In this article, I share the most important sales negotiation strategy lessons I have learnt throughout my career and talk about the importance of negotiation cultures.
During my sales career, I have been lucky enough to win clients in over 60 different countries.
I’ve also trained and coached thousands of people in 128 countries and worked with multiple international sales teams.
This experience taught me many valuable lessons about how important culture is when negotiating.
International Negotiation Cultures
Certain nations have particular negotiation cultures and so do companies.
For example, when selling to many African nations, you should always expect to negotiate.
It’s almost customary to do so.
I’ve also experienced the same in the Arab countries as well as India, Italy, and others.
And yet, in places like the UK, negotiation is often seen as rude and unnecessary.
Many people fail to respect cultures, including many companies and their salespeople, when they attempt to break into international markets.
Whether you’re selling on the international market or locally in your own country, you’re going to be dealing with prospects from a variety of cultures.
There are no guarantees the person you’re trying to sell to was born in that country, so their negotiation style may be driven by another culture much different from yours.
I learnt from my own painful experiences how adaptive one needs to be when negotiating in different cultures.
Initially, I would take my prospect’s low starting point in the negotiation as an insult, get all emotional, end the call, and close the opportunity down as ‘lead lost, no budget’.
Heavens knows how much business I lost back then as a result of my immaturity.
Company Negotiation Cultures
I’ve also worked with many fast-growing start-ups and witnessed how quickly a culture of heavy discounting can be born and how costly it can be.
The culture of winning new clients at all costs in the startup phase is a lot of fun, but the negotiation culture of heavy discounting is an expensive and hard habit to kick.
There’s certainly no mistaking why companies such as Apple, Salesforce, or Tesla are so successful in winning and retaining clients despite fierce competition from lower-priced suppliers.
They do this by offering high-quality products and services and almost always maintaining a strict no negotiation policy.
Tesla CEO, Elon Musk, hit the nail on the head in 2016 when he heard some of his salespeople had been offering discounts on new cars.
In a company email, he wrote:
“If you can’t explain to a customer who paid full price why another customer didn’t without being embarrassed, then it’s not right.”
I couldn’t have put it any better myself.
I used to give a similar message to my sales teams, and I stick by it today.
A seemingly harmless discount can appear worthwhile when it gets you above target.
But if that client spreads the word, it can quickly become a costly error.
I remember one of my past employers creating a ‘win at all cost’ strategy to get the top ten brand names on board in particular verticals.
In one of those verticals, we landed the UK’s biggest retailer at a heavily discounted rate.
It was a roaring success and was celebrated throughout the company.
I also remember when one of my reps was about to close their main competitor a few months later.
It was the last day of the month, the deal size was huge, and it was down to the final call.
the day the second biggest brand in that same vertical was about to become a client at full price.
I remember the look on the rep’s face as he came to me after the call had ended.
Turns out the prospect was friends with the marketing director at his competitor, who had shared the details of his agreement, including the price.
That one discount alone cost the company thousands in lost revenue.
Sales negotiation lessons can be hard to take, but if you if implement the following two factors into your sales negotiation strategy, it can save you a lot of pain (and money).
- Always respect and be aware of the culture of your prospect. They may not have been raised in their country of residence, this may not negotiate as you expect.
- Be very cautious of creating a culture where heavy discounting is used to win deals. It’s often great for the short-term, but costly in the long run.