Resistance point negotiation is often considered one of the worst positions to be in; however, resistance points are a helpful metric when evaluating an offer or solution. A resistance point is often discussed within the larger framework of the best alternative to a negotiated settlement as the farthest a party will be pushed in one direction. When parties are bargaining around this point, it becomes a less likely deal, and the parties are less likely to leave feeling accomplished, even if they leave with a deal.
Understanding the resistance point, why negotiating around it threatens possible outcomes, and how to avoid bargaining around it will help parties taking part in a negotiation feel more confident in their decisions and negotiate better for their position. It will also help add flexibility to the bargaining process and provide limited circumstances where the parties may see the value in using a resistance point.
Defining a Resistance Point
A resistance point is when a party begins to resist the proposed solutions because they are outside their agreement zone. It is often a point in distributive bargaining or negotiations where the parties attempt to control the most or the least amount of money. The most common example of distributive bargaining is a sale where the only issue is the price. The seller’s resistance point will mark the low end of the price they will accept, and the buyer’s resistance point will be at the high end of the price they will be willing to pay.
A party must identify their best alternative to a negotiated agreement and target point to understand resistance.
- BATNA: The best alternative to a negotiated agreement is the best possible outcome for a party if they cannot procure an agreement in negotiations. This establishes the bottom line for the party. If the party has a good chance outside of an agreement, they are less likely to settle for a poor agreement. If a party does not have good other options, they may be willing to accept a poor agreement.
- Target Point: A target point is where the party wants to end the negotiation. This will establish where a party will begin to move into negotiation.
Both a BATNA and a target point will influence where a party’s resistance point is. The target point will be significantly higher than the resistance point, but once a party has to move beyond their target point, they will begin to feel resistance. The BATNA will influence how quickly a party will walk away when the negotiations approach the resistance point.
Bottom Line vs Resistance Point
When discussing a resistance point, it is easy to see the resistance point as the bottom line in a negotiation; however, a bottom line is often a hard cut-off defined by the BATNA, while a resistance point is a point in a negotiation when the party begins to feel resistance to the negotiated agreement and will need to find value outside of the pure negotiations. Bottom lines will often halt negotiations and block agreements. Resistance points will slow negotiations, but they open the door for discussions that involve possible areas outside the strict distributive bargaining.
How to Avoid Resistance Points
Increasing value is the best way to change the resistance point and move the negotiations to a more acceptable range. This can be through various options that help the parties see the other options to make an agreement more palatable. Offering other perspectives is always a helpful tactic. When negotiating, choosing to find ways to add value can help increase the chances of leaving with a negotiated agreement closer to a target point than a resistance point. Some ways to add value include:
- Exchanging Information: One way to increase the value of a negotiation is to exchange more information with the other party. This can be information that makes a position look more appealing, such as comparing the offer to the retail value of an object or finding a similar case where the offer was around the same place. This may help the other party move closer to the target point and away from the resistance point.
- Continuing Business: One way to add value to a deal is to offer to make the deal the start of an ongoing business relationship. This can mean returning to buy similar or accessory products or agreeing to sell more of a similar product at the same price. The continuing relationship will add value to the price.
- Timelines: Another way to increase value is to shift the timeline, either adding time or moving the timeframe up if that is what the party needs to meet the offer. Time is money, and finding more or less of it can help a party be more agreeable to a position.
The key to adding value without losing money is to evaluate what the other party needs and find a way to increase that without losing value.
Final Thoughts
Effective negotiation is key to reaching successful negotiations, settling differences, and adding value. The resistance points are the points in the negotiation when the parties are more likely to walk away. Hitting one of these points will often increase the chances that a party will walk away and fail to find an acceptable agreement. However, this can be avoided when the parties understand the target point and the BATNA, how they influence the resistance point, and how to add value to their offers. Doing so will keep the negotiations going and encourage the parties to create an agreement that works well for everyone.
Contact ADR Times to learn more about resistance point negotiation, negotiation strategies, conflict resolution, and more!
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