Whether you’re purchasing a new home or car, or negotiating a discount on an inventory purchase for your firm, the art of haggling enables negotiators to make a strong claim for their share of the pie. Here are six tips from the Negotiation Briefings newsletter to help you start becoming a better at haggling in business negotiations.
Best Alternative to a Negotiated Agreement. The true measure by which you should judge any proposed agreement. It is the only standard which can protect you both from accepting terms that are too unfavorable and from rejecting terms it would be in your interest to accept. (Roger Fisher and William Ury, Getting to Yes [Penguin Books, 1991], 100-01)
The following items are tagged BATNA.
At this point, you have entered the realm of haggling: the dance of concessions that follows each party’s first offer. (In our TV negotiation, the $1,100 list price was the store’s first offer.)
For some, this is where the real fun begins; for others, it’s time of great anxiety. To manage your stress, keep your BATNA at the forefront of your mind. Knowing that you have a good alternative if the negotiation fails will help you stay calm and rational. Suppose the salesperson tells you there’s no way he can go as low as $900.
“I could come down $75 to $1,025, though.”
Note that this offers $50 above your $975 reservation price—the maximum you’re willing to pay to get a deal.
When Leading Multiparty Negotiations, Break It Down: A great negotiator offers lessons for simplifying complex talks.
When Facing an Ideological Impasse, Appeal to Status: New research identifies a technique for breaking down barriers to agreement.
Negotiation Research You Can Use: Anger, sadness, and sacred issues.
Dear Negotiation Coach: The benefits of trust in negotiation and just how trusting you should be.
Suppose your research reveals that the TV you want is fairly new on the market.
Further research about your local store leads you to believe it may be willing to go as low as Amazon.com’s price of $900. Now you have a general sense of the ZOPA, or zone of possible agreement: between $900 (your estimate of the store’s reservation price) and $975 (your reservation price).
Now it’s time to assess the best deal you might get. Figuring out the other party’s reservation price is the key to knowing how far you will be able to push him, write Deepak Malhotra and Max H. Bazerman in their book Negotiation Genius: How to Overcome Obstacles and Achieve Brilliant Results at the Bargaining Table and Beyond (Bantam, 2007).
Start by considering the other party’s BATNA: What will he do if he can’t close the sale with you?
Like most retailers, he’ll simply have to wait for someone else to walk through the door.
Negotiation can be challenging. And so can teaching it! At the Program on Negotiation (PON) at Harvard Law School, we help educators, scholars and practitioners like you learn how to more effectively teach negotiation.
Notably, role-play simulations are a particularly useful way to facilitate experimentation and introduce participants to new dispute resolution tools, techniques and strategies. To help you gain a greater understanding of the impact of role-plays, we’ve recently introduced a new, free report: Teaching Negotiation. It reveals the answers to many common questions like:
• What does it mean to make a negotiation exercise “authentic”?
• When a role-play simulation is based on an historic event, how do you prevent students from simply “re-enacting” what happened?
• What role do human emotions play in role-play simulations?
• How do you create an immersive simulation experience in a short amount of time?
In today’s market, consumers are often the more powerful parties in negotiations with sellers.
To claim the most value in your next haggling experience, use the following six strategies.
In recent months, U.S. President Barack Obama and other world leaders have struggled to find a winning strategy to convince Russian President Vladimir Putin to back away from his aggressions toward Ukraine. In a Wall Street Journal editorial, Ken Adelman, U.S. President Ronald Reagan’s ambassador to the United Nations and arms-control director, writes that recently declassified accounts of negotiations between Reagan and Soviet leader Mikhail Gorbachev offer lessons that could help Western leaders approach their Russian counterpart more effectively.
According to Adelman, on his way to accept the 1980 Republican nomination, Reagan told an adviser that the primary reason he wanted to be president was “To win the Cold War.” Having set this overarching goal, Reagan tenaciously pursued it throughout his two terms in the White House.
How to Win at Win-Win Negotiation: Think you have to choose between collaborating and competing? A new book shows how you can have the best of both worlds.
Build Strong Relationships in Business Negotiations: When creating and implementing deals, negotiators reap great benefits from close bonds.
For Silicon Valley, a Breach of “Don’t Be Evil?” Allegations of collusion reflect the ethical perils of business negotiations.
Negotiation Research You Can Use: When Anchoring Isn’t Effective
Dear Negotiation Coach: Negotiating Patent Disputes in a Fair and Cost-Effective Manner.
Don’t be caught unprepared by hard bargainers, warn Mnookin, Peppet, and Tulumello in Beyond Winning. Here is their Top 10 list of common tactics.