The Give-and-Get Framework: Never Make a Sales Concession for Free

Every Concession Has a Cost

Many salespeople think that making concessions helps them make their deal sooner. In fact, when customers demand discounts, convenient terms of payment, or some extra services, many salespeople feel inclined to concede and make their way forward. Indeed, nothing matters more than closing that deal.

But free concessions always come at a price.

Offering discounts, convenient terms of payment, or extra services will make you less profitable, undervalued, and lose negotiating power. That which seems insignificant today can turn into a trend damaging both the deal and your business.

Elite Full-Cycle Mavericks know better. All concessions should be exchanged, not conceded. Successful negotiation is not about compromising. It is about the creation of mutual value.

This is what the give-and-get framework is all about.

Why Negotiation is an Exchange of Value

Successful negotiators know that every deal has a trade-off in it. The buyer as well as the seller have their own goals and limitations. Winning in terms of taking a victory over another side is not the idea behind negotiation. The aim is to create a win-win situation.

Giving free concessions is never beneficial since it makes customers believe that more can be obtained if extra demands are made. As soon as one side makes concessions unilaterally, the process continues.

There is also an important distinction between negotiation and caving. During a good negotiation, there is an exchange of value. Caving occurs when nothing valuable is received in return for something.

Full-Cycle Mavericks do not make this mistake as they are able to maintain margins and achieve win-win situations.

Why Free Concessions Hurt Deals

Many sellers believe that by providing a discount, they increase their chances of making the sale. Unfortunately, in many cases, free concessions only bring more harm than good.

Profitability losses stand out as one of the major issues resulting from gratuitous concessions. Minor discounts might not hurt much, yet numerous concessions can negatively affect one's bottom line.

The next problem with free concessions lies in undermining the product's value. Since people tend to link pricing with quality, when the seller instantly agrees to reduce their prices, buyers will become skeptical about their initial offers.

However, what poses the greatest threat is the fact that concessions breed further demands. People are only encouraged to negotiate more and harder when they notice how easily they get what they want.

Therefore, the seller ends up getting caught in a never-ending cycle of requests and concessions.

Understanding the Give-and-Get Framework

The give-and-get strategy is based on a simple principle that there will be nothing in the deal if there isn't something to take back.

Instead of making all kinds of compromises when buyers make their demands, Full-Cycle Mavericks find ways to get the same from them as well.

If the buyer wants a price reduction, the seller will ask for commitment to a longer-term contract. If implementation costs are problematic, paying annually upfront is a sufficient value addition.

This helps ensure the sustainability of the pricing strategy while at the same time making sure that all the discounts and other concessions help move the business toward its goals.

Full-Cycle Mavericks realize that every concession they make needs to somehow add to the overall value that is generated by their negotiations.

Examples of Valuable Trade-Offs

The most effective negotiators create potential trade-offs well in advance of any negotiations taking place, and several leading organizations have taken this path of negotiation in order to preserve value and build valuable customer relationships.

A good case in point is that of Salesforce. Salesforce constantly offers discounts to customers who agree to enter into multi-year contractual agreements. The benefits of multi-year agreements include steady income streams and increased customer retention, which makes the sacrifice of value worth it. Salesforce explains its belief in multi-year customer agreements in its investor presentations:

Building Stronger Negotiation Habits

Effective negotiations are not random occurrences; they come from practice and discipline.

Great sellers plan concessions ahead of time. They know what they can give in and what they will get back. Preparation keeps emotions at bay and allows them to be consistent.

Another key element in negotiation skills is discipline. Buyers may exert pressure in the form of deadlines and urgency. At such times, novice sellers may get worked up and start giving things away to close the sale.

Mavericks never rush into a decision, regardless of the amount of pressure they are put under. They recognize that panic reduces their negotiating power. Thoughtful exchange leads to more desirable outcomes.

Confidence also contributes greatly to successful negotiations. It stems from believing in your ability to offer solutions that add value.

When sellers are confident in their solutions, they do not need to negotiate out of fear.

Why Value-Based Negotiation Creates Better Relationships

Unlike conventional wisdom may suggest, buyers don't always respect suppliers when everything they ask for is being granted to them.

Great business relationships require integrity and honesty. It takes two to tango. Both parties' efforts make the relationship more credible.

Another reason why value-based negotiations facilitate better relationships is that customers know that every concession made is a big deal and associated with a commitment.

Such an attitude builds up trust and creates a good platform for further cooperation.

Mavericks are fully aware of the importance of preserving value. Healthy negotiations lead to healthy partnerships.

Conclusion: Great Negotiators Trade, They Don't Give Away

It's common knowledge that the best salespeople know every compromise comes at a price.

Making concessions without getting anything in return results in poor margins, less leverage, and more demands. Effective negotiating isn't bowing down to demands; it's making compromises in ways that work for both parties involved.

The give-and-get approach gives Full-Cycle Mavericks the freedom to protect their prices while simultaneously building their customer base. Whether it is securing long-term contracts, upfront payment, or even a good referral, every concession is a chance to build even more value.

Great negotiators don't give things away. They trade. That's what sets the great Full-Cycle Mavericks apart from the rest. That's what sets the great Full-Cycle Mavericks apart from the rest. This same ownership mindset is what separates top-performing sales professionals from average reps. As discussed in Why the Best Early-Stage AEs Operate Like Founders, the strongest sellers think beyond individual deals and focus on creating long-term value for both their customers and their business.