Tips to Navigate Cultural Differences in International Sales Negotiations
For many, treating others as you want to be treated is sound advice. However, when engaged in a sales negotiation with international clients, this could be problematic. In the United States, most share common cultural expectations. Of course, these vary by region. New Englanders differ from Southerners who are distinct from Midwesterners, etc. Despite this, most are aligned by rules of etiquette common to Americans. Internationally, however, these do not always translate. In fact, practices perfectly acceptable in the United States, such as pointing to indicate direction, could be rude and insulting in Asian countries. Our recent white paper The Ultimate Guide to Sales Negotiation outlines many traits, behaviors, and best practices when negotiating, but these were based on those shared expectations of Americans. As a follow-up, we offer these tips when negotiating with international clients:
Build Relationships or One-Off Deals?
Of course, preparation is always critical, but this is magnified internationally. Sellers must know how the culture they’re dealing with views relationships. In the United States, sellers benefit from building relationships over short-term sales. However, this is not the norm in other countries, According to author Jeswald Salacuse, 74 percent of the Spanish dealmakers he surveyed claimed their goal in a negotiation was a contract. However, a much smaller percentage of Indian executives (33 percent) shared that view. As he notes, this difference in approach may be why Asian negotiators, who view relationships as the goal, devote more time and effort to preliminaries.* This illustrates the importance of knowing the business models of the cultures with which you negotiate.
Adversarial Process or Win-Win Outcomes?
In The Ultimate Guide to Sales Negotiations, we note how many view a negotiation as adversarial, one side winning over the other. With consultative selling, however, it’s more advantageous to know the customer and cultivate relationships to achieve win-win outcomes for all parties. After all, a strategic partnership is more beneficial over the long run, so it’s in the seller’s interest to help buyers achieve their goals. Here, again, Salacuse’s survey yielded interesting results: While 100 percent of Japanese respondents viewed a negotiation as a win-win process, only 33 percent of Spanish executives took that view. However, according to Alliance Experts, Spaniards do in fact value relationships and may ask about your personal life.** Ultimately, sales professionals must research the cultural models with which they negotiate and adjust accordingly.
Personal style is another thing sellers must prepare for. Do your negotiating partners come from a culture that values an informal or formal process? In the United States, we tend to favor informal business transactions. This holds true in our preference for first names, and it also stretches into our dress and speech. Though some industries, such as banking and finance, maintain rigid dress codes of suits and ties, others have relaxed their requirements to business casual, like collared shirts and slacks. Of course, the idea of formal or informal will vary by culture. Salacuse notes Germans are more formal than Americans, and the Japanese would find the use of first names in an initial meeting disrespectful. Once again, negotiators must do their due diligence before meeting their international counterparts.
Different cultures have different ways of communicating. To be effective, sales professionals must understand whether the culture they are dealing with prefers a direct or indirect communication style. While a blunt, matter-of-fact approach may work with some clients in the United States, in other cultures, this can be seen as aggressive. Conversely, an indirect approach, in which evidence is presented gradually, can be seen as insincere. Salucuse tells how negotiations between Israel and Egypt were made difficult by the direct approach of the Israelis contrasting with the indirect approach of the Egyptians. Sellers should not only know the preferred style, but they should tailor their approach to best engage their clients.
View of Time
For many Americans, time is money. Perhaps, nowhere is this truer than in business, especially in sales. In the United States, whether it’s rushing from one client to another or being anxious to seal a deal before conditions change, the idea that time is against us is common. As anyone who has eaten in a restaurant overseas can tell you, this is not true in other cultures. In fact, once, in France, a colleague grew impatient with how long it took to get the check after a particularly delicious meal—until he was reminded that the French see rushing patrons out as a sign of disrespect. In fact, in many cultures, it is common to linger over coffee long after a meal. As Salucuse notes, the Japanese, who like relationship building, always take their time. According to Alliance Experts, Spanish presentations can be lengthy and might veer off the agenda.
For many American salespeople, the ability to express empathy is an important trait to develop. After all, as stressed by consultative selling, clients have problems that need solving. That’s why they’re talking to you. One’s ability to understand the core issues of these problems, including how they affect the individual buyer, can be the key to closing a deal. In other cultures, however, this can be seen a prying. One’s personal life is seen as separate from their professional affairs. According to Salucuse, people in Latin American countries are more emotional than their counterparts in England and Germany, while the Japanese are less emotional than other Asians. Of course, one must be mindful of stereotypes, so a little research goes a long way.
To be effective in any negotiation, sellers must understand the buyer’s decision-making process. This includes knowing all the major players who must sign off on any agreement. Not knowing this can negate countless hours of hard work when an unforeseen decision maker swoops in at the last minute. Internationally, this hierarchy can be vastly different and influenced by cultural factors we do not share. For example, does the organization believe in consensus building, where all the parties must agree on a particular point, or do the participants defer to a single decision maker who holds final authority? On this issue, one should tread lightly. Any push against it can be seen as an insult.
Form of Agreement
While agreement is the goal of most negotiations, the form of the agreement can vary by culture. For example, do your international counterparts value general language or, as in the United States, is more detailed and specific language preferred? This might be influenced by our litigious culture that demands formal contracts. In other cultures, agreements are made by individuals who shake hands. As noted by Salucuse, the Chinese value the relationship over the contract. Thus, they prefer more general agreements than Americans. Also, according to Alliance Experts, because Spaniards value relationships, they do not always require a contract. As American companies doing business overseas, it’s good practice to adhere to cultural standards, such as shaking hands and engaging in verbal agreements. However, always exercise caution and ensure all agreements are in writing.
As you can see, navigating cultural differences in a sales negotiation can be more complicated than negotiating with Americans. However, as always holds true in sales, sellers need to be prepared, and you should always consider the individual preferences of those with whom you interact. Sellers who do their work before entering a negotiation are more likely to engage their international counterparts in productive and profitable ways for all. Remember, in any negotiation, always present the most polished and professional version of yourself. As those with international friends and clients will tell you, once you establish a rapport, there’s often much more that unites us than divides us. For more, check out The Ultimate Guide to Sales Negotiations.
*From the article “Negotiating: The Top Ten Ways That Culture Can Affect Your Negotiation,” by Jeswald W. Salacuse, https://iveybusinessjournal.com/publication/negotiating-the-top-ten-ways-that-culture-can-affect-your-negotiation/ and his book The Global Negotiator: Making, Managing, and Mending Deals Around the World in the Twenty-First Century (Palgrave Macmillan, 2003).
**From the article “Contract law and negotiation tactics in Spain,” by Alliance Experts, https://www.allianceexperts.com/en/knowledge/countries/europe/contracts-and-negotiations-in-spain/.
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