How-to-Conduct-International-Negotiations

In the last post, we talked about the difference between doing business in the UK and the US, and today we are looking at how to nail international negotiations and win every project you are competing for.

As a Vice President of Itransition, I have been responsible for business development, sales and partner relationships for over 10 years of experience in international negotiations, resulting in more than 250 international contracts and amassing a revenue of over 35 million dollars from the USA, UK, EU, Scandinavian countries, the Near East and the CIS.

Successful international negotiations helped Itransition boom from only 50 employees to 1300+ IT experts. This post is based on our negotiations experience with ten clients. Five cases were 100% positive from the start, and in the other five, we had to fine-tune our offers to win projects, which taught us valuable lessons we are happy to share today.

Here are our first five tips to ace international negotiations:

How To Conduct International Negotiations - Part 1

In many companies located remotely from their target markets, leaders forget that if they want to win projects they cannot use the same business clichés they use locally, without adapting them. Despite the globalization of the world, some business principles are still rooted in local cultures, and have to be observed when conducting negotiations. Below we go into greater detail about the five lessons of successful international negotiations we have learnt in the past:

Do your homework and prepare thoroughly

We learnt this valuable lesson when competing for a contract with PayPal. We found out that to conduct successful negotiations, you need to gather data about all the participants you are meeting or negotiating with remotely. Draw a meeting agenda, detailing the negotiations minute by minute. This method is usually perfected on the government level, but private business is often lagging behind, thus losing money and opportunities. By the end of the meeting, you have to be sure that all parties have reached a mutual understanding of goals and discussion points. Study the language of negotiations. If you don’t have a business representative with native speaker level of the language, hire a professional translator, who should be briefed on the agenda and topics of discussions. If you have a company representative who knows the language, train them in the subject of negotiations.

Find insiders and “hire” them

We perfected this skill when negotiating with Shell Oil. If you want to know everything about your future client, look for the interested party in the Client Company or partner company and find out their personal interest, what motivates and drives them (promotions, bonuses, raises, etc.). Knowing their interests, you can guarantee the fulfillment of their needs when you finalize the deal. Train the insider. Because insiders usually participate in board discussions and represent your offer, they have to be trained to be your spokesperson if you are not present, and pitch commercial offers as skillfully as you would. Training should be detailed: what technologies are used, why so, what statistical data backs up the decision, what is the reasoning behind the price and what value is offered. Insiders have to be able to answer difficult questions in your absence, so spend personal time with them and don’t rely on proposal and marketing materials alone.

Spend good amount of resources on personal meetings

A lot of companies try to save time and budget on personal meetings, which may work on small and medium size deals, but can sink big deals really fast. We invested generously in our meetings with Phillips, and we won that deal. Despite the ability to communicate online, when big money is about to be spent, some aspects are difficult to discuss remotely. Negotiating large contracts is more successful when parties are able to meet face to face, feel each other’s “energy” and connect on a more personal level. The more money the contract is worth, the more you should expect to spend: time, efforts and budget. Prepare at least 2 weeks in advance, gather intelligence, organize visas, accommodation and entertainment, making sure you invite as many people as necessary to represent yourself fully. Invest in high quality marketing materials such as business cards, leaflets, and brochures in the language of negotiations.

When it comes to the somewhat controversial question of compensations, for big meet-ups covering expenses by the client may be implied. If such an offer is not on the table, you may consider asking a potential customer for compensation in case you win the project, so that you cover all the expenses on your own, but in case of getting this deal, you may include certain presales expenses in the first invoice. That’s a win-win situation for everybody.

Invite clients to your premises

Some businesses do not even realize the importance of having clients experience your company first-hand. If you are working in different cultures, it is important to show your clients what your local culture is like and how it may influence the project positively. A visit can easily make many outsourcing myths fly out the window.

Communicating after hours makes it easier to become closer and get feedback on the deal informally, which may sometimes illuminate issues that would not have otherwise been discussed in an official setting. When inviting customers over, you have the unique opportunity to show off a 360-degree view of your business: introduce them to the whole team, including top management; show them how the company is organized; give them a chance to talk to “grassroots” employees.  A full assessment of the company is a great confidence booster for big long-term projects.

Prepare a team of leaders for negotiations

Business comes first, so personal interests or staff availability are not eligible criteria for choosing a team of company representatives. An available employee or one with a valid visa to the location of negotiations, may not be the right candidate at all. Good thing that we knew this rule when vying for a deal with Toyota – choose participants who bring maximum business value and make a selection considering the agenda. If there are important business, technical and legal points of discussion on the agenda, then you need a business expert, legal representative and tech guru who are well-versed and coached on all agenda points. The levels of representatives from both sides should be the same, and that should be arranged in advance.

Also, do not rely on hope alone and expect everyone to play their role perfectly at the negotiations. Write a list of points to make, questions to ask, have the answers ready and schedule time slots for each pitch section and specify who delivers it. Don’t forget to do a grand rehearsal of the ‘script’ on your territory until you and all the participants have full confidence in their ability to deliver the pitch.

In the next publication, I will continue discussing the practical lessons learned from international negotiations. Stay tuned and comment below to add your opinion and advice on how to become a well-prepared negotiator!