Negotiation Intelligence: BATNA is your secret power in negotiations

BATNA is the most common source of power in negotiations and is the most overlooked by inexperienced or poorly educated negotiators. This is exactly where you can gain a significant advantage.

Simply put, BATNA is your backup plan: your emergency power supply.

Entering a negotiation without a good understanding of your BATNA and at least a general idea of ​​the other party’s BATNA is like driving blind.

Here are two quick examples:

1. A buyer makes an offer on a property next to her sister. The only reason she moves is to be close to her sister. How strong is her BATNA?
2. Another buyer is an investor who is looking for an apartment in a particular building that he thinks has a good price. There are sixteen units for sale and the average days on sale is sixty-four. How strong is his BATNA?

The answer to number one is weak. If she is not successful, she will not achieve her goal of living next door to her sister because the only other neighbor is not selling.

The answer to number two is powerful. If he is not successful, he can simply walk away and bid on another unit in the same building. He can even wait. He has options. He can easily run away.

Understand your customer’s BATNA

Your BATNA is your strength. Failure to understand and communicate can lead to clients making poor decisions. If you overestimate it, they may turn down an offer that they later regret. If you underestimate it, they could be leaving money on the table.

Some clients openly share their situation; others hold their positions or inflate them to appear stronger. When a seller says he is “not in a hurry” or “can rent the property anytime,” these are BATNA statements. Your job is to get to the truth, which requires building trust, an important negotiation skill.

Building a strong BATNA for your customer

When a client has legitimate alternatives, his bargaining position immediately improves. Consider a seller with more than one offer, or a buyer who has identified two other acceptable properties. These situations create room for better judgment and better results. By helping customers understand their BATNA and working with them to build stronger alternatives, you not only strengthen their position but also demonstrate your deep skills as a professional negotiator.

Communicating BATNA with customers

Explaining BATNA creates trust and strengthens your professional position. Even if you can’t improve a client’s BATNA because he or she wants one specific home, at least you have clarity and can move forward with your eyes open.

Discussing BATNA with sellers also helps them understand why pricing strategy is so important. If they price too high, they dramatically reduce their chances of attracting more than one buyer, which weakens their BATNA and their bargaining power.

The other side is BATNA

Understanding the other party’s BATNA is just as important, but more difficult. Strong negotiators have the skills to uncover useful information. Your conversations with the collaborating agent are important. Although they cannot reveal confidential information, you can often read between the lines, access public information online or speak to neighbors.

Communicate your BATNA

What you share with the other side matters. In a slower market, saying nothing can reduce your chances of a successful deal. However, sharing too much can harm your client.

I once offered on an investment property through my agent, making it clear that my price was firm and that I had no emotional attachment to it. The agent – ​​someone I had trained – and her seller signed back for a higher price, apparently believing I would negotiate. I walked away and bought another property within days. A week later they came back with a seller offer on my original number, but by then I had already closed on the alternative. They misinterpreted my BATNA as weak when it was strong. The inability to properly communicate BATNA cost everyone a deal.

Here’s the rule of thumb: if you have a strong BATNA, you can share some details because they convey power and benefit your client, and only do so with your client’s approval; if you have a weak BATNA, you should not share information because it will weaken your position.

The skills required here are: know your BATNA and plan your negotiations accordingly; develop the communication skills to avoid answering a question while maintaining a collaborative relationship.

In conclusion

Understanding, building and communicating BATNA is a core negotiation skill that strengthens your client’s position, improves results and strengthens your role as a trusted and competent professional.