“In business, you don’t get what you deserve, you get what you negotiate” ~Chester L. Karrass
International negotiation. If there’s one thing everybody knows about selling, it’s that serious negotiation starts when you and your customer sit down together to close a deal: Right? “Well, maybe…” The best salespeople start thinking about negotiation much earlier – sometimes even before they’ve made the first contact.
Negotiation is not a destination that you reach at the end of a sale, nor is negotiation about one party winning and the other losing. Negotiation is part of each step of the sales process, and not a one-time event. Salespeople need to find out the customer’s real interests, ASAP: Is it value, price, terms and conditions, or something else?
When you begin early in the sales process, you uncover the buying organization’s real interests and you learn the criteria on which their interests are based. Most important, you discover the deal-breakers & deal-makers and explore how both parties can win. Perhaps even more importantly, you discover ‘if’ both parties can win; after all, it’s far better to lose quickly and exit the situation, than to lose slowly…
In the article “Why Selling on Value and Negotiating on Price Does Not Work” by Grande Lum writes: A common scenario that a salesperson encounters during the final ‘close of the sale’ is when the customer says something like: “We (customer) are all ready to sign the Contract today, and we want to thank you for having invested four months with us to develop the terms. Now, the only thing I(customer) need you to do for me(customer) is to discount the final contract figure by 10% and it’s a done deal.” What’s the salesperson’s response to this time-tested classic?
Seasoned sales executives know from long experience that haggling on price and contract terms can be a costly tactical and ultimately strategic error, most of the time. Haggling can quickly become a self-destructive behavior and damage the customer relationship. In traditional selling the salesperson sells (that’s their job), and at the end of the selling work, then ‘negotiate’, or rather, ‘haggle’. On the other hand, an enlightened view of selling is that there is continuing negotiations from the moment we speak with a prospect, to the moment we close a deal, and beyond…
Rather than seeing negotiation as a transactional activity, we see it as transformational. The classic dividing line between negotiation and sales becomes intentionally blurred: We can’t negotiate without strong sales skills, and conversely, we can’t sell without strong negotiation skills. Negotiation, as a transformational tool, is essential for sales executives as they manage their sales forces, as they manage internal negotiations with all business functions within their organizations, and as they manage the critical customer relationships they seek to broaden, deepen and enrich…
International sales negotiation is an important and very complex process, and often not just between individual people, but between large delegations, each of which is well organized and where every person has a specialized and skilled work responsibility. A big trap in international selling lies in misunderstanding the culture of other countries, especially in the rules that they use to negotiate.
Whereas one country may emphasize politeness and integrity, another might use deception and coercive methods as a norm of negotiation, while being polite and friendly outside of the negotiation arena. An article in Wikipedia identifies the ‘distinctive negotiation behaviors of 15 international cultural groups’; here is a sample:
- Japan. Consistent with most descriptions of Japanese negotiation behavior, the results of this analysis suggest their style of interaction is among the least aggressive (or most polite). Threats, commands, and warnings appear to be de-emphasized in favor of the more positive promises, recommendations, and commitments. Particularly indicative of their polite conversational style was their infrequent use of ‘no’ and ‘you’ and ‘facial gazing’, as well as more frequent ‘silent periods’.
- Korea. Perhaps one of the more interesting aspects of the analysis is the contrast of the Asian styles of negotiations. Non-Asians often generalize about the Orient; the findings demonstrate, however, that this is a mistake. Korean negotiators used considerably more punishments and commands than did the Japanese. Koreans used the word ‘no’ and ‘interrupted’ more than three times as frequently as the Japanese. Moreover, no silent periods occurred between Korean negotiators.
- China (Northern). The behaviors of the negotiators from Northern China (i.e., in and around Tianjin) were most remarkable in the emphasis on asking questions (34 percent). Indeed, 70 percent of the statements made by the Chinese negotiators were classified as information –exchange tactics. Other aspects of their behavior were quite similar to the Japanese, particularly the use of ‘no’ and ‘you’ and ‘silent periods’.
- Taiwan. The behavior of the business people in Taiwan was quite different from that in China and Japan but similar to that in Korea. The Chinese on Taiwan were exceptional in the time of ‘facial gazing’ –on the average, almost 20 of 30 minutes. They asked fewer questions and provided more information (self-disclosures) than did any of the other Asian groups.
- Russia. The Russians’ style was quite different from that of any other European group, and, indeed, was quite similar in many respects to the style of the Japanese. They used ‘no’ and ‘you’ infrequently and used the most ‘silent periods’ of any group. Only the Japanese did less facial gazing, and only the Chinese asked a greater percentage of questions.
- Germany. The behaviors of the Germans are difficult to characterize because they fell toward the center of almost all the continua. However, the Germans were exceptional in the high percentage of self-disclosures (47 percent) and the low percentage of questions (11 percent).
- United Kingdom. The behaviors of the British negotiators were remarkably similar to those of the Americans in all respects. British people believe that most British negotiators have a strong sense of the right way to negotiate and the wrong. Protocol is of great importance. Some cultures may consider the British negotiation style as extremely cold and arrogant.
- France. The style of the French negotiators was perhaps the most aggressive of all the groups. In particular, they used the highest percentage of ‘threats and warnings’. They also used ‘interruptions’, ‘facial gazing’, and ‘no’ and ‘you’ very frequently compared with the other groups, and one of the French negotiators touched his partner on the arm during the simulation.
- Brazil. The Brazilian businesspeople, like the French, were quite aggressive. They used the second-highest percentage of commands of all the groups. On average, the Brazilians said the word ‘no’ 42 times, ‘you’ 90 times, and ‘touched one another on the arm’ about 5 times during 30 minutes of negotiation. ‘Facial gazing’ was also high.
- United States. Like the Germans and the British, the Americans fell in the middle of most continua. They did interrupt one another less frequently than all the others, but that was their sole distinction.
The differences across the national cultures are quite complex, and great care should be taken with respect to the dangers of stereotypes. The key here is to be aware of the kinds of cultural differences so that the Japanese “silence”, the Brazilian “no, no, no…,” or the French “threat” are not misinterpreted…
In the article “Equal Pain or Equal Gain? Negotiate for Win-Win” by Anne Stuart writes: The best salespeople start thinking about negotiation much earlier; sometimes even before they’ve made the first contact. Specifically, top performers prepare for those at-the-table talks by learning as much as possible about the other party’s needs and concerns: “You have to look for their underlying interests”. “You need to understand what their personal motivators are; what they’re really after”.
It’s equally important for salespeople to understand their own interests: As a salesperson, what is it you want to get out of the negotiation? Of course, the simple answer is selling that product or service. But the best salespeople tend to have bigger-picture goals, such as building the foundation for long-term new relationship or expanding an existing one, top performers achieve those objectives by equipping themselves with knowledge and information about the needs and wants of the customer.
Salespeople have a tendency to capitulate too quickly and in the spirit of trying to get the deal done; they discount too quickly or leave dollars on the table, which they didn’t need to do: They take shortcuts. It’s easier to just discount something than to go through further discussions to find new value, which takes far more salesmanship.
When salespeople capitulate on discussions involving prices, it’s typically because they haven’t explored the customer’s interests thoroughly enough. “If you haven’t discussed value, then any price is going to sound too high.” A successful salesperson can see beyond the smokescreen of price and rigidity. Be like a detective: Ask good questions. Based on the answers, suggest alternatives: It’s about being a problem-solver rather than just pushing a product…
Negotiation is a critical skill needed for effective selling and sales management. Successful negotiation requires compromise: Both parties must gain something and both parties must lose something. You cannot expect to defeat your opponent or “win” a negotiation by either the power of your negotiating skills or the compelling force of your logic. This is not to say good negotiating ability is irrelevant. In most cases, a range of possible outcomes exists.
A skilled sales person often can achieve a settlement near the top of the range. The evidence is overwhelming that cooperation is the surest road to successful settlement. Hostility, distrust, stubbornness, self-righteousness, conflict intensification, unjust demands, and attempts to gain unjustified advantages beget non-cooperation rather than concessions, and tend to cause a breakdown in the communication necessary to reach a settlement.
The key ingredient in cooperation, however, is mutuality; you cannot be unilaterally cooperative. If you are making concessions while your opponent is not, you are engaging in appeasement, not cooperative negotiation. Successful bargaining occurs only when you are prepared, both to be cooperative and to demand cooperation from your customer…
“You must be fully prepared to lose a great deal in order to make a great deal.”