Webinar Report: How To Successfully Negotiate in the U.S. Market
TABS Webinar Report
– Jacob Willemsen, President, TABS Inc. [Moderator]
– Floor Bergshoeff, Business Developer, TABS Inc.
– Carl van der Zandt, Partner, Wuersch & Gering LLP
– Frank Garten, Speaker and Facilitator, Frank Garten BV
Floor Bergshoeff began presenting the services offered by TABS Inc. in the U.S. and how TABS assists in a wide range of business and administrative services, including bookkeeping, payroll, FDA, office rental, phone handling, etc. These back-office services are intended to help clients focus on doing business, which Tabs has successfully been doing for over 300 clients from Europe and other parts of the world.
In 2020, TABS conducted a market research to investigate the Do’s and Don’ts for a successful market entry in the U.S. Over 250 entrepreneurs with experience in the U.S. market were part of this study. Floor explained that what most obviously stood out in the research was the importance of understanding cultural differences wen expanding your market, especially in the initial stages when companies are likely to build a team, reach for customers, etc. Often these differences are underestimated. 40% of respondents affirmed they experienced many cultural differences during negotiations and that the negotiating process was much different than what they were used to in Europe.
Understanding Cultural Differences
Frank Garten introduced with examples of Erin Meyer’s book The Culture Map, explaining how normality is perceived in different cultures and how this is set by the individuals’ expectations, culture is not a tangible thing, the lessons you learned in your life determine your perspective of how you view the world and what’s perceived as normal to you.
U.S. vs. Europe Perceptions
Frank showed that usually associations Europeans make of the Americans are far from their real intentions. What may be seen by someone from Europe as superficial, over-the-top, or over-friendly may just be an effort to make you feel welcome and comfort you. At the same time from another perspective, Americans may often assume Western Europeans are reserved, unclear or not enthusiastic. These different impressions one can have of another color how we act at the negotiation table.
Hierarchy and Power Distance
The U.S. and the Netherlands are quite similar on the Power Distance and Decision-Making scale, but there are some subtle differences between the two countries. While on both countries there are no discriminations on the negotiation table, there is an important difference when a decision is to be made. At that stage of the negotiation, hierarchy plays a role. In the U.S. it is expected that everyone will follow the manager’s decision. If someone speaks negatively about the decision after it has been made, as it is common in Europe, they may be perceived as disloyal. The secret, if you are negotiating with an American company, is to find out who is the real decision maker and use the hierarchy to your advantage.
The Lawyer’s Perspective
Sharing from a lawyer’s point of view, Carl van der Zandt, affirmed that when negotiating, Americans tend to have a more adversarial approach. While in Europe a problem-solving attitude and integrating resources is more common. Carl proceeded to explain some important nuances of negotiating in the U.S. First of all, power is very important. Having an American subsidiary may help you with this as you will be able to take more risks. It is also important to understand that the whole negotiation process is non-binding, nothing is concrete until the deal is finalized. Writing everything down in the agreement is crucial since anything that has been previously discussed in person or via-email may become completely irrelevant if it is not written down in the agreement. For a successful negotiation in the U.S. Carl advises to avoid politics at all times, to not assume it is a uniform market, know your business partner and don’t start your opening offer too “reasonable”.