So what is the resistance point
in a negotiation and why is it important?
Okay well to start with the resistance
point is your walk away point for
any given interest or collection of
interest or issues at heart in the
negotiation.
Okay so if for example
if i'm not willing to take less than a
certain dollar amount say five dollars
for something i'm selling
that is my resistance point. I'm going to
walk away from the negotiation
not sell the item that i'm attempting to
sell
if I don't at least get five dollars for
it so again
it's your walk away point the point at
which you're willing to
leave the negotiation and not arrive at
a negotiated agreement
uh if that point is not met okay.
So anything above the reservation point in
theory yes I will
uh I will consummate a transaction to
sell
this item if
uh the the offer to purchase is above
the reservation point.
Okay so uh some things about the
reservation point first
that is your power in a negotiation if
another party understands your negotiate
your reservation point or you understand
their reservation point
you you are not going to concede
more value than that. You only arrive at
that point
plus maybe a nominal amount above it
or beyond it in order to reach an
agreement so you'll grab
more value in the negotiation than the
other person. Now you
may that is still a win-win for both
parties
if it's within yours on a potential
agreement greater than your reservation
point
and greater than the other party's
reservation point.
So that being said it's very important to
guard
or keep hidden whatever your
reservation point is the least that
you'll take for something
or the most that you'll pay for
something that type of thing. So keep
that guarded
if you want to claim more value in the
negotiation.
Okay another thing is uh oftentimes
people make emotional decisions
that they later regret during the
negotiation, so
a good thing to remember is if you set
your reservation point
up front you know what it is going in
you are less likely to make an emotional
decision that somehow alters that where
you take less money for something than
you originally were going to
that is it makes you less susceptible to
succumb to the tactics or strategy of
the other person
in order to gain more value in the
negotiation, so once again
uh its practice to set your reservation
point
before you start negotiating. Now an
interesting aspect we call it the the
goal setting paradox,
and basically what that is is when um
individuals focus
more on their their ideas or their
principles in a negotiation
than they do on their reservation point
or what they're willing to take
uh often people who focus more on their
ideas uh generally
or principles in the negotiation are
less content or less happy
with the results of negotiation than
people who focus just on the reservation
point.
That is so people who again are ha
are happier when they reach negotiated
agreements if their primary focus is not
principal or ideology
it is um on the interest at stake in the
negotiation okay.
So how do you set the reservation
point? Well to start with
it could be related to a number of
things, so
uh first you'll set off by it you'll
start out by identifying all the
interest or issues at stake in the
negotiation.
So once you've done that then you can
identify
the strength or priority of those
interests to you.
This is especially important when
you have multiple interests at stake
and you may have individual reservation
points for every individual interest
but you may also have a collective
reservation point that says if you don't
grab at least this much value
collectively across these interests,
and that's generally a better approach
because it allows for
the development of what we call
integrative negotiations which we
discuss in other videos
okay so the nature and the strength of
the interest at stake there
okay it will help you again identify
the least you're willing to take or the
most you're willing to give
in terms of value for individual or
collective interest.
Next what are your alternatives for each
inner
interest and what is the best
alternative
to arriving at a negotiated agreement
that is your BATNA. What is your BATNA?
Now
often time oftentimes your reservation
point is the same as your BATNA. So if
your next best alternative
uh is has certain you know
characteristics
then you will only take an alternative
in this current negotiation that is
better than that alternative all right
you will only be willing to accept
something better
than your alternative, so again that will
sometimes set your reservation point for
you
and say you know if i don't get better
then I can get elsewhere then i'm
walking away.
And then another thing to understand is
the cost of delay
the what will it cost you or the other
party if you are to delay and not arrive
in an agreement now
because sometimes uh situations are such
that
value diminishes the longer you wait or
the
more amount of time that passes type
thing and there can be a cost associated
with that.
So sometimes arriving at an agreement
stops the bleeding as they say
it cuts off the continued losses that
are happening in the situation, so
if you can identify those three things
nature and strengths of the interest
uh and prioritize them the BATNA's uh
for you and the other party in the
negotiation and then the cost of delay
for either of you uh that is the um you
are now armed
to set your reservation point.