When you hear the term negotiation, you probably think of something like this:
Monty Python – “The Life of Brian.” (1)Jones, T., Chapman, G., Cleese, J., Gilliam, T., Idle, E., Palin, M., Monty Python (Comedy troupe), … Anchor Bay Entertainment, Inc. (1999). … Continue reading
Or maybe this:
“The Fifth Element” (2)Besson, L., Kamen, R. M., Ledoux, P., Willis, B., Oldman, G., Jovovich, M., Arbogast, T., … Columbia TriStar Home Entertainment (Firm). (2007). … Continue reading
Perhaps Korben Dallas could use a bit more decorum when negotiating – or maybe not.
We negotiate every day; whether we are trying to reach a settlement, trying to find our way along a path, or are deciding what to wear today – we are negotiating. For this post, we will use Merriam-Webster’s definition, “to arrange for or bring about through conference, discussion, and compromise.”
The audience we are negotiating with can be ourselves, someone else, or even an entity – like a corporation or government. No matter the audience, a person must understand that a negotiation is taking place and what the desired outcome is.
The first step to a negotiation is understanding that it is going to take place. If you are heading in to buy a car, or a house, or any number of big ticket items, you typically expect to haggle a bit. If you are in an open-air market or yard sale, you also expect to wrangle some. However, when you are in a grocery or hardware store in the US, you are more than likely not going to negotiate the price of an item.
Purchases are places we can readily recognize a negotiation. Dealing with a 5-year old or getting a divorce is also a negotiation. Coping with a debt collector or working out a co-parenting plan is a negotiation. Working through a conflict with your significant other or deciding to go off diet is also a negotiation.
BATNA / WATNA
Once you realize you have or are going to enter a negotiation, perhaps the first thing you should do is establish your BATNA and your WATNA. These are you Best and Worse alternatives to a negotiated agreement. You need to know what will happen if you do not reach a settlement. If you are haggling for a car, what will happen if you and the seller cannot come together. Are you able to go without purchasing this car? Can you find a better deal elsewhere? All of these are things you need to know.
Auctions are successful for the seller because they rapidly liquidate items but also because it is common for multiple parties to become engrossed in the competition of the process and in the end, exceed the value of the item they are bidding on. They become invested in the purchase more than the item. In a negotiation, you must know your limits. If you know your BATNA and your WATNA before you go in, you are in a position to walk if you cannot get what you want.
Position vs. Interest
Positional bargaining is negotiating based on positions. A position (in regards to negotiations) is that which you want. You are selling your house. You are asking $85K for it. You receive an offer for $65K. You counter with $75K and not a penny less. $75K is your position. The buyer wants the house for less, that is their position. You can go back and forth on this number, but as long as there is a separation between the two positions, there cannot be an agreement.
If the position is what is desired, then the interest is why this is. If you look behind the positions, at the interests driving them, you may have a chance to come to terms. Positions are fixed, possibly immovable stances. Interests explain the why behind them. You want $75K for the house. You need this as a minimum because once you pay closing costs, commissions, fees, taxes, etc. all you will have left is enough to pay off the mortgage.
The buyer isn’t willing to pay more than $65K because they will need to purchase a small tractor to deal with the maintenance and upkeep of such a large tract of land. If both parties stick to their positions and never reveal their interests, this deal will surely fall through. However, once each interest is revealed, movement can potentially happen.
Perhaps you already have a tractor and you have no use for it anymore once you sell because you are moving into a condo in Florida. You can offer to include this in the sale and the buyers can increase their offer. There are many ways things can go, once you delve into the why behind the what.