Knowing your own BATNA
Let’s go back to the example of your potential job offer. Imagine you’ve negotiated a little bit, and the company has come back with $80, 000, stating that this is their highest offer. You, unsatisfied, begin to look for job opportunities that may pay $95, 000 and upwards.
In this example, failing to notify your potential employers of other possible opportunities has pigeon-holed you to a salary with which you are unsatisfied. You may, however, accept this salary, tired of job searching and worried that this is the best offer you can get.
For this reason, doing as much research as you can prior to your negotiations would help you out. Say you’d like to work at the original company—Company A—but you’ve also interviewed at Company B, which is offering you over $100,000. In this case, telling Company A about your potential other opportunities may encourage them to raise your prospective salary. They may now see you as greater value to their company, as a result of your increased confidence throughout the hiring process as well as your coveted offers from other suitors.
Furthermore, in this scenario, you can be more flexible with your choices and not have to leave negotiations feeling defeated. Even if you do choose to accept the lower salary for better job satisfaction, you can know that you did so while having your best other options in mind—rather than walking away, eyes closed, from a world full of opportunities you may know nothing about.
On the other hand, of course, if you do some research and find out that you likely could not make more than $75, 000 at this stage of your career, that is also helpful information—it would help you to accept Company A with gratitude and be satisfied that you’ve accepted your best option.
“With one offer in hand, you are much better equipped to assess the merit of a new offer.”
—William Ury and Roger Fisher, Getting to Yes: Negotiating Agreement Without Giving In
Knowing their BATNA
Knowing the other party’s BATNA is also helpful as a starting point for a negotiation. If you know that the other side’s best alternative to your offer is $40,000, you can offer only $42,000 or $45,000 as opposed to your potential $50,000 offer. In this way, you may be able to get more out of the negotiation by asking your partner to upfront when you begin negotiating about their other potential opportunities.
If you go really far, you may even take steps to weaken the other side’s BATNA. When real estate agents ask their clients to commit to working exclusively with them, for example, they weaken their clients’ best other alternatives by not allowing them to bring in other agents who may offer more viewers or better sale prices. Delaying or moving up a negotiator’s date of decision may also work to weaken the other team’s BATNA, depending on the circumstances.