This time of year, we’ve probably become experts at negotiations. Whether we haggle with a street vendor for a lower price on jewelry or convince our spouse he should make the potatoes this year, there are itty bitty holiday negotiations happening everywhere.
This comes at a huge benefit to an MBA bride. To get the best deal for their weddings, business brides need to practice effective negotiating skills in every facet of life. What better time to start than around the holidays?
When you start practicing negotiations, be it for the holidays or with wedding vendors, there are three crucial elements you should keep in mind for each party in the negotiation:
1. Best Alternative To a Negotiated Agreement (BATNA)
This is the best plan B if plan A fails. You should consider this for both you and the opposite party you are negotiating with. For example, when ordering flowers, if you don’t go with one vendor, you will most likely go to another. But also keep in mind what your opponent will do – if you don’t hire them for the service, what is their next best alternative? Keeping your next best choice and the next best choice of your opponent will make you more aware of the opportunities that are outside of the agreement and also keep you sane. Having a plan B is like insurance for us all.
Its easy to identify our own Plan B, but for vendors it may be more difficult. If you have enough time, vendor’s plan B is typically to be hired for another event. But if you’re closer to the date of the wedding and the vendor has no other parties booked that day, you may have more negotiating leverage.
2. Reservation Price
–The reservation price is the price at which you could equally agree or walk away from a negotiation. Typically, your reservation price is the very highest amount you’d be willing to pay. For your vendors, its the very lowest amount they’d be willing to accept for their services.
Being aware of both your reservation price and your opponents reservation price will help you identify if you can negotiate. An example, let’s examine the scenarios below.
In scenario 1, if the bride is not willing to pay more than $10 for a service (her reservation price), but the vendor wouldn’t accept anything less than $11 for his services (his reservation price), the bride and the vendor will not be able to negotiate because there is a negotiation gap over which they can not meet.
In scenario 2, if the bride is not willing to pay more than $12 (her reservation price) and the vendor is not willing to accept anything less than $10 (his reservation price), there is room for negotiation because the negotiation gap is bridged between $10 and $12.
Identifying your reservation price is easy – you know what price you’d walk away from. But identifying the vendor’s reservation price is significantly more challenging because very rarely will a vendor give you their actual reservation price. You can look at online forums, ask friends to make ghost calls to the vendor for pricing, or flat out ask the vendor what price they wouldn’t be willing to go below to identify the vendors reservation price.
3. Target Price
The target price is the price point you aspire to. Both you and your negotiating opponent will have a target price. Because the target price is the most preferred outcome, yours will probably be low and the vendors will be high. Be sure to keep target prices ambitious, yet realistic. As an example, if you know renting a bus to shuttle guests between your venue and hotel costs the bus company $300 (paying the driver, gas, vehicle wear and tear, etc), you shouldn’t make your target price $50.
Identifying your and your vendor’s BATNA, reservation price, and target price will make you a more aware negotiation-savvy bride. Have a great negotiation experience? Share your thoughts in the comments below.