Negotiation & Pitch: key terms, formulas and examples
Negotiation is solving a shared problem. Know your BATNA and walk-away point, anchor with a first offer, trade concessions and aim for win-win deals.
Example
Your best alternative is a rival supplier at 90, so you won't pay more.
Takeaway
Prepare alternatives before you talk numbers.
Key terms
- BATNA
- Your best alternative if a negotiation fails.
- Upselling
- Persuading a customer to buy a pricier version or add-on.
- Cold calling
- Contacting potential customers who have not asked to hear from you.
- Value proposition
- Why a customer should choose your product.
- Anchoring
- Making the first offer so it shapes the rest of a negotiation.
- Win-win
- An agreement that benefits both sides.
- Counteroffer
- A reply to an offer that changes its terms.
- Concession
- Something you give up during a negotiation.
- Closing the deal
- The final steps to get the customer's commitment.
- Walk-away point
- The worst terms you would still accept.
- Zone of possible agreement
- The range where both sides can say yes.
- Negotiation leverage
- The power to influence the outcome.
- Deadlock
- A point where talks cannot move forward.
- Mediation
- A neutral person helping parties reach agreement.
- Trade-off
- Giving up one thing to gain another.
Formulas
Profit margin(R − C) ÷ R × 100
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