining one in return. Don't give concessions away free or without serious discussion. A concession granted too easily does not contribute to the other party's satisfaction nearly as much as one that they struggle to obtain.

Craft Your Concession Wisely

Concessions that are poorly made can serve to further separate the parties rather than bring them together. A concession may serve to raise the aspiration level of the other party if it is interpreted as a signal of your weakness. Don't be too quick to give a concession, and don't "shoot from the hip" -- think through the potential impact of any concession you give. How a concession is made is as important as the value of the concession.

Keep Count

Never lose track of how many concessions you have made, regardless of their value. The overall number is important and can provide bargaining leverage. Keep a written record of your concessions.

Stay Flexible

Flexibility is like money in a checking account. Do not use up your "bank account of flexibility." Every concession should bring you closer to some goal. If you use up all of your potential concessions your bank account is down to zero and deadlock is harder to avoid. Always look for a concession that the other side will value more than what it really costs you.

Build In a Way to Retreat

Don't feel constrained to stick with a concession on a specific issue. The whole agreement is more important than individual issues. Indicate to the other side that all concessions you give are tentative and based on a satisfactory overall agreement (i.e. "tie a string"). Some people tend to stick to interim concessions when they should not. They fear that their integrity may be questioned if they retreat from concessions they have made. Such rigidity can be costly.

Concession vs Compromise

While both concessions and compromises involve giving something up, a concession is often made unilaterally to influence the negotiation process, whereas compromise implies a mutual adjustment. Understanding the difference can help shape your concession strategy. A negotiator might make a small concession early to build goodwill, whereas a compromise usually emerges later when both parties work to bridge a gap in expectations.

Types of Concessions in Negotiation

There are several types of concessions negotiators might make. These include price reductions, added services, adjusted delivery times, revised payment terms, or strategic commitments. Some concessions are tangible (like a discount), while others are intangible (such as flexibility or exclusivity). Be cautious about making unilateral concessions, which can weaken your position. Focus instead on identifying high-value, low-cost trade-offs that move talks forward.

How to Communicate Your Concessions in Negotiation

How you present a concession is just as important as what you offer. Frame each concession as a significant step that brings both sides closer to agreement. Use conditional language, such as "If I do X, can you do Y?"—this anchors the concession as part of a reciprocal process. Avoid appearing desperate or overly eager, and always document the concession process so that nothing is lost in translation.

How Do Concessions Impact the Outcome of a Negotiation?

Concessions shape the negotiation's trajectory and final outcome. Strategic concessions can unlock deadlocks and foster collaboration, while poorly timed or excessive concessions can diminish your perceived power. When managed carefully, the concession process creates space for problem-solving and leads to agreements that satisfy both parties' key interests. That's why every strong negotiation plan includes a well-thought-out concession strategy.

Key Takeaways

Concessions are trade-offs that move negotiations toward agreement, but they must be strategic, not free.
The difference between a concession and a compromise lies in reciprocity: concessions are often unilateral, while compromises are mutual.
Poorly timed or excessive concessions can weaken credibility and bargaining power.
Effective concessions are conditional, documented, and framed as significant steps forward.
Strategic concessions help unlock deadlocks, build trust, and lead to stronger final agreements.

Frequently Asked Questions About Concessions in Negotiation

What is a concession in negotiation?

A concession in negotiation is something one party gives up or adjusts in order to move closer to agreement. It could be price, delivery, terms, or other conditions—but it should always be part of a reciprocal exchange, not given freely.

What is the difference between a concession and a compromise?

A concession is usually a unilateral move, made by one side to progress talks. A compromise is a mutual adjustment, where both sides meet in the middle. Strong negotiators manage concessions carefully before working toward compromise.

What are examples of concessions in negotiation?

Examples include discounts, added services, extended warranties, faster delivery, or flexible payment terms. Effective negotiators focus on low-cost, high-value concessions that can be traded for reciprocal benefits.

How can I communicate concessions more effectively?

Always frame concessions as conditional steps, using phrases like 'If I do X, can you do Y?' This positions them as part of a trade rather than a giveaway. Document each concession to avoid misunderstandings.

Why are unilateral concessions risky?

Unilateral concessions signal weakness and can raise the other side’s expectations. They reduce leverage and may lead to further demands. Negotiators should always trade, not give, when it comes to concessions.

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