Beyond BATNA: Crafting Profitable Agreements from the Get-Go

By RED BEAR September 14, 2023 | 7 min read

BATNA, or Best Alternative to a Negotiated Agreement, is all about planning out the best alternative in the event negotiations fall through.

Imagine you’re a CTO for a medium-sized company, and you’re searching for a new Customer Relationship Management (CRM) solution for your business. Let’s say Company A offers better features but at a premium price of $50,000 per year. Company B, on the other hand, offers a slightly less robust solution for only $35,000 per year. 

This offer from Company B is your BATNA.

You return to Company A with your alternative offer in hand. You express that while you see value in their additional features, the price difference is significant.

Using only a BATNA mindset, there are two outcomes to this scenario: Company A matches the offer, or you fallback to the deal with Company B.

While this strategy might seem adequate for achieving your goals, you should ask yourself, “Am I settling for an alternative when I could get the best outcome from the onset? Is the assurance of a BATNA causing me to miss out on crafting the most optimal agreements from the very beginning with both parties?”

Instead of approaching negotiations with the mindset of ‘what’s our backup?’, shouldn’t you be gearing up with the conviction of achieving the absolute best right from the start?

Here at RED BEAR, we champion a tried and true approach to negotiation that prioritizes relationship building and collaboration. With a firm foundation based on the principles and behaviors of successful negotiation, you can aim for the best possible outcome from the start.

The Limitations of BATNA

At its core, BATNA, with its inherent safety net, can trap negotiators into a tunnel-vision mindset. 

The focus becomes the immediate deal, with negotiators failing to consider the long-term implications, broader business goals, and potential collaborations that might lie beyond the current discussion.

Instead of viewing negotiations as part of an ongoing business relationship, BATNA can unintentionally push one to perceive them as isolated and purely transactional events.

This goes against the methodology we’ve developed here at RED BEAR, one that’s been utilized by 45% of the Fortune 500.

By having a preconceived BATNA in mind, negotiators might inadvertently cap their expectations. Over-reliance on BATNA could, paradoxically, make one less adaptable and agile in recognizing and capitalizing on unexpected opportunities that might emerge during the course of a negotiation.

Negotiation isn’t just about getting to the highest (or lowest) possible number. It’s a dance, a dialogue, a chance to forge and strengthen business relationships.

In the best B2B relationships, both sides take chances on new ideas, offer transparency, and take a long-term view.

Overemphasis on BATNA can, at times, infuse the negotiation atmosphere with a cold, transactional aura. If one party is overly fixated on their BATNA, it might send unintended signals — suggesting they're ready to walk away or implying they have other attractive options. 

Prioritizing Relationships: The Key to Successful Negotiations

Establishing trust is paramount in negotiations. 

First impressions can determine perceptions of trustworthiness, likability, and competence in mere milliseconds.

By fostering relationships, there's an environment conducive to open and honest communication. When both parties trust each other, they're more likely to share valuable information, ultimately leading to better negotiation outcomes. 

Here at RED BEAR, we stress the importance of finding a balance between the competitive, collaborative, and creative dimensions of negotiation. When you approach negotiations from a collaborative perspective, you and your team can find common ground and search for creative solutions that result in win-win outcomes.

These win-win outcomes are rocket fuel for good relationships.

Negotiations shouldn't just be about the immediate gain; it’s essential to consider the bigger picture. By adopting a long-term perspective, both parties can identify mutual areas of growth, potential future collaborations, and strategic alliances.

It’s not just about satisfying immediate wants but truly understanding and catering to the underlying needs of both parties. 

It's imperative to probe and identify the real needs of the other party rather than simply responding to their expressed demands. In doing so, not only is the immediate negotiation likely to be more successful, but it also lays the groundwork for ongoing collaboration and mutual benefit.

At the end of the day, behind every negotiation is a human being with emotions, motivations, and concerns.

When you focus too much on a BATNA, you can lose sight of this fact. 

For example, let’s say sales is looking for higher prices in a negotiation. If they only have their BATNA in mind, they might miss the underlying needs of the other party — which may be to ensure job security, earn recognition from their superiors, or ensure operational assurances like supply chain resilience.

supplier-negotiations-white-paper

By honing in on these motivations and focusing on building a relationship, skilled negotiators can tailor their approach to ensure that solutions align with the core needs of the other party.

While BATNA might provide a safety net, it’s the relationships that drive successful, long-term outcomes. 

“While BATNA might provide a safety net, it’s the relationships that drive successful, long-term outcomes.”

That’s what RED BEAR’s training focuses on. With the principles of negotiation in hand, your team can fuse skill, empathy, planning, and the art of human connection together to maximize the value of deals and build lasting relationships.

The RED BEAR Methodology vs. BATNA

Here at RED BEAR, we approach negotiation training comprehensively, championing a methodology that focuses on the fundamentals of negotiation. Take the dimensions of negotiation we explored earlier. 

While the competitive dimension ensures the protection of one's interests, it's the collaborative dimension that champions long-term, mutually beneficial relationships. And when negotiations hit a wall, it's the creative dimension that allows for innovative solutions, fueled by understanding and trust built in the relationship. 

BATNA, on the other hand, can sometimes lead negotiators down a path that might neglect the relationship-building dimension and risk not only the present deal but also possible future collaborations.

RED BEAR equips your team with a comprehensive toolbox, making sure every individual isn't just reacting to situations but proactively steering negotiations toward the optimal outcome for both parties. 

“RED BEAR equips your team with a comprehensive toolbox, making sure every individual isn't just reacting to situations but proactively steering negotiations toward the optimal outcome for both parties.”

Unlike BATNA, RED BEAR offers sales and procurement professionals the building blocks to negotiate alternative negotiables that can lead to things like social proof and resilient supply chains — which provide essential support when disruptions occur.

This proactive stance stands in contrast to the reactive nature of BATNA, which centers on alternatives when negotiations don't pan out.

As influential as BATNA has been, it's essential to recognize that the landscape of negotiation, especially in the dynamic world of sales and procurement, constantly evolves. RED BEAR's methodology offers a research-backed perspective that addresses modern negotiation challenges while also prioritizing those timeless values of trust and relationship-building.

ultimate-guide-sales-negotiation-training-cta

Master Negotiation in Any Environment

While BATNA provides a safety net, true mastery in negotiation comes not from just having a backup plan but from approaching every discussion with a proactive strategy that’s rooted in relationship building and mutual trust.

RED BEAR Negotiation Training offers a comprehensive approach that prioritizes both the competitive and collaborative dimensions of negotiation so both parties can find creative solutions. When the self-interest (competitive) and relationship (collaborative) sides of the negotiation model are in balance, you can create healthy tension that leads to creative breakthroughs that result in win-win outcomes

Our training helps your team craft the most profitable agreements right from the onset.

While BATNA has its merits, forward-thinking negotiators will benefit from methodologies that look beyond alternatives.

Here at RED BEAR, our mission is to transform individuals into world-class negotiators. Our methods get results. In fact, for every dollar invested into our training, our clients get back, on average, $54. That’s the power of RED BEAR; That’s the power of effective negotiation training.

If you’re ready to get started using the same negotiation methodology as the top Fortune 500 companies, be sure to connect with the RED BEAR team today.

Fill out our contact form and we will be back to you in no later than one business day.

 

RELATED POSTS

In this episode of The Confident Negotiator Podcast, host Rob Cox and RED BEAR's Founder and CEO Chad Mulligan discuss the foundational pillars that have steered RED BEAR through a decade of success.
Mastering virtual negotiation skills has become increasingly important in our post-2020 world. As globalization and remote work have been normalized, the ability to negotiate effectively in virtual...

Subscribe for Exclusive News

Subscribe Here!

Follow Us