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A Tug of War

You can't have it all. To negotiate successfully, you've got to master the art of give and take.

When it comes to creative negotiation, deal-makers must master two tools: the concession and the condition. Simply put, a concession is what you give, and a condition is what you get. Grammatically speaking, a condition is the "if" clause; a concession is the "then." If you pay now, then I'll knock off 15 percent. If you finish by Tuesday, then you get a bonus.

Clever use of concessions and conditions is the trademark of an inventive deal-maker. Each concession is a minideal. You give in order to get. Even seemingly unilateral concessions create tacit obligations, jump-start talks and generate goodwill, all of which are benefits to you. Before you give, always consider what you'll get. And if you cut a really hard bargain, don't just go tit for tat. Use each "give" to get as much as possible. Besides, being stingy with your concessions will wear the other side down and discourage additional demands.

On the other hand, not only is the condition the better half of any exchange since it's what you get, it's also a great way to control the negotiation. In some ways, it's even more powerful than the concession. Here are some applications:

Refuse to make any concessions until you know all the demands. This is a really effective use of the condition. Make it part of your standard repertoire. If you don't, just when you think you're done, you'll get another demand . . . and another and another and another.

Negotiate how you'll negotiate. Call this a "metanegotiation." Condition your very participation on the time, place, number of participants, agenda and so on, cleverly stacking the deck in your favor. Remember the Vietnam peace talks? Given upcoming presidential elections, the North Vietnamese gained tremendous power by delaying discussion over more substantive issues with endless bickering over the shape of the bargaining table.

Condition your agreement on the approval of a "higher authority." It buys you time to think or regroup, and that authority can be anybody-your spouse or your business partner, for example.

Condition all your concessions on each other. This is sometimes called a package deal, and it gives your opponent a strong incentive to close. After all, one more demand, and you may revoke everything. For example, trading in a car is often three deals in one: the deal for your old car, the deal for your new car and the deal for your loan. To make a good deal overall, you must make a good deal on each one. So condition your agreement to each individual deal on your agreement to the other two.


A speaker and attorney in Los Angeles, Marc Diener is the author of Deal Power.

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This article was originally published in the September 2003 print edition of Entrepreneur with the headline: A Tug of War.

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