What is BATNA? The definition—a negotiator’s best alternative to a negotiated agreement—is among the most important pieces of information negotiators seek when developing dealmaking and negotiation strategies. If your current negotiation reaches an impasse, what’s your best outside option?
Most seasoned negotiators understand the value of evaluating their BATNA, a concept that Roger Fisher, William Ury, and Bruce Patton introduced in their seminal book Getting to Yes: Negotiating Agreement Without Giving In.
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Discover how to unleash your power at the bargaining table in this free special report, BATNA Basics: Boost Your Power at the Bargaining Table, from Harvard Law School.
A Classic Definition
BATNA stands for Best Alternative to a Negotiated Agreement. In plain terms, it is what you will do if you do not reach a deal.
That definition may sound simple, but its implications are profound. Your BATNA determines:
- Whether you should accept a proposed agreement
- How much leverage you bring to the negotiation
- When it makes sense to walk away
Is BATNA a negotiation skill or a negotiation strategy? It’s both. Identifying your BATNA is a foundational skill—and using it correctly is essential to crafting effective negotiation strategies.
Why BATNA Matters at the Bargaining Table
When bargaining, negotiators often focus intensely on the offer in front of them and lose sight of their alternatives. That’s a mistake.
A useful discipline is to pause for an explicit translation process: Are you actually comparing comparable options, or are you about to give up a solid deal in hand for a BATNA in the bush?
Consider the following example.
As the renewal deadline for Sam’s homeowner’s insurance policy approached, he decided to conduct a “market check.” His current insurer—let’s call it Acme—had raised rates by 7% and 10% annually over the past three years, and Sam wasn’t convinced he was getting the best value. His search turned up another carrier offering a policy priced 30% lower than Acme’s renewal quote.
Delighted, Sam came very close to switching providers. On its face, the alternative looked like a clear improvement—and a strong BATNA.
But after doing some digging (and receiving a bit of self-interested guidance from Acme), Sam discovered important differences buried deep in the policies’ fine print. Coverage limits, exclusions, and key term definitions varied in ways that weren’t obvious from the headline price alone.
Once Sam translated the two offers into truly comparable terms, he realized that Acme’s policy actually provided better coverage for his needs. What initially appeared to be a strong BATNA turned out to be weaker than he thought.
BATNA Is Only Powerful If You Understand It Correctly
Sam’s experience highlights a crucial lesson: a BATNA is only as strong as your understanding of it.
Misjudging your alternative can lead you to reject a favorable agreement—or accept a worse one—based on incomplete information.
Effective negotiators therefore treat BATNA analysis as an ongoing process, not a one-time calculation. They:
- Identify realistic alternatives, not hypothetical ones
- Compare options on truly equivalent terms
- Reassess their BATNA as new information emerges
By doing so, negotiators avoid being swayed by superficial comparisons and make more disciplined choices at the bargaining table.
The lesson: Rather than assuming that the deal on the table matches your BATNA point by point, translate your BATNA to fully understand what it means for the current negotiation. To learn more, read Know Your BATNA: The Power of Information in Negotiation.
How have you used any of these strategies in an important negotiation? Leave a comment below.
Claim your FREE copy: BATNA Basics
Discover how to unleash your power at the bargaining table in this free special report, BATNA Basics: Boost Your Power at the Bargaining Table, from Harvard Law School.
Adapted from “Taking Your BATNA to the Next Level” by Guhan Subramanian in the January 2007 issue of the Negotiation newsletter.