In modern economies, asking the buyer questions to understand their needs would be considered the most basic skills of a salesperson. This isn’t happening as much as you would expect in technologically advanced, well educated, sophisticated Japan, the world’s third largest economy. In Japan, busy bosses or more experienced salespeople, will take the new salesperson with them on a couple of sales calls. End of the training. Going straight into the detail of the features of the solution is the mainstream technique here.
Should you adopt the same sales approach when trying to sell to Japanese buyers? If this is how they roll, then isn’t that the obvious way forward? Let’s explore what we need to know about how to be successful in selling to Japanese buyers.
What is different in the Japanese sales equation?
To get the decision accepted by the relevant divisions within the company, requires the outcomes to be substantially worthwhile for them to agree. Features won’t be enough, so we have to know what the needs are first, in order to match our solution and make it convincing to the buyer side.
That means asking questions first to understand their needs. In the West, we never even think of the process of asking permission to ask questions, because consultative sales is the accepted way of doing things. When dealing with Japanese clients, because of the status imbalance between seller and buyer, we have to ask for permission first.
Remember, they don’t know us and they may be reluctant to start sharing all the problems (dirty laundry) their firm has with a salesperson they met just two minutes ago and especially from a foreign salesperson with whom they feel zero cultural and linguistic similarity.
The “slow” part is a pain for foreign suppliers, because everything in the West is about speed to profit. Quarterly share performance as a basis for making investment decisions is ridiculous anywhere and Japanese buyers feel absolutely no time pressure to do anything. We might think the concept of suffering an “opportunity cost” by being too slow to move, is going to be convincing to get them to buy now. Don’t worry, many of us have tried it, but without great success. This idea is always trumped by a preference for risk free or low risk decision making.
Using sample orders or small scale commitments are the way forward to establish that trust. Don’t expect anything to happen fast and at scale. It may take a while to become accepted. If you ask for a small piece of their business to demonstrate your reliability, that is an easier concept to get pushed through the many layers of Japanese buyer decision-making hierarchy. Japanese buyers definitely prefer the Devil they know (your established competitors) to the Angel they don’t (that would be you), because it is less risky. You have to become familiar, but that takes time.
If you don’t have a long enough time horizon for the Japanese buyer, you are better off selling your solutions elsewhere, because you are the only one in a hurry or facing time pressure for results. Let me give you an example. The Toyota Prius car was launched in 1997 and did not make a profit until 2001. Losses for five years in a row. However, by 2009 it became the top selling car in Japan. How many foreign Boards and shareholders would be able to match that patience and acceptance of years of losses? How long will your bosses support you to crack the Japanese market or to make a sale to Japanese buyers located outside Japan?
As an aside, Toyota is busy researching Hydrogen as a vehicle fuel source, while everyone else is concentrating on advances in battery power. My prediction is Toyota will dominate the global Hydrogen fuelled vehicle market for heavy load transport. Let’s see if I am right.
Adjusting our expectations and time frames are a starting point for winning business in Japan. When we get a new sale, I will ask my salesperson, “when did we start talking to this client?” and the answer will often be “three or four years ago”. That is not uncommon. What this means though is you need a full sales buyer funnel to survive those years of slow decision making. Trying to speed things up by pushing your sales though the layers of internal decision making won’t work, because you will never meet the people involved. When they say, “we will think about it”, they are being honest, because of the collaborative decision-making process.
Be patient, start small, be consistent and to win, just keep going.
When you are told that “hope is not a strategy” you get the point. You also know that actually there is a fair bit of hope built into your strategy. Every sales organisation comes up with targets and often these are based on hope more than science. There is imperfect information floating around and we use this as the basis of our assumptions. There is incomplete data and we have to extrapolate based on those numbers. Things can change quickly and the ramifications can be completely unexpected. January 15th, 2020 was the first case of Covid in Japan. February 23rd, 2022 was the start of the war in Ukraine. You couldn’t predict these events and there is a huge amount of hope that both situations will resolve themselves and we can all get back to some version of normality.
We say things like, “let’s focus on what we can control”. That is jolly heart warming but it isn’t much help. There are numbers which have to be generated and these have to be produced regardless of external factors, most of which we cannot control. This whole ensemble of difficulties can be very discombobulating in sales. If we are set targets too high, we mentally check out and give up. We don't make any declarations to the boss that we have given up, but our activities are such that we are not doing all we can to get the numbers, because we don’t believe in the fairness of the process.
If you are the boss, the management of the sales operation gets more and more difficult in the work from home or hybrid arrangement. Keeping track of what people are up to gets harder. Our expectations have to be tempered by the external environment, be that Covid or the global downturn. The numbers get harder to reach. If we push too hard, people will quit and they will have little issue with finding another job, if they decide they don’t like this one. The whole process becomes more delicate and complex at the same time.
If we take a long hard look at our strategy and we realise there is a fair bit of hope built in there what do we do about it? Not every industry or sector is affected by Covid, the war in the Ukraine or a global downturn. Are there pockets of opportunity in certain spheres where they can still spend? The timing of things may be faster in some sectors than others. If we can get deals happening faster, then that helps a lot with getting to the targets. Often we just run out of time, because the speed of the deal flow has ground to a halt or has really slowed down.
Can we re-organise the sales team? We can create smaller teams, apply more supervision and have more roundtables, to share information and insights. In good times the team can be allowed to run around at will, because the numbers are being achieved. When things get more desperate and the numbers are not coming, we need to do more coaching and more checking. Often circumstances can outstrip the experience of certain members in the sales team. The Lehman Shock was back in 2008 and there will be team members who have had no direct experience of doing business during that meltdown environment. Anyone in sales under the age of thirty-six hasn’t suffered through a major downturn since Lehman. This is where the more experienced people become important because they have seen a version of what we are going through now, at some stage in the past and have experience of what to do.
We all have dead pools of clients who have lapsed. They were active but situations changed and they are no longer a client. They are a good place to start because they at least have some record of buying from us. We may still be an accredited supplier for them and the paperwork is already there to make the buying process that bit easier. Often the people will have changed, but the underlying issues may not have been completely solved or new issues have arisen and we have the solution they need.
We may have served one client but there will be other similar clients we have not had the chance to do business with. If we come across an issue in one industry it is often going to be a common issue with other companies in the same industry. If we find a problem for one client we need to look around at which other firms may have the same issues. For example a five star Hotel may be having trouble with retention. There is a strong chance other five star hotels are having the same problem. That means we should start contacting all the major hotels and see if that is the case.
Gradually we can replace hope with action and try to stimulate the sales process in that way. The key is to get started and to not just become immobilised because the hope aspect of your strategy is not working out.
Inertia is a powerful retardant to getting deals done in Japan. Either they already have a regular supplier or this is a new solution with which they have no experience and they don’t want to risk anything. Buying from you represents a number of changes which must take place on their side. Change equals risk in the Japanese buyer’s mind rather than opportunity. Doing nothing with the new solution is an easy decision. Sticking with the existing supplier is an easy decision. When we are trying to create a new client we must have the right mindset. If we are focused on getting a deal done then we will have trouble, because the whole process can be so frustrating and take such a long time. We are more inclined to give up altogether. If we are focused on the re-order, we will be in a better place mentally to do what is needed to get the deal done.
Speed is usually seen as a positive but not always in sales in Japan. Rushing into something which might blow up in your face, doesn’t enthuse the buyer to move things along at a brisk pace. As I like to remind myself, “the buyer in Japan is never on your schedule”. To get things moving a bit faster than otherwise, requires us to understand what is slowing down the process. We are usually talking to one section in the company but the post buying decision flow-ons will affect many sections within the organisation. Some will be much more affected than others and our job is to try and find out who that would be and what would be worrying them.
This is not that easy because we may never have the opportunity to meet that section and hear directly their concerns. Nevertheless, we need to ask our contacts for the lay of the land regarding who is pro and who is anti the new buying initiative. We can say, “I really appreciate all of your guidance and I understand that buying from us would be a new thing inside the company. I am sure there are many sections which would be directly impacted by making this change and based on your expert knowledge of the organisation, who would you say would be those most affected?”. The key at this point is to not dilute the power of the question by adding anything or by speaking. Don’t say anything and let them answer you.
After they have given you some hints on who will be most affected then we need to ask what would their particular concerns be? We can ask, “It is natural for the key sections you have nominated to take this change seriously and for them to investigate all angles involved. Often I have found that we have information which may not be known to these sections, which would change their perception of the ease of making the change. What would you say would be the major concerns of the ABC section?”. Again, we shut up and do not speak after asking the question.
It is important to keep digging. They may tell us some information about ABC section’s concerns, but we need to get more information. We should say, “Thank you for mentioning that. Apart from this concern can you think of other major hesitations which we may need to work on solving for them?”. It is often surprising that the key information doesn’t emerge, until we have dug down two or three levels. This makes sense though. The longer we give them to consider the question, the deeper they can go with their thinking, rather than just giving the first answer that pops into their mind, when we first bridge the subject. We should do the same for the other key sections which are most likely to be impacted by the change we are proposing.
At this point, we have built up a picture of the obstacles facing us to get this deal across the line and also regarding what we need to do to turn this deal into constant re-orders. The process will have revealed points of friction on their side to make the necessary new arrangements. We have to think about what we can do to remove or reduce those friction points. Perhaps we have to slow the process down to allow them the required time to make the adjustments. Maybe we have to eliminate some aspects of the deal in the first run and see if we can add these back in later, once things settle down. Maybe we have to adjust the payments schedule to fit in with their budgeting cycle or their current cash flow situation. Maybe we need to run a pilot test to help them fully understand what they need to do to make this solution work best for them. This is a low risk formula and once the option is proven, then ramping up the delivery of the solution gets faster and easier.
We are all creatures of habit and we prefer the Devil we know to the Angel we don’t. In the sales context we are the Angel they don’t know and we have to work out how we can make the change we are proposing as friction free as possible by fully understanding what they need to go through to implement it. To do this we need to be full professionals and ask intelligent, carefully constructed questions to unearth the information we will need. There are no shortcuts, it takes time and it is necessary if we are going to create the opportunity to get the re-orders.
Depending on your industry, times have been tough in sales. We see the Japanese Government trying to resuscitate the inbound tourism industry to increase jobs and revenues to gather more tax income. They are about to open the economy right up to stimulate business. Domestic tourism is worth about three times as much as foreign tourism contributes to the economy. There is a big kick opportunity there once Covid allows us all to travel more freely within Japan. Capital expenditures have been put on hold, as companies worry about the future of the economy. The weak currency self-selects winners and losers, so consumer spending may be impinged by inflation concerns. The kick on effect is felt across a broad range of businesses and so this may be an impediment to them opening up their purses and spending. Worries about a pending global recession driven by the war in Ukraine, energy shortfalls and supply chain issues, may also have company leaders thinking they shouldn’t start spending again and just wait and see.
Very few salespeople have been super busy over the last couple of years and most have been living a hard scrabble to produce results. This impacts our positivity and mental state about what is possible. We have also seen the numbers of active clients decrease and the volume of business deteriorate. Covid has shrunk our world and our mentality – we are mostly living small these days.
How do we adjust to a post-Covid world? Let’s be clear, the future isn’t great, as we will be alternating between bouts of the flu and Covid every year. Just like the flu, Covid will be killing off older people every year and weeks of productive work will be lost as people have to recover. Our clients will be cautious about any emergence from Covid and will be expecting the worst to happen. They have been conditioned to live small too.
We can expect that there will be pockets of client spending available to us as salespeople and our key job is going to be to identity these areas and concentrate efforts there. If a particular firm is emerging from Covid, we can expect that other firms in that same industry are doing the same thing and we need to get busy contacting as many of them as possible. Some won’t be ready but some will be ready to buy. We won’t know until we contact them. We have to keep in mind that we want to be the one having the conversation with them rather than our competitors. We will need to keep in close touch with them because at a certain point, a bell will ring and they will be back in the game. We just won’t know when that decision has been made internally, so we have to keep in touch and keep gauging the timing.
Having had no end of trouble getting hold of buyers over Covid, as everyone moved home and being blunted by the gatekeepers to the decision makers, a lot of salespeople are now gun shy about calling firms. They are sick of rejection and being treated like a nuisance, an irritant. The point to keep in mind is that this is exactly how your rivals are feeling too. If you make the effort, gird your loins and pick up the phone and call, you will have a jump on the competition. That bell will ring and it is key that we are the one to hear it and get the business, when the client is ready to come out of their cave and reengage with the world.
The prospecting muscle has atrophied during Covid and now is the time to get working on strengthening it again. Better to go early than to go late.
There will be a lot of changes inside firms as well. No one goes through a global pandemic unscathed. Whatever was the reality before, there will be changes and we need to understand how the buyer sees the world going forward. What are the new problems they are facing? Has there been any changes in how decisions are made? Have certain key people left the firm, especially our previous champion? Where did they go and can we help them in their new company? What are the firm’s immediate priorities? Is there capital to invest in expansion or recovery? Do we have the right solutions for this new world or are we imagining we just go back to how it used to be?
A lot of our assumptions and corporate intelligence may now be irrelevant, so we have to go back to basic questioning of buyers about what they now need, almost like starting over again. Have we been able to work on strengthening the value line-up of what we provide. Our workload may have declined during Covid, thereby freeing up time to work on creating added value for when it was time to re-join the battle. Did you manage that? Is there still some time to allocate resources now before things heat up again? Perhaps your early interactions with previously inactive clients have recently yielded up some hints on things you should start working on to add to your line-up of solutions. Can you take some of the friction out of your processes for your buyers? Can you increase prices by adding some extras which have perceived value when judged by the clients?
If we approach things with no presumptions, an open mind and reinvigorated flexibility, we will be able to handle whatever the market throws at us. I personally will be very happy to be back in the mud and blood of chaos and battle duking it out with my rivals for the client’s business. Let me at them!