How Culture impacts Negotiations & Sales

Put yourself in the other’s shoes

“I told them that I expect to walk out with a million-dollar contract.” In the eyes of Ami, one of the top salespeople in an Israeli organization, this was supposed to be an ice-breaker, a kind of joke at the beginning of his negotiation process with the Japanese.

Did they think this was funny? I asked. It was a rhetorical question. He continued to tell me how the dynamics of the transaction only deteriorated from that moment on. As I began to explain to him about cultural awareness and expanding one’s perception of how others see the world, Ami thought about the information, looked at me incredulously and asked, “You mean I’m supposed to act Japanese?”

Develop cultural competency

Anyone who’s ever sold for a living has great stories to tell, and telling stories remains a part of a sales person’s toolkit. However, as one tells stories in other cultures, one needs to bear in mind that jokes sometimes don’t translate well, and that your customers or prospects will often not have the ability to relate to many of your “funny” sales experiences. There are cultures where it’s perfectly OK to tell a joke at the beginning of a negotiation process, whereas in other cultures, this will be met with a serious, face.

Almost all selling today means selling across cultures, and it requires having the ability to recognize culturally based behaviors and adjust one’s selling style if one wants to be successful. It’s not enough to own basic selling skills; one needs to augment them with cultural awareness skills. In other words, you need to develop a Global Mindset.

How do different cultures negotiate?

Asian salespeople recognize the prevalence and importance of the negotiation process and understand that first meetings are not that critical since they believe much of the sale is made outside of the meeting itself.

This makes a lot of sense because individuals in more relationship-based cultures like South America and Eastern European countries tend to “close deals” outside of the meeting itself, and as such, rely more on creating trust through building relationships. First meetings are only “first base” in the negotiation process.

Americans are a very task-oriented culture. Relationship building is a nice-to-have, but they are more concerned with the impact of the first selling meeting, their need to hit a “home run” and walk out with the deal.

Verbal and non-verbal communication

As communication is an important part of the sales process, the Americans recognize that they have greater difficulty reading body language, but on the other hand are not troubled about not being able to supply answers to questions. This will not go over well in Germany, as Germans dislike ambiguity, risk-taking, and uncertainty, valuing instead facts, clarity, and non-emotional communication. Germans often feel challenged negotiating with Israelis who negotiate with a more emotional mindset, raising their voices and conducting internal arguments in Hebrew, for example. Even more, Israelis are ready to take in-quantifiable risks and believe in ‘winging it’.

Silence poses a challenge for American and European salespeople as they don’t feel comfortable with the non-verbal language and need to fill in the silence with words. Asian salespeople, on the other hand, use non-verbal communication as a norm and often use silence as a tactic that can sometimes mislead both the Europeans and the Americans.

Here are 6 pointers for anybody who is new to selling across cultures.

1. Be culturally aware when is the right time to move from the trust-building phase of a business relationship to your sales pitch. In some cultures, the first few meetings need to focus on building a relationship and on establishing rapport. In Argentina or Spain, for example, launching your sales pitch too early will result in negative results.

Remember that the language of business is the language your client speaks.

2. Think about the language in which you will make your sales presentation. Is English appropriate?  If you need to hire an interpreter, try to find one that can also bridge some of the cultural differences.

3. Adapt your pitch to the target market. In the USA, a pitch needs to be energetic and punchy. In Britain or Australia, a pushy and heavy sell will be regarded with suspicion. Japanese executives tend to be risk-averse and afraid of failure, therefore, a pitch needs to be reassuring and to focus on quality and reliability.

4. Watch your body language. In the U.S., eye contact encourages perception as a trustworthy person. In countries like Japan and China, hierarchy matters, it is important to focus your sales pitch towards the group leader. Watch the client’s body language, too. A nod or an affirmative gesture in Asia might mean ‘I hear you’ rather than ‘I agree’. A head wobble in India may mean ‘I understand’ or ‘I am focused on what you are saying’ but not necessarily ‘yes’.

5. Pay attention to the level of formality in the culture. Germans tend to be formal and use ‘Mr.’ or ‘Mrs.’ Whoever you are selling to, learn to pronounce his name correctly.

6. Think about your message and make it appropriate. Cultures that are relatively risk-averse and past-orientated, like Germany, will want to know about the stability of the deal and the potential for long-term relationships and employment for local people. Other cultures, like the USA, may place more emphasis on the bottom line and speed of delivery.

So next time you are selling cross-border, remember that culture impacts every aspect of business interaction such as decision making, negotiations, communication, conflict resolution, team management and more. In a border-less world, the understanding of cultural differences in any cross-border business interaction determines whether the differences will become a negative force or the catalyst for a successful collaboration.