The best book on negotiation skills has to be “Never Split the Difference” by Chris Voss. Voss’ book helped me, among many other things, learn about ‘tactical empathy’: understanding the feelings and mindset of another person in the moment as well as what sits behind those feelings. One can the use this understanding to increase influence and overcome any obstacles to reaching an agreement.
I’ve since learned about ‘the Zone of Possible Agreement’ (ZOPA). Also referred to as the ‘Bargaining Range’, it’s the area are where two or more negotiating parties might find common ground, trying to find each other and strike a comprise.
The ZOPA stretches between two ‘points of resistance’. In a negotiation, each party will have its own limit to how much they want to concede to reach an agreement. I one heard an experience negotiator say that deals are often struck at the edge of a cliff, and understanding the other party’s point of resistance helps to understand where the ‘cliff’ starts.
If you’re negotiating about a single thing, e.g. the price of a house, the point of resistance often plays a significant role and is non-negotiable. For instance, if the property seller doesn’t want to sell for less than £800,000, then £800,000 is their point of resistance. If the property buyer doesn’t want to spend no more than £1,000,000, the ZOPA in the negotiation is £200,000.
Establishing an early understanding of both resistance points — the other party’s and your own — is vital if you want to negotiate successfully. It’s better to walk away from negotiations if you find that the other party’s resistance point or the size of the ZOPA doesn’t work for you.
In other words, negotiations can take place as long it’s within the ZOPA. Apart from points of resistance, it’s also important to consider any alternatives that the other party might be considering. If either party has a viable alternative to the current deal, they can use that as leverage. Building on my example of a property transaction: if the home buyer is looking at two very similar properties, they will have a viable ‘BATNA’, a Best Alternative To a Negotiated Agreement. The existence of a BATNA will affect the ZOPA, as it may well be much smaller if either party has viable alternatives, leaving little room for compromises.
Main learning point: Resistance points. Understanding your own resistance point and that of the other party is critical to any negotiation. It will determine the ZOPA and your room to negotiate.
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