“Interest-Based Bargaining How To Avoid Loss vs. Risk And Increase Negotiation Skills” – Negotiation Tip of the Week

“To make interest-based bargaining more appealing in negotiations, demonstrate the benefits of its appeal.” -Greg Williams, The Master Negotiator & Body Language Expert

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“Interest-Based Bargaining How To Avoid Loss vs. Risk And Increase Negotiation Skills”

People don’t realize they’re always negotiating.

Interest-based bargaining, also known as interest-based negotiation, is a negotiation strategy focusing on identifying the interests of all parties to find mutually beneficial solutions. This strategy emphasizes relationships by emphasizing the understanding of each party’s interests versus their positions.

Knowing how to use interest-based bargaining is essential to your negotiation success. Because some negotiators approach negotiation from a win-lose perspective, they win if you lose. That mindset often leads to unproductive discussions, bruised feelings, and deals parties seek to pick apart after concluding the negotiation.

In this article, I discuss how you can use interest-based bargaining to avoid protracted negotiations while weighing the pros and cons of loss versus acceptable risks.

Risk Versus Loss Mindset – Knowing The Difference

From a negotiation perspective, it is essential to understand the difference between a risk versus loss mindset. That pertains to your thought process and that of your opposite. Because the mindset one adopts during the negotiation will determine the flow of the engagement.

When a negotiator negotiates with a loss mindset, it can lead that person to make concessions to avoid a loss. That individual can also become unmovable in some positions. Contrasts that against the individual who takes risks to see what they can obtain while not crossing a line.

Interest-based bargaining can help you avoid either dilemma because neither party places the focus on themselves. Instead, they put it on the interests of the other party.

Interest-Based Bargaining Process

1. At the start of the negotiation, let the other negotiator know that you would like to conduct the negotiation based on the interests of both parties, not the positions. For clarity, define the difference between positioning versus interest-based negotiations (i.e., a negotiator wants ‘A’ versus why they want ‘A,’ along with why they want it and need it).

If both parties agree to this process, they set a positive tone for the negotiations, which should be more conducive to a cooperative engagement. Both negotiators will be working from a win-win perspective.

2. With the agreed understanding of how you will negotiate, each side should state their interests. Since interests can contain aspects of intangibility, you may have to dig deep to uncover them. But, to ensure a successful engagement, you must discover as many as possible.

Do that by asking probing questions, using phrases like, what does/will that mean? Why do you want that? Are you willing to trade it for something else? Again, the more you can uncover the sources behind why your opposite wishes to obtain an outcome, the more insight you will have about how all parties can work to achieve what the other seeks.  

3. After you and your counterpart have identified both parties’ interests, you can create a range of options that address those interests. You can adopt a ‘what if’ mindset during this process. Think without boundaries during this phase. Gear your efforts towards thinking creatively.

4. Once both parties have agreed on options that may address their interest, evaluate them. Be mindful of your disposition as you explore these possibilities. Do not become irate during this process, and seek to ensure the other negotiator’s mood stays in check.

You must be cautious during this step because, at this point, negotiators can easily slide back into position-based negotiation. When all parties can agree on the options that will address their interest, you will be well on your way to a successful negotiation outcome.

Overcoming Challenges To Interest-Based Bargaining

While interest-based bargaining can allow negotiators a framework for more mutually beneficial negotiations, challenges can arise that threaten the process. If you sense that begins to occur in your talks, consider the following to get things back on track.

1. If you sense either you or the other negotiator begins to slip out of interest-based bargaining mode, remind yourself or them that you have agreed on solutions that meet your mutual interests. Try not to have new objections introduced at this time. But if they are, agree on the ones that serve all parties and ask if additional concerns need addressing.

For example, if the other negotiator raises concerns about payment, you might remind them that you discussed that. And cite the solution. Then, ask if there are any other concerns about that. You do not necessarily want to introduce new objections, but you want to settle any lingering ones. 

2. Think about the way both parties are thinking. If you sense an interruption may occur in the free flow of solution-solving, suggest all parties think objectively versus subjectively. With objective thinking, negotiators emphasize the well-being of all parties versus their interests, which is subjective thinking.

To enhance this process, use an established source as a reference to anchor as proof of how a solution might occur; point to a source that both parties agree on for that purpose.


In traditional negotiations, negotiators can find themselves locked into positions – you want this, I want that. That turns the negotiations into a back-and-forth, with each side becoming more entrenched in their position.

With interest-based bargaining, or interest-based negotiation, negotiators focus on the other parties’ perspectives to gain insight into their interests and sources that motivate their actions – they do so to uncover the reasons for their opposite’s actions – what is behind their motivation.   

Interest-based bargaining is a negotiation strategy that can help parties reduce the risks of a failing negotiation while avoiding loss. Byidentifying interests, being creative, using objective thinking, focusing on mutual benefits, and avoiding taking positions, negotiators can shift the focus from positions to interests. That will allow the negotiation to flow more effortlessly. And everything will be right with the world.  

Remember, you’re always negotiating!

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After reading this article, what are you thinking? I’d like to know. Reach me at Greg@TheMasterNegotiator.com

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