Concession

Definition

A concession is a strategic compromise made during a negotiation or sales conversation to address objections and concerns raised by a potential buyer. This approach involves acknowledging the buyer's point of view and offering something in return, such as a discount, added service, or other benefits, to create a win-win situation and facilitate the closing of the sale.

5 Must Know Facts For Your Next Test

1. Concessions can be powerful tools in overcoming objections, as they show flexibility and willingness to meet the buyer's needs.
2. Effective use of concessions involves careful planning and understanding of the buyer's priorities to ensure that the compromise does not undermine the overall value of the offer.
3. Salespeople should avoid making concessions too quickly, as this may devalue their product or service in the eyes of the buyer.
4. Concessions are often used in combination with other objection-handling strategies, such as asking questions to understand underlying concerns.
5. The ultimate goal of making a concession is to build rapport with the buyer, fostering trust and encouraging them to move forward with the purchase.

Review Questions

• How can making a concession influence a buyer's perception during negotiations?
  • Making a concession can significantly influence a buyer's perception by demonstrating that the salesperson is willing to listen and adapt to their needs. This act of compromise can build rapport and trust, making the buyer feel valued in the conversation. When buyers see that their concerns are being acknowledged through concessions, they are often more open to considering the overall offer, which can lead to a successful sale.
• Discuss the potential risks associated with offering concessions too early in the sales process.
  • Offering concessions too early in the sales process can create several risks, including diminishing perceived value and leading buyers to expect further discounts or benefits without justification. If salespeople make concessions at the outset, buyers might question the product's worth and may not see its true value. Additionally, premature concessions can weaken the salesperson's negotiating position and may hinder their ability to close deals effectively by leaving little room for further negotiation.
• Evaluate how effective concession strategies can impact long-term relationships with clients in professional selling.
  • Effective concession strategies can have a profound impact on long-term relationships with clients by fostering goodwill and demonstrating commitment to their needs. When sales professionals make thoughtful concessions that resonate with clients' priorities, it creates a sense of partnership and mutual respect. This approach not only increases customer satisfaction but also enhances loyalty, leading to repeat business and positive referrals. Long-term relationships built on trust and understanding enable salespeople to navigate future negotiations more effectively and create additional opportunities for collaboration.

Related terms

Negotiation:

A process where two or more parties discuss their differences and come to an agreement, often involving give-and-take from each side.

Objection Handling:

The techniques used by sales professionals to address and resolve concerns or hesitations raised by potential buyers during the sales process.

Value Proposition: A statement that explains how a product or service solves customers' problems or improves their situation, highlighting the unique benefits it offers.