Choose Your Lane: Why Contracting Success Hinges on Selecting the Right Negotiation Approach

Jim Bergman

Contracting is the final handshake of a business relationship – but the real story begins at the negotiation table. Behind every successful commercial agreement lies a well-calibrated strategy that knows when to take a stand and when to seek common ground.

At the heart of this decision? Choosing between positional and interest-based negotiation tactics. Your success could depend on it.

Positional vs. Interest-Based: What’s the Difference?

ApproachDescriptionCommon Scenario
Positional BargainingYou stake out a position and hold your ground, trading concessions to reach a deal.Price-focused supplier negotiations.
Interest-Based BargainingYou explore the underlying goals and motivations of both parties to create win-win outcomes.Strategic partnerships or long-term alliances.

Each method has its place – but choosing the wrong one can derail deals or miss out on hidden value.

Why the Right Fit Matters

Failing to align your strategy with the business context can lead to:

– Stalemates in rigid, defensive bargaining

– One-sided deals that erode trust or future collaboration

– Overlooked value levers like exclusivity, IP rights, or shared innovation

For example: pushing a hard-nosed positional stance in a joint R&D venture can come off as adversarial, while using interest-based negotiation in a high-stakes auction may be interpreted as indecisiveness.

How to Decide Which Path to Take

Ask yourself:

– What’s the power dynamic?

Are you in a buyer’s market or do you need this partnership to grow?

– Is this a one-off transaction or part of a long-term relationship?

Long-term contracts benefit from interest-based collaboration.

– What are the non-monetary terms at stake?

Scope, timelines, exclusivity, and risk sharing often require deeper alignment.

– Do you understand what the other party truly wants?

Price is rarely the only motivator – dig deeper into drivers like market access, brand alignment, or speed to execution.

Smart Strategy in Action

– Tech procurement: A cloud vendor negotiating SLAs might welcome interest-based trade-offs around uptime vs. support responsiveness.

– Manufacturing contracts: Suppliers in tight cost environments may expect positional haggling on unit pricing but could be swayed by volume commitments.

By intentionally choosing your approach – rather than defaulting to one – you can shape negotiations around real value, not just surface demands.

Final Word: Strategy Is the Contract’s Soul

Contracts aren’t just documents – they’re the living expression of a negotiation. If your strategy doesn’t match the moment, the deal risks becoming fragile or unbalanced.

So, before your next negotiation kicks off, take a beat. Are you about to lock horns – or build a bridge?

Your thoughts?

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Published by Jim Bergman

Jim Bergman is a commercial contract professional with global experience spanning the USA, Latin America, UK, Europe, China, South Korea, Japan, India, SE Asia, the Middle East, Africa and Australia. He has worked on a wide range of direct and indirect spend categories in numerous sectors, developing a deep knowledge of services, goods and technology procurement and sales. Across this wide array of commodity and services experience, Jim has found the keys to success in maximizing value for money through customer-supplier relationships founded on innovative category management and strategic sourcing practices, key performance metrics and measures, as well as Total Cost of Ownership principles and collaborative contracting tenets. He has shared his knowledge through advisory engagements, as well as in developing and delivering training programs both on-line and in classrooms, in both open-enrollment and internal environments. Jim has assisted his clients through all phases and steps of contracting, negotiation, strategic sourcing and bidding processes, demonstrating value generation in excess of $250 million. His audiences and clients have included over 7,000 attorneys and commercial professionals students from over 1,000 corporations and public-sector entities.

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