Strategic Concessions

Introduction

The Strategic Concessions technique refers to the intentional, planned use of small give-ups to gain greater value or momentum in negotiation. Rather than reacting to pressure, skilled sellers use concessions to build reciprocity, protect trust, and maintain control of the deal flow.

For Account Executives (AEs), Sales Development Representatives (SDRs), and sales managers, mastering strategic concessions means knowing what to trade, when to trade it, and how to frame it. This article defines the concept, explains its psychological foundations, and provides a structured playbook for applying concessions ethically and effectively in complex sales settings.

Historical Background

The structured study of concessions emerged from early negotiation theory in the 1960s–1980s. Research by Walton and McKersie (1965) described concession behavior as a function of integrative bargaining—finding trades that create mutual gain rather than simple price cutting.

Later, Getting to Yes (Fisher & Ury, 1981) reframed concessions through principled negotiation, emphasizing objective criteria and reciprocity. In business-to-business (B2B) selling, the concept evolved from tactical giveaways to strategic exchanges of value—time, terms, or scope traded for commitment, information, or speed.

Modern sales ethics emphasize transparency: a concession is ethical only when both parties understand its rationale and consequence. The focus has shifted from manipulation to stewardship—protecting relationships while closing viable deals.

Psychological Foundations

1. Reciprocity Norm

Humans feel compelled to return favors (Gouldner, 1960). When a salesperson offers something perceived as genuine—a discount, flexibility, or resource—buyers experience psychological pressure to reciprocate with commitment or agreement.

2. Anchoring and Adjustment

The first offer sets a mental reference point (Tversky & Kahneman, 1974). Strategic concessions rely on starting high enough that each move downward appears generous yet controlled.

3. Loss Aversion

People dislike losing perceived gains (Kahneman & Tversky, 1979). Concessions framed as conditional (“we can include this if you…”) exploit this bias—buyers hesitate to forfeit benefits once offered.

4. Fairness and Equity

Concessions signal cooperation, which fosters fairness judgments (Fehr & Schmidt, 1999). When exchanged symmetrically, they strengthen the relationship and make final agreements feel just.

These principles make strategic concessions powerful levers—if managed deliberately, not emotionally.

Core Concept and Mechanism

What It Is

A strategic concession is a planned, value-balanced adjustment offered to advance agreement without undermining integrity or margin. Each concession should cost something, earn something, and signal progression.

How It Works – Step by Step

Identify what can move (price tiers, payment terms, delivery timing) and what cannot (profit floor, service quality, ethics).

Start with low-cost, high-perceived-value concessions. Escalate only when reciprocity or closure probability increases.

Always link a concession to a buyer action: “If we extend this term, can we finalize today?”

Frame concessions with data (“That adjustment equals two months of support value”).

Document trades in writing to prevent “concession amnesia.”

Ethical vs. Manipulative Use

Ethical: Concessions grounded in transparency and mutual gain (“We can adjust scope if we reduce deliverables”).

Manipulative: Artificial inflation of initial terms to “give away” false value.

The ethical test: would the trade still feel legitimate if fully disclosed? If yes, it’s strategic. If not, it’s theater.

Practical Application: How to Use It

Step-by-Step Playbook

Concessions land better in trusted conversations. Begin with discovery and shared goals.

Example: “Let’s structure this so both sides succeed in rollout and ROI.”

Identify what the buyer values most—price, risk, timeline, reputation—and design trades around those levers.

Prepare 3–5 moves in advance, ranked by value cost. Example: extended payment terms → implementation support → small discount.

When hesitation softens or tone shifts, that’s the moment to deploy a controlled concession, not before.

Anchor each give with a get:

Recap mutual effort and confirm the fairness of the outcome:

“We both moved to make this work—let’s document and finalize.”

Example Phrasing

Mini-Script Example

Buyer: “Your competitor’s price is 10% lower.”

AE: “I understand. Their model likely excludes deployment support. Here’s what we can do: if you confirm this week, I’ll add two consulting hours at no extra cost.”

Buyer: “That’s helpful—can you also extend payment terms?”

AE: “We can extend by 15 days if the contract closes this month. Fair?”

Buyer: “Deal—send the paperwork.”

Table: Strategic Concessions in Practice

Real-World Examples

B2C Scenario: Automotive Retail

A buyer negotiates for a lower car price.

Salesperson: “If you confirm today, we can include one year of maintenance—value about $600.”

The perceived gain outweighs the dealer’s cost while preserving listed pricing.

Outcome: Sale closes same day with a 5% higher margin than standard discount deals.

B2B Scenario: SaaS / Consulting

A SaaS AE faces budget limits from procurement.

“If we hold price steady, we can extend your onboarding from four to six weeks and add quarterly reviews.”

Procurement accepts—perceived concession in service replaces price reduction.

Outcome: Contract value unchanged; customer success metrics improve due to increased engagement.

Common Pitfalls and How to Avoid Them

Advanced Variations and Modern Use Cases

1. Digital and PLG (Product-Led Growth) Models

In digital funnels, concessions occur through limited-time credits or free tiers.

Example phrasing:

“If you upgrade before renewal, your legacy pricing remains locked for a year.”

These concessions preserve predictability while nudging conversion.

2. Subscription and Usage Models

Replace one-off discounts with long-term value adjustments.

“We can extend usage credits next quarter instead of reducing today’s rate.”

This maintains recurring revenue integrity and demonstrates partnership thinking.

3. Cross-Cultural Adaptations

4. Team Coaching Application

Managers can train AEs to record each concession’s trigger, value cost, and earned return. Reviewing these patterns sharpens judgment and protects margin discipline over time.

Conclusion

The Strategic Concessions technique turns negotiation into a disciplined exchange of value, not a reactive discount battle. When concessions are deliberate, conditional, and documented, they build trust, accelerate closure, and sustain profitability.

Used ethically, they communicate partnership and professionalism—proving that flexibility and firmness can coexist.

Actionable takeaway: Plan every concession before you enter the room. Give deliberately, get proportionally, and close confidently.

Checklist: Do This / Avoid This

✅ Define negotiables, non-negotiables, and concession ladder before the call.

✅ Use “if–then” language to attach gives to gets.

✅ Offer non-monetary concessions first.

✅ Quantify and summarize every trade.

✅ Maintain calm, data-driven tone.

✅ Document outcomes to prevent re-negotiation.

❌ Don’t give away value without reciprocity.

❌ Don’t anchor too low initially.

❌ Don’t feign concessions that never cost anything.

❌ Don’t let fatigue or silence force movement.

FAQ

Q1: When do strategic concessions backfire?

When given too early or repeatedly—they signal desperation rather than collaboration.

Q2: What makes a concession “strategic”?

It’s planned, conditional, and value-balanced—each give earns a tangible return such as commitment, timeline, or reference.

Q3: How can teams enforce concession discipline?

Through approval workflows, pricing guardrails, and post-deal analysis that quantifies cost vs. gain of each concession.

References