How to Conduct International Negotiations

international negotiations

By Yuri Chernikov

Successful international negotiations is what helped Itransition grow from only 50 employees to 2,000+ IT experts. In this post I’m looking at how to efficiently conduct international negotiations based on our own experience as a company. While some of our negotiations were successful from the start, in some we had to fine-tune our offers to win projects, which taught us valuable lessons we are happy to share today.

1. Do your homework

We learned this simple yet valuable lesson when competing for a contract with PayPal. We knew that in order to conduct successful negotiations, we needed to gather data about all the participants we were going to meet and draw a meeting agenda detailing the negotiations minute by minute. By the end of the meeting, we made sure that all the parties reached a mutual understanding of the goals and discussion points.

Note that if your business representative doesn’t speak the language of negotiations at the native-speaker level, consider inviting a professional translator and brief him or her regarding the meeting agenda.

2. Find insiders and make them your spokesperson

We perfected this skill when negotiating with Shell Oil. We understood that in order to get more intelligence about our future client, we should look for an interested party within the client’s company and try to detect their personal interest, drivers and motivations, like promotions, bonuses, etc. This makes it possible to help the insider meet their needs while closing the deal.

If you intend to use this technique, invest in the insider’s training. This way, when they participate in the board discussions and represent your offer, they will pitch commercial offers as skillfully and knowledgeably as you would.

3. Don’t save on personal meetings

A lot of companies try to save time and budget on personal meetings, which may work on smaller deals, but can sink big deals in no time. We invested generously in our meetings with Phillips that helped us win that deal. Our experience demonstrated that negotiating for large contracts was more successful when parties were able to meet face to face, feel each other’s energy, and connect on a more personal level. Consequently, the more money the contract is worth, the more you should expect to spend in terms of time, effort, and budget.

When it comes to compensations, large meetups may imply expense coverage by the client. If such an offer isn’t on the table, you may consider asking a potential client for compensation in case you win the project. In such a situation, you will cover all the expenses initially, but once the deal is closed, you may include certain presales expenses in the first invoice. That’s a win-win situation for everybody.

4. Invite clients to your premises

The importance of having clients meet your team in your own environment is underrated. If your client is from a different country, it is a great idea to show them what your local and corporate culture is like and how it may influence the project positively. One visit can easily bust quite a few myths about offshoring.

When inviting clients over, you have a unique opportunity to provide a 360-degree view of your business. You can introduce them to the whole team, including top management, and show them how the company is organized. A first-hand assessment of the company is a great confidence booster for big long-term projects.

5. Prepare a team of leaders

Personal interests or staff availability are not eligible criteria for choosing a negotiation team. An available employee or one with the necessary visa may not be the right candidate.

Luckily, we followed a different route when vying for a deal with Toyota and chose participants who could bring maximum business value. We knew that there would be important business, technical and legal points of discussion, so we brought a business expert, a legal representative, and a tech guru who were all well-versed and coached on all the agenda points.

The levels of representatives from both sides should be the same, so consider arranging it in advance. It’s also a good practice to rehearse the ‘script’ on your territory until all the participants are fully confident in their ability to deliver the pitch.

6. Involve a reliable partner

When working on a contract with a large international e-learning provider, we discovered that it would be impossible to cover 100% of the project scope on our own. One of the solutions was to find a partner and involve them in the project to cover those missing parts.

Thinking ahead and proactively developing a partner network regionally and in overlapping spheres can become a winning point of negotiations and bring you closer to signing a contract. You can also involve partners in niche areas and be sure that they will carry out their duties expertly.

7. Make your presentation stand out

In order to win the project, you need to prepare a memorable presentation. When getting ready for the negotiations with Transfer Pricing Associates, we made sure our presentation could make a big impact. We kept it short, to the point, and focused on the client’s interests, and shaped content around the solutions we were going to offer.

It’s a good practice to demonstrate your expertise by using product samples or short product specifications. Images can be more powerful than words, so accompany your presentation with visuals and provide your potential clients with high-quality promotional materials. Plus, to make your products and services more attractive, you can include analytics, such as an ROI analysis or value forecasts based on implementing the solutions from your presentation.

Don’t leave without receiving feedback and making sure both parties are on the same page and understand what the next steps are going to be.

8. Be careful with contracts

Make sure you’re not losing more money on the contract than you can make on it. Analyze contracts as early as the RFP (Request for Proposal) stage from every angle, involving legal professionals, production leaders, and sales reps.

Understanding which contract points are negotiable and which are fixed will help you avoid misunderstanding and running into legal issues further down the road. Before you sign the agreement, you have to carefully calculate profitability as well as consider contractual expenses to know exactly what the deal is worth.

9. Support the project from the start

After you sign the contract, don’t hurry to relax. When we started our cooperation with adidas, we knew that the first month was a critical period for making a strong connection and laying the foundation for long-term collaboration.

You have to ensure the high communication quality by checking with the client whether the plan is being mutually followed and reacting to their feedback. All project members should know each other well and communicate efficiently to solve issues together. For better results, systematically monitor the degree of customer satisfaction and ask clients to fill out a satisfaction questionnaire. If necessary, make improvements and compare the performance at different stages of the project.

Are you ready to negotiate?

International negotiations require a great degree of patience, attention to detail, and an ability to understand a foreign culture as well as your own. Vendors need to thoroughly prepare for each stage of project negotiations, actively communicate with their clients, and closely follow up the project’s progress once the deal is closed.

This article was originally published on February 25, 2021.

About the Author

Yuri Chernikov

Yuri Chernikov is VP of Business Development at Itransition, Denver-based software development company.


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