This is the sixth and final article in a series.
This completes my series of blog postings about the top negotiating traps in which you could unknowingly find yourself when dealing with a corporate buyer. Here is the sixth trap to avoid.
Negotiating Trap #6: Neglecting your BATNA (Best Alternative To a Negotiated Agreement)
Closing the order for a large-quantity sale of your books should not be your objective. Your goal should be to close an order that is in everyone’s best interests – especially yours. Your Best Alternative To a Negotiated Agreement (BATNA) is an alternative opportunity that could be better than the one in front of you.
In any negotiation, each side must ultimately choose between two options: accepting a deal or taking its best no-deal option. During the negotiating process, you could get a “gut” feeling that something isn’t right. Your intuition may be telling you that a deal could be difficult for you to fulfill. If you have other opportunities that you could pursue, it makes it easier for you to decline to accept an offer.
Both sides have a BATNA. Your prospect will not become a customer until your offer beats their no-deal option. Your prospect has at least four possible courses of action: 1) do not do the deal at all, 2) do it themselves, 3) do it with a competitor or 4) accept your negotiated proposal. Both parties doing better than their BATNA is a necessary condition for a win/win agreement.
Having your own deal/no-deal option helps you in several ways:
• It is more likely that the result will be in both party’s best interests. Inexperienced negotiators become preoccupied with tactics, trying to improve the potential deal while neglecting their own best outcome and BATNA. The real negotiation dance is “deal vs. BATNA” not one or the other in isolation.
• It gives you confidence to decline an offer. If you know you have an alternative in your back pocket you can smile when they think they have you in a corner. You know that if this doesn’t work, you have other companies that may be willing to meet your terms.
• The better your BATNA appears the more credible is your threat to walk away. You should not reveal your BATNA, but let people know where you stand by accepting or declining terms that do or do not meet your criteria. The other party recognizes that you are not going to cave in to their demands and may be more willing to discuss options.
• It sets the threshold for an acceptable agreement. Once you accept or decline to agree to a term, you have drawn your line in the sand beyond which you will not cross.
• It defines a zone of possible agreement. As you participate in the negotiation dance, both parties understand each other’s upper and lower limits you can both work within that framework. The zone is established by each party’s best outcome on the upper level, and each party’s BATNA on the lower level.
Through the give-and-take process you concede on one term that may be important to the other side, but not to you. As a quid pro quo, ask for a concession on a point that is important to you, but not to them. Over time, you know what you both are and are not you willing to negotiate away. The negotiation process works within those parameters.
Should you take the money… or run? Ask that question of yourself before signing on the dotted line. After you sign, it’s too late to change any part of the agreement. Know when it is best for you to commit or go to the next deal.
Brian Jud is a book-marketing consultant, Executive Director of the Association of Publishers for Special Sales (APSS – www.bookapss.org) and author of How to Make Real Money Selling Books and Beyond the Bookstore. Contact Brian at firstname.lastname@example.org or www.premiumbookcompany.com and twitter @bookmarketing