BATNA or Bust: Why Agile Negotiators Always Define Their Plan B

Jim Bergman

In commercial contract negotiations, confidence is currency. But confidence without a BATNA -your Best Alternative To a Negotiated Agreement – is just bravado.

A well-prepared negotiator enters every conversation with a clear sense of their fallback. Not because they want to walk away – but because they can if the deal turns toxic.

What Is a BATNA?

A BATNA is your best course of action if a deal can’t be reached. It’s not a threat—it’s your reality check. It gives you:

  • Clarity on your lowest acceptable terms
  • Leverage when a counterpart pushes too far
  • A grounded view of when to say “no”

Without a BATNA, you’re negotiating on hope. With one, you’re negotiating with purpose.

Why Every Negotiation Strategy Must Define It

  1. Sets the Floor
    Your BATNA helps establish your walk-away point – what terms you won’t accept under any circumstances.
  2. Prevents Bad Deals
    A clearly defined BATNA stops you from accepting unfavorable terms out of desperation or pressure.
  3. Improves Leverage
    The better your BATNA, the more confident (and less desperate) you appear – affecting how much the other side is willing to give.
  4. Guides Concessions
    You’ll know what you can trade away because you understand the value of your alternatives.
  5. Sharpens Internal Alignment
    Defining your BATNA forces cross-functional teams (finance, legal, ops) to agree on the thresholds that matter.

How to Develop a BATNA

  • Explore Alternatives
    Can you delay the deal? Work with a different supplier? Build in-house instead?
  • Quantify It
    Assign value, cost, risk, and time to your alternatives. A vague fallback isn’t helpful – real options are.
  • Stress-Test It
    Ask: Is this BATNA realistic? Do I control it? Would leadership support it?
  • Update as You Go
    Market shifts or internal changes may improve or weaken your BATNA – so revisit it regularly.

What Happens Without One?

  • You overcommit too early
  • You make concessions without limits
  • You get locked into deals that hurt your business
  • Worst of all – you lose sight of your “why”

A commercial contract isn’t a win if the cost is greater than the alternative.

Final Thought: Confidence Comes From Knowing You Can Walk

The best negotiators don’t bluff – they prepare. A BATNA isn’t a threat to the deal. It’s a safety net, a compass, and a secret weapon. Define it. Respect it. Use it.

Your thoughts?

Unknown's avatar

Published by Jim Bergman

Jim Bergman is a commercial contract professional with global experience spanning the USA, Latin America, UK, Europe, China, South Korea, Japan, India, SE Asia, the Middle East, Africa and Australia. He has worked on a wide range of direct and indirect spend categories in numerous sectors, developing a deep knowledge of services, goods and technology procurement and sales. Across this wide array of commodity and services experience, Jim has found the keys to success in maximizing value for money through customer-supplier relationships founded on innovative category management and strategic sourcing practices, key performance metrics and measures, as well as Total Cost of Ownership principles and collaborative contracting tenets. He has shared his knowledge through advisory engagements, as well as in developing and delivering training programs both on-line and in classrooms, in both open-enrollment and internal environments. Jim has assisted his clients through all phases and steps of contracting, negotiation, strategic sourcing and bidding processes, demonstrating value generation in excess of $250 million. His audiences and clients have included over 7,000 attorneys and commercial professionals students from over 1,000 corporations and public-sector entities.

Leave a comment