How you can improve your negotiation techniques when doing business in Mexico.

doing business in mexico

There are many negotiation styles in the world, but the most efficient negotiators are the Japanese. It’s good to learn from them. I’ve studied their negotiation styles and their formula can be applied when doing business in Mexico and any other country in the world. Of course, you need to adapt some things, but the basic principles apply everywhere.

You need to prepare yourself before a negotiation takes place. Create a negotiation plan. I’m going to give an introduction to the basic principles of a creative and new global negotiation style. I’ll divide this post in two parts.

1. What to do before the negotiation

Before meeting and negotiating with suppliers or manufacturers I suggest you take some time to prepare. Below I list 6 procedures to do before the negotiation. Create a document and write content for each procedure. It’s better to prepare this information with a team and discuss the strategy together.

1. Gather intelligence: Contact your sources and ask information about the company to learn more about them. Search for information in other sources like the internet. In Mexico there is not much information on the internet so you’ll need to rely on local sources.

2. Set strategic goals: An example of a strategic goal would be to reduce price 20%. You need to set all the goals before negotiations begin.

3. Facts to confirm during negotiation: Reconfirm critical information and assumptions. Make a list of facts to be discussed. For example, the specifications of materials, prices, delivery times, sizes, payment terms, etc. Anything you assume must be confirmed.

4. Agenda: Create an agenda to settle each issue or goal one at a time.

5. The best alternative to a negotiation agreement (BATNA): Consider what happens if the business relationship doesn’t work. Create a contingency plan.

6. Concession strategies: The concession strategies should be decided upon and written down before negotiation begins. Have specific reasons for the size of each concession you make.

2. What to do during the negotiation

The key to negotiations is learning as much about the other side as possible by maximizing the knowledge flow from their side to our side. This applies when doing business in Mexico or in any other country. Take in as much information as possible, be patient and avoid conflicts. The following techniques are in order. However, if you still can’t close a deal, go back to the first technique and keep persuading.

1. Ask questions: Ask questions to gather all the possible information and be in a stronger position to negotiate. Sometimes you need to repeat the same question, maybe you’ll get a different answer.

2. Educate: Explain the situation of your company, your needs and preferences.

3. Be patient: Give them time to think. It’s not easy to wait, but you need to know they might be using time as a persuasion tactic. Japanese are good with this technique, but most cultures are not good at waiting.

4. Warnings and threats: Warn or make threats only when you are in a stronger position to negotiate and only thru a local agent. You should not warn or threat directly because your relationship will collapse, and Mexico is a relationship oriented society. Use a third party to warn or threat. It’s better not to use this technique, but it’s a last resource persuasion tactic.

Read about Mexican history and culture

If you are negotiating and doing business in Mexico, you’ll need to understand the Mexican culture and history. However, it is also very important to comprehend your own culture. When you understand your own culture you’ll understand your behaviors and actions.

There are other strategies and theories about international negotiations. I suggest you learn the history, culture and language of the country you intend to make negotiations with. If you don’t speak the language, hire an interpreter. Interpreters are very useful because they not only speak the language, they are also able to perceive cultural differences and reach harmony. Hire an interpreter that understands and respects both cultures.

The objective of negotiations should not be to win or lose, it should be to build creative outcomes. Creativity brings more useful ideas for your business. I recommend you to read the book Global Negotiations by John L. Graham and William Hernández.

Tell me if this post was useful for you or if you have other international negotiation techniques you can share. Help me add more useful content to this post. Creative outcomes are possible when people from different cultural background cooperate.