Smart Shanghai Team » Sales and selling http://www.smartshanghaiteam.com Negotiation Training in China Mon, 15 Dec 2008 00:14:59 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 China Negotiating Basics – Setting LIM (Like, Intend, Must) priorities http://www.smartshanghaiteam.com/2008/11/03/china-negotiating-basics-setting-lim-like-intend-must-priorities/ http://www.smartshanghaiteam.com/2008/11/03/china-negotiating-basics-setting-lim-like-intend-must-priorities/#comments Mon, 03 Nov 2008 03:31:32 +0000 Andrew http://www.smartshanghaiteam.com/?p=28 Chinese negotiators usually have a pretty good idea about what they want from a business negotiation.  Just make sure you don’t put yourself at a disadvantage by A) not having a systematic set of priorities, and B) keeping those priorities too secret for too long.   The basic framework for setting negotiation priorities is the LIM.  Like, Intend Must.

Like:  L is what you would like to get from the negotiation.  This is your opening position.  If everything goes really well and you score a big success from your negotiation, L is what you are going home with.  Make sure you start off asking for enough — but not for so much that the other side thinks your are crazy, naive, dishonest or all three.   If your L is too high, then you may not get a second chance at negotiating — particularly if your counter-party is a MNC sales or purchasing department that works with a ’short-list’ system.  The goal of their first round negotiations may to set a short-list of 3 – 5 counterparties, and then conduct the real negotiations only with members of that group.  Set your LIM too high, and you may find yourself out in the cold — or forced to offer a price concession just to get to the second round.   

Intend:  I is what you can reasonably expect from the negotiation.  This is industry average or your existing arrangement.  I changes over time as international business cycles and prices shift.  You have to know what your I is likely to be — and to make sure that your boss agrees with you.  Figuring out I can be easy if you work with a stable, deep market that has many buyers and sellers.  If you are selling a unique or new product, figuring out I can be tricky.  For most of us, I is an established industry benchmark, price of a major local supplier or the price you are already getting (or giving).  Watch out for inflation-indexing schemes that can change your I as the economy changes — and make sure the terms are favorable to you.

Must:  M is the point at which you say ‘take it or leave it’.  M slots in just above your BATNA, which we talked about last week as your Best Alternative To No Agreement.  Professionals know not to do the “walk-away” too often — but they also know that sometimes a slow walk to the door is the best negotiating technique in China.  When the other side says, ‘no deal’ to your last offer then you have no choice but to leave the table.  

Make sure that everything is cordial and professional,however, since there’s a good chance that they will try to call you back to the table.   Try this:  “I’m sorry, Bob, but it just doesn’t seem like we’ll be doing business this time.  Good luck, and if your situation changes please get in touch.  I’d love to be able to do a deal in the future.”   It’s much better at keeping the door open than saying, “Go to hell you lying, cheating bastard”.  Just a thought.  

M is relatively easy to set.  It’s marginally above your BATNA.  If your BATNA is maintaining the arrangement you have with an existing supplier or client, then you can figure it out to the 3rd decimal point.  If your BATNA is bankruptcy, unemployment and ruin — then you had better know that walking in and set your targets accordingly.

]]> http://www.smartshanghaiteam.com/2008/11/03/china-negotiating-basics-setting-lim-like-intend-must-priorities/feed/ 2 China Sales & Negotiation: The DMU http://www.smartshanghaiteam.com/2008/10/14/china-sales-negotiation-the-dmu/ http://www.smartshanghaiteam.com/2008/10/14/china-sales-negotiation-the-dmu/#comments Tue, 14 Oct 2008 02:13:52 +0000 Andrew http://www.smartshanghaiteam.com/?p=11 The Chinese Decision Making Unit

If you are selling to a large company, there is a good chance that the buying decision is being made more than one person. We call this the “DMU” or Decision Making Unit. If you are selling to traditional Chinese companies, there is a very good chance you will not be spending too much time with the real decision-makers. There is a good chance you will have never actually met them. (Some people will say that you may never even find out who the decision-makers are, but that is becoming less and less true.)

What does this mean to the sales professional? You had better have a method for dealing with the internal selling process at your prospect company. In other words, you won’t be carrying the message to the decision – maker. This presents you with 2 challenges:

  • 1) Motivate your contact (or find contacts who are already motivated) to carry your message to the decision-makers.
  • 2) Prepare this contact of yours to bring the message “upstairs”.

Let’s take a look at these two factors in more detail.

1) Motivate the message-bearer.
This sale may be important to you, your company, HIS company, and all the future generations.
But is it important to the “gatekeeper” that you are dealing with? What does he care about, and why? There’s a good chance it is not what you think.

People are more motivated by FEAR OF MAKING A MISTAKE than by DESIRE FOR ADDITIONAL PROFIT, particularly when the profit goes somewhere else, but the fear is right there with them. Are you presenting your company as stable, experienced, and safe?
Find out what this person cares about, and do your best to solve those problems.

2) Prepare the messenger.
If you are successful at selling to the gatekeeper, he will carry your message up the ladder. Or he will try. Maybe. You’ll never really know. But you can prepare the messenger so that he can do a better job for you.

Since you know that the buying decision will be made by someone else, you can prepare a presentation tailored as specifically to this decision-maker as possible. A quick, well-organized powerpoint presentation — translated into Chinese and English — with all the important buying points a top-level manager would care about. Make sure you put it on a nice disk — maybe even attached to your company letterhead and brochure. The DMU presentation should be brief — no more than 7 – 10 ppt slides, and should include your contact information (consider using the footer and a closing “Thank You” page with your contact info). Give it to your contact, but explain to him how to use it to explain your offering to the rest of the DMU.

Will this work every time? No, it has to be handled well. You have to really convince your contact to help you by carrying your message to the DMU — and that is going to require some persuasion. There may be some downside or risk to this. But if you can find a way benefit this person, he may be willing to help you (if it is helping him more).

But just because he is willing doesn’t mean he is able. So help out. Give him good materials to work with and train him to deliver your basic message.

It is not as good as getting in to see the decision-maker yourself, but sometimes that doesn’t happen right away. If you remember these basic ideas about selling to the DMU, your chances of success improve.

]]> http://www.smartshanghaiteam.com/2008/10/14/china-sales-negotiation-the-dmu/feed/ 1