1. Label your concessions
In negotiation, don't assume that your actions will speak for themselves. Your counterparts will be motivated to overlook, ignore, or downplay your concessions. Why? To avoid the strong social obligation to reciprocate. As a result, it is your responsibility to label your concessions and make them salient to the other party—a responsibility that the manufacturer in the introductory example neglected.
Your concessions will be more powerful when your counterpart views your initial demands as serious and reasonable.
When it comes to labeling, there are a few rules to follow. First, let it be known that what you have given up (or what you have stopped demanding) is costly to you. By doing so, you clarify that a concession was, in fact, made. For example, the manufacturer could have explained the effect of a 3 percent wage increase on his firm's bottom line or discussed how difficult it would be for him to justify it to his board of directors.
Second, emphasize the benefits to the other side. My own research suggests that negotiators reciprocate concessions based on the benefits they receive, while tending to ignore how much others are sacrificing. One way for the manufacturer to highlight the benefits he was providing to the union would be to contrast his offer with those made by similar firms (assuming they were lower).
Third, don't give up on your original demands too hastily. If the other side considers your first offer to be frivolous, your willingness to move away from it will not be seen as concessionary behavior. By contrast, your concessions will be more powerful when your counterpart views your initial demands as serious and reasonable. Accordingly, spend time legitimating your original offer and then use it as a reference point when labeling your concession. The manufacturer, for example, would have been wise to make concessions slowly. Eventually, he could point out that his final offer was closer to the union's original demands than it was to his own.