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Like, Intent, Breakpoint — Closing Deals in Negotiation
For this article, we will tell you about our very own strategy called “like, intent, breakpoint” which will help you get what you want to achieve in negotiation.
Once you are done reading this article, you will be able to utilize the “like, intent, breakpoint” strategy in your upcoming negotiations. Thus, allowing you to achieve your desires and avoid any unsatisfactory negotiation.
Like, Intent, Breakpoint: What is it?
Like, intent, breakpoint strategy is an approach that defines what you like to achieve, what you intend to achieve, and your breakpoint in the negotiation.
For you to understand it more, we will discuss each three further:
The “like” talks about what you like to achieve or your desired result that you could reasonably expect to achieve in the negotiation.
Additionally, it defines what you and the other party hope to achieve. Thus, you should be thinking about the quantity at this stage. This is what you would want to achieve in the very best of circumstances if everything goes possibly in the way you expect the negotiation to be.
The “intent” makes you answer about the reasonable result that you feel about the negotiation based on the available information.
By recognizing that there are some objectives that you are unlikely to achieve, then it follows that you will have to abandon or scale back some of those as a result of the negotiation process.
This is only realistic. After all, if both you and the other party assume that all your objectives are essential and one must make a concession, then your negotiation is likely to end in a deadlock.
These objectives represent what you intend to achieve under normal circumstances, which is a much more realistic list. Hence, you will still be pleased to gain an agreement on these terms.
For example, you might expect to gain agreement from your supplier for 75% of the components that you originally wanted (remember you were shooting for the moon, weren’t you?).
Perhaps these would be supplied at a 20% discount off the listprice (you were looking for 25%) and with a free maintenance package thrown in for the first year.
You may have a considerable amount of flexibility in this area, especially when there are several variables with which you can flex your requirements such as
The price, quality, quantity, delivery lead time, delivery schedules, add-on services, maintenance packages, and training.
The “breakpoint” talks about the least desirable result that you will be willing to accept in the negotiation. To put it simply, it is the thing that is the absolute minimum of what you can settle for.
You should take note that there will be some scenarios where the deal is simply not good for you and it will be beneficial for you to just walk away from that agreement.
By knowing these three before entering any negotiation, you will be able to weigh what you like to achieve, what is your walk-away point, and what you really think you can achieve from the negotiation.
How Can You Determine Like, Intent, Breakpoint in Negotiation?
When forming a personal negotiation strategy, you must conduct a quantitative and qualitative overview of your opening, like, intent, and breakpoint in your upcoming negotiation.
You must ensure that you have these ready before entering any negotiation. We will now teach you how to use negotiation anchoring tactics as an opening in negotiation.
Negotiation anchoring, which is a tactic in opening the negotiation, is usually misused and misunderstood. This is due to the fact that many assume that the negotiator who makes the first move wins. However, it is not necessarily true.
You must remember that every deal has a counteroffer. If you are on the other side of an anchoring deal, it is your job to quickly think of a counteroffer.
Negotiation anchoring is known for its focus on the first proposal as a reference point throughout the entire negotiation. To simplify, start strong!
This is because both you and the other party will heavily rely upon the initial offer or the opening bid price when one of you drops it. No matter how many discussions are dropped, the focus will go back to the initial offer.
Simply put, whoever makes the first move drops the anchor. From thereon, the one who dropped it has total control over the direction of the negotiation.
Avoiding Negotiation Anchoring Bias
If you initiate the negotiation with the anchoring tactic and you refuse to change the terms you initiated, then you are committing one of the most common mistakes in using this tactic called anchoring bias.
Taken from the word itself, you are already setting yourself on achieving what you want based on your first offer. You must avoid this at all costs as it will completely disregard the interest of the other party and will affect your reputation too as a negotiator.
If the other party initiates the anchoring tactic first, then you can immediately reject it if the other party is not showing any signs of compromising his/her offer. Also, if the deal is not worth the trouble anymore, you can respectfully reject the anchoring price and walk away. Only choose to return if they are willing to change the proposal that is something realistic.
A Personal Experience From the Founder of Procurement Tactics
I personally like to open my negotiations realistically and pragmatically. The majority of books and articles about negotiations will tell you to open extreme and come to a deal by making small steps toward the other party afterward.
I truly believe that if you have a good and open relationship with your suppliers, you should take the opportunity by agreeing not to start extreme. Opening extreme as a start of your negotiation will make sure you will lose a lot of time: it is not efficient. But, okay, opening extreme could be good for your result.
In many of my negotiations, I asked my suppliers, as a test, to open the negotiation with proposal 1 in a very pragmatic way. If they did, I mirrored and rewarded them by doing the same in my first proposal.
Suppliers that did not come with a realistic proposal can expect an annoying counter-proposal from me. Before any of your negotiations actually start, it is key to think of what your opening strategy will be, and if needed, to share this with your suppliers!
Reservation Price as Your Breakpoint
The reservation price can be defined from two different perspectives. For a seller, the reservation price is the minimum amount of money they are willing to accept before accepting the deal.
On the other hand, the reservation price is the buyer’s maximum price he/she could pay. Thus, it can be used as your breakpoint or walk-away point.
You may ask yourself, “how can I determine the reservation price in the negotiation?” First, you must determine the last price that you are willing to accept. You also need to know the reservation price of the other party which is the price that is acceptable for them.
Setting your reservation price too high and the other party will instantly walk out. However, setting it too low will cost you a lot and the other party may take advantage of you.
You must always remember to keep your reservation price to your team and yourself. Do not let the other party know what it is. If they knew, then you would be at a great disadvantage.
If you cannot get your expected reservation price, even after countless hours of discussion, then it is either you will make a concession or walk away from the negotiation.
In this case, you must use your trump card which is your BATNA. Your BATNA is your backup plan when things do not go as planned. If you do not want to close doors with the other party, then you can try getting a concession instead of leaving the negotiation table. Sometimes you have to lose a battle today in order to win a war tomorrow.
+ What is the like, intent, breakpoint strategy?
It is an approach that defines what you like to achieve, what you intend to achieve, and your breakpoint in the negotiation.
+ What is negotiation anchoring?
Just like the anchor in the boat, negotiation anchoring means focusing heavily on the first price as a reference point throughout the whole negotiation.
+ What is the reservation price?
It is the least price that you can get that will make you accept a negotiated agreement.
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