Negotiation Strategies-Business & Finance

Having taken multiple courses in negotiation I will share some of the most interesting strategies and tools I learned. These are some things that may truly change how you approach negotiations.

BATNA

The golden rule of negotiation is to utilize your BATNA. BATNA stands for “best alternative to a negotiated agreement”. It is self explanatory if you think about it. Lets say I am negotiating for a new car at the Nissan dealership and I want a new fully loaded Altima for 35,000. Nissan is really trying to sell this car to me; they don’t know someone has agreed to sell me the same model, slightly used(10,000 miles) for 27,000. My BATNA to the 35,000 new Altima is the used Altima. When negotiating the seller may know I really want the fully loaded model, and he has the only one in the area. I need to let him know I can get a fully loaded model for 8,000 less(still under factory warranty). This takes the salesmen’s leverage and deems it useless to him. This will be advantageous to my deal. So the used Nissan is my BATNA and if the salesmen won’t sell me the new Nissan for a price that I deem worthy I have a better alternative(there is no skin off my back). The price I would need would probably be 31,000, this is because I think having a car with no miles compared to 10,000 is worth only 4,000 dollars to me. This may differ for you, maybe you would pay 6,000 to have a car with no miles versus one with 10,000 miles. The point is, it will always work in your favor to have a BATNA when negotiating. If a BATNA is not in the picture(collectables, rare items, ect.) you will likely have a rough time negotiating.

Active Listening

Active listening is important to me regarding negotiations due to the information you can obtain while practicing this technique. Active listening means to listen not to respond, but to learn about the other parties wants, needs, and so on. If I tell you I am going to Hawaii and you say “which island” you are listening to respond. If I tell you that and you nod your head and say nothing I may continue to ramble on and say I just got a divorce. You could also say “what made you choose to do that”. This type of listening allows you get understand the other party. You may find out that I just went thru a divorce and am in money trouble so I am desperate to sell my car. You may find out exactly what I am looking for when hiring for the position you are applying for and you will be able to use that information to get hired(or get a higher salary). Next time you are negotiating listen and you may uncover information that will benefit you.

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