ARTICLE

How to Manage a Sales

Negotiation to Your BATNA
The #1 essential rule of sales negotiation is Always Be Willing to HOW TO FIND YOUR BATNA
Walk Away. When it comes to a sales negotiation, you might have several
alternatives to the agreement. But there’s only one that’s the best:
You know when you should walk when you know your BATNA, or
your BATNA. Think of it like your Plan B.
best alternative to a negotiated agreement.

When you’re feeling calm, clear-headed, and confident, you’re

more likely to be a successful sales negotiator. Yet, anxiety is the
most common emotion associated with negotiations, and anxious BATNA
negotiators don’t perform well. BEST ALTERNATIVE TO A NEGOTIATED AGREEMENT
So how do you decrease anxiety and increase success? Be
indifferent to the result of the sales negotiation. This doesn’t
mean you don’t want the sale. You can want the sale, but you can
never need it—or be perceived to need it. You want to figure out what your Plan B is before negotiating to
avoid making or taking an offer that’s worse than your BATNA—or
This is something top-performing sales negotiators know: they’re rejecting an offer that’s better than your BATNA.
twice as likely as the rest to be willing to walk away from the deal.
To estimate a BATNA, analyze the value of the alternative as
specifically as possible.
FACTORS RELATED TO WILLINGNESS TO WALK
BATNA EXAMPLE
I/we understood the
50% Management consultant “A” was negotiating with a potential client
power and leverage
13% for a month-long engagement. The solution had been agreed upon
held by each side
and she knew it would take her full-time effort for the month.
I/we had a good She also knew she was unlikely to have any other work that month.
33%
understanding of the Her normal monthly fee was $30,000 USD. If she didn’t take this
12%
buyer’s BATNA work, she’d get nothing. The buyer offered her $10,000 USD and
wouldn’t budge higher. Believing something is better than nothing,
I/we knew our best the consultant took the work.
38%
alternative to a
19%
negotiated agreement $30,000 SELLER FEE - $10,000 BUYER OFFER = $20,000 LOSS

Another consultant, “B,” was in the exact same situation.

I/we were willing to 28% Fortunately, she determined that her best alternative was to focus
walk away from the deal 13% the full month on sales activities. She knew if she could set up 15
meetings, she’d usually win at least two new clients worth $120,000
USD, plus she’d open up conversations for months to come.
Top Performers The Rest
She also analyzed the risk of accepting a client at a significantly
lower fee, ruining her chance for repeat business at good rates.
Being willing to walk is an incredibly freeing feeling. If the sale
doesn’t happen—or it can’t happen at terms favorable to you—no Her BATNA was $25,000 USD, $5,000 USD less than her typical fee.
big deal. In fact, the faster you learn this the better, because then She offered this to the buyer, but with a trade of a named case study
you can free your time to focus on more fruitful sales activities. if she met the success criteria.

Being willing to walk and knowing when you should walk gives you The buyer declined.
a sense of control, which is critical for your ability to negotiate a
$30,000 SELLER FEE $25,000 PLUS NAMED CASE STUDY -
favorable outcome. BUYER DECLINE = $0 LOSS + TIME TO PROSPECT

Which outcome would you prefer? The $20,000 loss or $0 loss?

© RAIN Group
How to Manage a Sales Negotiation to Your BATNA

Here’s a three-step process you can use to determine your BATNA. You may also be able change the buyer’s perception of their BATNA.
For example, if you share ideas the buyer isn’t aware of, you can
1. Identify alternatives. Brainstorm what your alternatives will potentially reduce the value of their BATNA and increase their desire
be if the negotiation doesn’t result in an agreement. As a to reach an agreement with you.
seller, your alternatives might include pursuing a different
opportunity, working on prospecting activities, or developing
new work for existing customers. Consider what will help you
reach your goals in the long-term.
WHEN SHOULD YOU WALK?
2. Select the best alternative. After brainstorming, identify
Move Forward
which alternative best meets your high-priority objectives.
That’s assuming you know what your priorities are. Reference Value of agreement > Value of no agreement to each party
your Goal Setting Worksheet and determine the activities that
will help you achieve them. Walk
Value of no agreement > Value of agreement for either party
3. Improve your BATNA if possible. Research the alternative
and see whether there’s anything you can do to strengthen it.
For example, if you walk away from one sale and you think you
can close two other opportunities for a certain dollar amount, After you assess both your BATNA and that of the buyer, you’ll know
is it possible you could close three instead? Or increase the when you should walk. If the value of agreement is greater than the
average size of the sale? value of no agreement for both of you, you’ll move forward. If the
value of no agreement is greater for either of you, you won’t.
Don’t just analyze your BATNA; consider the buyer’s as well. Seeing
the negotiation from the buyer’s perspective can increase your sense Get the analysis right, and you’ll feel more confident and calm about
of control and confidence. While it’s unlikely you’ll know their BATNA negotiations, create and accept only good agreements for you and
with certainty, you can make some educated guesses based on your your buyers, and achieve better outcomes all around.
conversations and analysis.

Discover positional tactics buyers use in sales negotiations © RAIN Group