In this post I will talk about negotiating deals and managing expectations with Chinese clients. We received quite a few insightful comments on this issue from people who work as consultants in China. The overall conclusion was that closing deals and getting paid is particularly hard for people selling ideas and expertise rather than goods. Still, negotiating with Chinese businessmen (and -women) is a challenge that anyone doing business in China has to deal with sooner or later.
Take a look at this example from my own work experience: This big Chinese marketing firm contacted my company. They wanted us to design and develop a website for one of their clients from the automotive industry. The gig was rather small and pretty straight forward and after a couple of friendly initial meetings, we came to an agreement and started working. Everything went according to plan, the client was happy with the website we delivered, we got paid on time. End of story. There was one interesting development, though.
When the deal was becoming interesting, the problems started too
Toward the end of the project, the project manager in the marketing firm started telling us that they wanted us to handle the entire account of the car manufacturer we had just built the website for. They were even going to throw in a second big client from the same industry. Apparently, we were on to something big. But that’s where the trouble started: meetings after meetings, presentations after presentations and half a year later, we were standing in front of a huge pile of half-defined tasks with no contract anywhere near to being signed.
What happened was this: after they had tested the waters and decided we were reliable, the marketing firm had started leveraging the size of the project (actually it was two projects!) by throwing everything into one big basket. At the same time, they were telling us that they were only passing on their clients’ (confusing) requests. And on top of that they claimed that dealing with public Chinese companies was something a Westerner could never fully understand.
After a couple of heated internal debates, my company was at the brink of throwing in the towel. Fortunately, we managed to take a step back and cool down. In order to get the situation under control, we started reviewing what the different parties we were dealing with wanted the most from us. We figured one of our central asset are our Western organizational skills and our high standards of service.
Staying firm and stressing what makes you stand apart
What we hadn’t communicated clearly to the marketing company was this: not only were our services better than those of other local service providers, they were actually quite different. In other words, rather than trying to implement one stopgap measure after the other and catch up with impossible deadlines, we needed to convey to the client that he had to follow our project management lead. After all, that was what he was paying for. Maybe more importantly, we realized what mattered most to our contact in the marketing company, as well as the mid-management level in the car companies was this: Delivering (positive) reports to their superiors.
It wasn’t so much that they were manipulating numbers. We just had to come up with professional keynote presentations in Chinese that were then used by the project managers to impress their Chinese higher-ups. Once we had grasped the importance of this aspect and had allocated our best resources to compiling the reports, the pieces started falling in place and we were able to sign the bigger contracts.
To be sure, dealing with the marketing company and the automotive clients was still time-consuming. But once we had identified what mattered most to our counterparts, we actually started working together with those managers, rather than against them.
The lesson that you should learn from this:
If you want to negotiate deals that both you and your Chinese clients or customers will be happy with, you must find answers to these two important questions: How can I best leverage my special Western skill set? What benefits can my immediate Chinese counterpart draw from our business relationship?
Good luck and stay tuned!