The best book on negotiation skills has to be “Never Split the Difference” by Chris Voss. Tactical empathy was one of my main takeaways from “Never Split the Difference”: understanding of the feelings and mindset of another in the moment as well as what sits behind those feelings. This understanding helps increase your influence and overcoming any obstacles to reaching an agreement.
I’ve since learned about ‘the Zone of Possible Agreement’ (ZOPA) or ‘Bargaining Range’, the area are where two or more negotiating parties might find common ground. It’s also referred to as the bargaining range, the area where parties will try 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 experienced 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 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 the point of resistance. If the property doesn’t want to spend no more than £1,000,000, the ZOPA in the negotiation is £200,000.
Establishing your understanding of both resistance points – the other party’s and your own – early 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 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 smaller and less strong if either party has viable alternatives.
Main learning point: The Zone of Possible Agreement (ZOPA) stretches between two ‘points of resistance’, providing the negotiating parties with a clear bargaining range.
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