The best bargaining tips taught by the experts should offer ways to enhance your bargaining power in negotiation. To do this, you must cultivate a strong BATNA, or best alternative to a negotiated agreement. The more appealing your best alternative is, the more comfortable you will feel asking for more in your current negotiation—secure in the knowledge that you have a good option waiting in the wings.
It’s hard to underestimate the importance of BATNA in negotiation—but BATNA development is more complex than just looking around for a good Plan B. Here are six bargaining tips and strategies for those seeking to improve their BATNA:
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- Two (or More) BATNAs Are Better than One. You may think you’ve identified a strong BATNA, but keep in mind that it’s subject to change. For example, you may have a good job offer in your back pocket, but what if the person who offered it leaves the firm? Because BATNAs can fall through, it’s smart to cultivate at least two or three of them, recommends Kellogg School of Management professor Leigh Thompson in her book The Mind and Heart of the Negotiator.
- Don’t Reveal a Weak BATNA. No matter how hard you try to develop a strong BATNA, you may be unable to do so. For instance, maybe you can’t find a job that seems half as appealing as the one you’re negotiating for. In such cases, be careful not to reveal a weak BATNA your counterpart, caution Harvard Business School professors Deepak Malhotra and Max H. Bazerman in their book Negotiation Genius. In addition, avoid appearing desperate to close a deal quickly or conveying you can meet anytime, anywhere.
- Don’t Let Them Diminish Your BATNA. If your counterpart does sense of your BATNA, don’t be surprised if he tries to diminish its value, even if it’s very strong. For example, if a recruiter finds out that you have an offer from a rival firm, he might disparage the firm in an attempt to make your BATNA less appealing to you and get you to agree to a deal. Remember that your counterpart has a vested interest in seeing you think poorly of your BATNA—and don’t fall for such tricks.
- Research the Other Party’s BATNA. In negotiation, your knowledge of your own BATNA will only take you so far; you should also try to identify your counterpart’s BATNA. For example, research hiring trends in your field to get a general sense of whether a firm is likely to have lots of good candidates or very few. Any connections you have at the hiring firm might also help you identify the firm’s BATNA. Of course, you can also ask the recruiter directly how many candidates the firm is considering, but expect her to exaggerate the strength of the firm’s BATNA.
- Assess “Two-level” BATNA Keep in mind that in most business negotiations, you face two counterparts: the person seated across the table from you and the organization he or she represents, notes Harvard Business School and Harvard Law School professor Guhan Subramanian. An organization may want its recruiter to conduct an exhaustive search for the best candidate for a position, but the recruiter may be motivated to hire someone before he goes on vacation in a week. For this reason, it’s important to think about the incentives of the person across the table, including how the person is compensated and his or her long-term goals.
- Beware a Sense of Entitlement. It’s smart to invest time and resources in developing a strong BATNA, but that investment can have a dark side, Malhotra and his Harvard Business School colleague Francesca Gino found in their research. When negotiators work hard to cultivate good alternatives, they may feel as if they wasted their time and money if they don’t have to turn to their BATNA. “This perceived loss creates a desire for a counterbalancing gain,” according to Gino. Negotiators who forego a strong BATNA tend to feel a sense of entitlement that can lead them to have high aspirations—and it can also lead them to engage in unethical behavior, such as lying or misrepresenting information to their counterpart, Gino and Malhotra found. You can avoid this temptation by reminding yourself that in negotiation, BATNA development is a necessary investment rather than a cost that needs to be recouped.
Do you have any BATNA bargaining tips to share from your own business negotiations?
- Will Your Eagerness to Do a Deal Look Like Desperation?
- Article: Negotiation and Nonviolent Action: Interacting in the World of Conflict
- Know Your BATNA and How to Achieve Optimal Outcomes in Negotiation
- When armed with negotiating power, use it wisely
- Dealmaking: Secrets of Successful Dealmaking in Business Negotiations