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Rapid technology advances and an uncertain regulatory environment are challenging healthcare supply chain leaders to be more innovative. For buyers and sellers of healthcare equipment, the introduction of new online marketplaces like the OpenMarkets Exchange gives innovators the ability to deploy best practices in new ways.
In this 7-part series, OpenMarkets is pleased to share key negotiation strategies that are directly applicable for stakeholders in the healthcare supply chain. Successfully deploying these best practices with modern technology is an efficient way for both suppliers and providers to improve the way healthcare equipment is bought and sold.
Topic 2: BATNA
In the first part of this series, we discussed how anchoring influences negotiation psychologically and how setting a low or a high first-offer can impact deal outcomes. In this second installment, we will discuss another key component of a negotiation process, the best alternative to negotiation agreement (BATNA).
Establishing your BATNA is one of the many pieces of information negotiators seek when formulating deal making and negotiation strategies*. It is possibly the single biggest influencer of bargaining strength when walking into a negotiation situation.
Healthcare equipment buyers should consider this example: If you are offered a hospital bed for $100, and another distributor quotes an equivalent bed for $95, then your BATNA is $95. With this information, you are now in a compelling position to bargain and understand why the offer is greater than your BATNA. Knowing BATNA not only gives you the confidence to get the best possible price, but also leads you to asking probing questions to understand all the components involved in a sale: delivery costs, maintenance costs, warranty information, etc. and be a better buyer.
BATNA matters for equipment sellers as well. For the individual sales representatives in the example above, their BATNA may be to walk away if the buyer requires a price under $100.
For experienced buyers and sellers, establishing a BATNA is routine and part of any negotiation preparation. The best practice lies in gaining empathy for the other side of the table, and figuring out their BATNA during negotiations.
Identifying all potential BATNAs for your purchase/sale and researching the likely BATNA for the other side of the deal can be a daunting task. The key is opening an efficient research and communication channel to all involved parties. If you’re ready to try a simple approach for this, consider The OpenMarkets Exchange as a new platform to put you in a better position to buy or sell equipment.
* Program on Negotiation at Harvard Law School: PON