May 22, 2020

Develop Your BATNA

Negotiating any sort of deal can be a challenging task. Each side has its own interests, so finding common ground can be difficult.
In this post, I’d like to focus on the financial aspect of meeting the other side in the middle. As you can imagine, this can be the most important aspect of negotiation.
Let me give you an example: We had a session with a Sydney-based real estate agency specialising in inner city properties. They wanted to figure out how to create a win-win situation and maximise gain on both ends.
While there are a number of techniques you can use here, it comes down to developing your BATNA.

This is a technical term I learned at Harvard. It is in fact very simple to understand.
BATNA stands for Best Alternative to a Negotiated Agreement.
Let’s say you want to sell something for $10, but your client wants to pay $5. But you have another buyer keen at $7. In this case, your BATNA would be $7, and you can use it to drag your client’s price higher.

Negotiators use BATNA in all sorts of situations. From hostage negotiations to oil contracts and car deals, it’s applicable to everything. You need to figure out your BATNA if you want to come to an agreement that benefits both sides.
In some cases, BATNA might go in your favour compared to the other side. That’s almost always the case when you have some sort of leverage you can play to.

As long as you know your BATNA, you can come to an agreement at the midpoint that the other side will likely agree to. Think about a number you’d be comfortable with and use it for negotiating a deal.
If you want to learn more about how to become a top negotiator , just click here to get in touch.