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 what the resistance point is, why negotiating around it threatens a possible deal, and how to avoid bargaining around a resistance point will help parties taking part in a negotiation to feel more confident in their decisions and negotiate better for their own position. It will also help add flexibility to the bargaining process and provides limited circumstances where the parties may see the value in using a resistance point.
Defining a Resistance Point
A resistance point is a point at which a party will begin to resist the possible solutions proposed because they are outside of their agreement zone. It is most often a point in distributive bargaining or negotiations where the parties are attempting to control the most or the least of an 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 that they will be willing to pay.
To understand a resistance point, a party must also identify their best alternative to a negotiated agreement and their target point.
- BATNA: The best alternative to a negotiated agreement is the best possible outcome for a party if they are unable to 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, then they may be willing to accept a poor agreement.
- Target Point: A target point is where the party would like 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 negotiation 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 leave the door open for discussions that involve possible areas outside the strict distributive bargaining.
How to Avoid Resistance Points
The best way to change the resistance point and move the negotiations to a more acceptable range is to increase value. This can be through a variety of possible options that help the parties see the other options to make an agreement more palatable. When negotiating, choosing to find ways to add value can help increase the chances of leaving with an agreement closer to a target point than a resistance point. Some ways to add value include:
- Exchanging Information: One way to increase the value in 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 finding a way to increase that without losing value.
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 and how they influence the resistance point, as well as 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.