A walkaway point is a predetermined limit or position that negotiators define before entering a discussion, negotiation, or auction. It represents a boundary – either a “must get” outcome they need to achieve or a “must avoid” situation they cannot accept.
Essentially, it's the point at which a party is prepared and willing to walk away from the negotiation rather than accept terms that fall below their minimum acceptable level or exceed their maximum acceptable cost. This concept is also referred to as a limit point or position.
Understanding the Walkaway Point
Defining your walkaway point is a critical step in preparing for any negotiation. As the reference highlights, it's a position they "must both believe and upon which they must be willing to walk away in a negotiation." This isn't just a preference; it's a firm line in the sand.
Key Characteristics
- Defined Beforehand: It's established before the negotiation begins, preventing impulsive decisions under pressure.
- Clear Limit: Acts as a bottom line ("must get") or a maximum threshold ("must avoid").
- Commitment Required: The negotiator must genuinely believe in this limit and be prepared to enforce it by ending the negotiation.
- Not Public: Typically, this point is kept confidential from the other party.
Why is the Walkaway Point Important?
Knowing your walkaway point provides clarity, discipline, and power in a negotiation. It helps negotiators:
- Avoid agreeing to unfavorable terms out of desperation or fatigue.
- Stay focused on their core objectives.
- Determine when the negotiation is no longer beneficial.
- Increase confidence, as they know their boundaries.
Examples in Practice
The concept applies across various scenarios:
| Scenario | Walkaway Point Example (Must Get) | Walkaway Point Example (Must Avoid) |
|---|---|---|
| Buying a Car | A final price no higher than $25,000. | A monthly payment exceeding $400. |
| Selling a House | A minimum offer price of $300,000. | Contingencies the seller cannot meet (e.g., buyer's financing fails). |
| Job Offer | An annual salary no less than $70,000. | Accepting a job that requires relocation they cannot do. |
| Business Deal | Securing a minimum contract length of 3 years. | Granting exclusive rights in a market they want to serve themselves. |
In each case, if the terms offered cross the "must avoid" threshold or fail to meet the "must get" requirement, the party is ready to walk away from the table.
How to Determine Your Walkaway Point
Setting this limit requires preparation:
- Identify Your BATNA: Determine your Best Alternative To a Negotiated Agreement. What will you do if you don't reach a deal? Your walkaway point should be slightly better than your BATNA.
- Understand Your Needs vs. Wants: Clearly distinguish between what is essential ("must get/avoid") and what is merely desirable.
- Research: Understand market value, costs, and the other party's potential position if possible.
- Gain Internal Alignment: If negotiating on behalf of a group or organization, ensure everyone agrees on the walkaway point.
By establishing this firm boundary before engaging, negotiators ensure that they make rational decisions aligned with their interests, rather than being swayed by the negotiation process itself.
