Negotiating in China: The Silence and The Stare
I was conducting a workshop on negotiating high-level sales recently in Shanghai. Most of the participants were Chinese salesmen with 3 – 5 years experience. They were successful, respected and in the process of being groomed by their MNC employer for bigger management and leadership roles. But as I was talking to them about taking time to understand the counter-party’s point of view and goal systems, I got a face full of The Stare that indicates something has gone terribly, terribly wrong.
If you are new to China and you are on the receiving end of your first Stare, you may think you have made someone angry…or embarrassed…or confused…or said something stupid…or insulting. And you may be right. Or you might be wrong. You’ll never know – that’s the whole point of The Stare. It’s a semi-conscious behavioral technique intended to mask emotion and block all transmission. Think of it as more of a screen saver than a warning message. The Stare people aren’t necessarily angry – though they might be. They are simply blanking out on you until they have a prepared a more controlled, constructive response – or are waiting for someone else to step up and do it.
As a trained negotiator, I have learned a technique of my own for dealing with rough spots in negotiations. I shut up and go into the “unthreatening listener” pose. They teach this. Relaxed stance facing the counter-party, head cocked slightly to the side, arms open, a slight smile (no teeth showing) and an attitude of PATIENCE. The idea is to create a psychological space for the other person to speak, and hopefully volunteer information that could be useful. (As most good salesmen know, that silence is also INCREDIBLY HIGH PRESSURE. Zig Ziglar, the guru of old-school sales training once said that you should ask your client to sign the deal and then SHUT UP. The first one to talk would end up owning the product.)
So there we were – Staring and Silencing. Both waiting for the other side to quit being jerks and start cooperating. Now, the difference between East and West is that The Stare is self-reinforcing, where-as The Silence is not. So I took the initiative and asked them how they usually handled negotiations with Chinese counter-parties.
Some SAID the right things – to me – about being proactive and building a trusting environment for Win-Win negotiations, yada yada yada. But as we got further into the conversation, it became clear that they were still rooted in old-style relationship building (which is OK), and WAITING FOR THE BUYER TO MAKE THE FIRST OFFER – WHICH IS NOT OK!!! Then they start cutting price.
Are they doing any REAL negotiating – demonstrating creative problem solving and finding new ways to compromise and achieve their goals? Yes they are – with their managers and bosses! When they come back from a “negotiating session” and explain to YOU why it is important to cut prices and give away services. That’s when the fancy negotiating techniques see the light of day.
Many Chinese negotiators still feel that they are placing themselves at a disadvantage by offering price and deal terms. It is still common for them to build relationships until the buyer feels comfortable enough to illicit an initial offer and then begin an endless cycle of price cuts and free services.
How can you get your sales people to really negotiate better? It’s a matter of coaching. Try these simple techniques to start with:
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• Have them articulate the goals of each deal BEFORE they engage the client or counter-party. Get them to be specific about the goals of your side and the counter-party’s side. Go beyond just price, and include schedule, services, guarantees and follow-up business. Make them frame best case, most likely, and worst case scenarios.
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• Determine when deal-killing points should be dealt with. (Chinese tend to identify deal-killers early but address them LAST – feeling that the other side will be more flexible if every other point is agreed upon. Western negotiators tend to deal with deal-killers early – since there is no point in wasting time on minor issues if there is no ‘meeting of the minds’.)
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• Have two price floors. One to sign the contract – the other to pay the salesman. In other words, let your salesmen decide how important a deal really is. If they think that there are good reasons to pursue the contract to the very limits of profitability, then they can sacrifice their own bonus or commission. Likewise, if they are able to bring in a high-value, high-profit contract, you should be compensating them accordingly.
There are no magic bullets in China sales, but there are plenty of invisibility cloaks. Don’t let your sales team make YOU their primary negotiating target. Coach them on proper technique BEFORE and DURING the negotiation. If you try to do it AFTER they come to you with a low-ball offer, you are not teaching them anything – they are showing you!