By Dr. Nguyen Vu Thuan – PureHigh
In the growing landscape of Modern Trade and Key Account Management (KAM), negotiation power is often misunderstood as the ability to be the ” strongest and loudest” voice in the room. However, research from the world’s leading negotiation schools —Harvard (PON) and the Wharton School—reveals that true leverage is derived from your BATNA: Best Alternative to a Negotiated Agreement.
Your BATNA is not just a backup plan, it is the fundamental benchmark against which any potential deal must be measured. If a proposed agreement does not offer more value than your BATNA, you have the power—and the logical obligation—to walk away and discuss another deal.
1. The Foundation: The BATNA and Reservation Value
A BATNA is the course of action you will take if a negotiation ends in an impasse. In Modern Trade, this might involve accelerating to higher level meetings or shifting promotional spend to a different channel, prioritizing a different retail partner, or accelerating direct-to-consumer (D2C) initiatives.
From your BATNA, you derive your Reservation Value (RV)—the “walk-away” point. While your target is what you hope to achieve, the RV is the least favorable point at which you will still accept a deal. Negotiators who fail to define their BATNA often fall into the “Agreement Bias,” accepting terms that are actually worse than their other outside options.
2. Strengthening Your Leverage Before the Negotiation
Leverage is dynamic, not static. To strengthen your position, you must actively improve your alternatives before the discussion begins:
- Explore Diversification: A KAM’s BATNA is weak if 80% of their volume is tied to one retailer. Power increases when volume is distributed across multiple retailer platforms or channels.
- Improve the Alternative: If your alternative is to sell through a secondary channel, take steps to make that channel more profitable before the contract renewal with your primary account.
- Analyze the Opponent’s BATNA: Leverage is the “relative cost of saying no.” If the retailer has no other competition supplier that can provide your level of brand equity or category growth, their BATNA is weak, which inherently strengthens yours.
3. Strategic Application: Using BATNA as Power, Confidence and Effectiveness to create Value for You and the Retailer
Successful negotiators do not necessarily reveal their BATNA; they use it to anchor their confidence. According to Prof. G. Richard Shell (Wharton), leverage is based on the other party’s perception of your alternatives.
If you have a strong BATNA, you can negotiate from a position of “Positive Leverage.” You can signal your willingness to work on creating more value for you and the retailer and if the deal is too bad you can walk away without being confrontational. Conversely, if your BATNA is weak, your strategy should focus on “Normative Leverage”—using the retailer’s own standards, past promises, or category data to show why your proposal is the most logical choice for their own KPIs.
References
- Bain & Company (2024). Next-Generation Key Account Management.
- Fisher, R., Ury, W. and Patton, B. (2011). Getting to Yes: Negotiating Agreement Without Giving In. 3rd ed. New York: Penguin Books.
- Harvard Program on Negotiation (2025). BATNA Basics: Boost Your Power at the Bargaining Table.
- McKinsey & Company (2025). Leading consumer goods companies with commercial excellence.
- Shell, G. R. (2006). Bargaining for Advantage: Negotiation Strategies for Reasonable People. 2nd ed. New York: Penguin Books.
