corporate sales in Japan


Customer loyalty is the hidden trade barrier

2.  Customer loyalty is the hidden trade barrier

In the previous section introducing Japanese corporate sales, I noted the Japanese salesman's perseverance and almost servile humility - the price paid to initially get a buyer's attention and establish a relationship. After 5 - 10 years that relationship will be almost unbreakable; proof that in Japanese corporate sales (as in other areas of doing business in Japan) the traditional 'job-for-life' and the depth of relationships it allows salespeople to build with buyers over 5, 10, 20 years or more, has huge advantages. This longevity and intimacy of buyer-seller relationships is possibly the most difficult aspect of Japanese business for many foreign companies doing business in Japan to understand and is wrongly perceived by many foreign executives to be an invisible trade barrier - it is in fact simply loyalty.

Why have sales of Ford, Chrysler (excluding Mercedes-Benz) and GM cars been so unsuccessful in Japan despite those three companies having dominated US and European markets (and of course Ford owns Mazda)? Most likely because they have been unable to break through the loyalty that binds Japanese consumers (and automobile distributors) to Japan's manufacturers. Breaking through that loyalty is far from impossible though - BMW and Mercedes-Benz are hugely successful and prestigious in Japan and Jaguar (also a Ford subsidiary) is similarly becoming perceived as a prestige marque by many Japanese.

It is important to understand that loyalty is a very respected value of Japanese culture and most customers are incredibly loyal to suppliers that are perceived to in turn be loyal to them. Japanese customers tend to be conservative and are used to long-term relationships where the salesman intimately understands the customer's likes and dislikes. Many corporate customers will drop a supplier if the salesman responsible for their account retires or is constantly rotated (the latter being perceived as a sign of instability). The longevity of Japanese customer relationships is in fact a double-edged sword because customers naturally expect few mistakes from long-standing account managers, become incredibly demanding of their suppliers and intolerant of complacency.

"..exemplary customer relations may be unusual in the US and Europe but are the norm in Japan.."

Of course Japanese companies understand the expectations of domestic customers and train their salespeople to exemplary levels. As noted in the previous section, salespeople in Japan spend a lot of face-to-face time with customers checking on every detail of the relationship and typically understand their customers' business strategies as well as do the customers' employees. A salesman (or a company) that can succeed in Japan will succeed anywhere - proven I guess by the number of Japanese companies dominating various world markets.

The sales power of totally customer-oriented service and relationship building has often been noted by some of the West's leading authorities on sales techniques and at least during the 1990s was a central theme of many sales training programs. In their books on business and sales, authors such as Harvey Mackay, Tom Peters, Mark McCormack, Zig Ziglar and others, often use a similar archetypal example of an automotive salesman who, having worked at the same car sales lot for 30 years and every year sent birthday cards, Christmas cards etc. to his customers, benefits because they would not dream of going to anyone else for their next automobile. Such exemplary customer relations may be unusual in the US and Europe but are the norm in Japan and are being created everyday by regular Japanese salespeople as a fundamental part of the job.

Every foreign company starting business in Japan, even those selling solely to Japanese consumers, needs to create relationships with Japanese companies - whether distributors, trading companies, landlords or suppliers - to break into the Japanese market. Unless you are fortunate in having a unique product or service that cannot be obtained from a competitor, then you will need to break through the most difficult barrier to your success doing business in Japan which is not a government or regulatory barrier but simply that of customer loyalty to existing suppliers (or maybe to existing processes and procedures!). So how does a foreign company break through the loyalty barrier to be successful doing business in Japan?

Based on 13 years of meeting, presenting, negotiating and successfully closing sales with some of the largest Japanese companies including Fujitsu, Honda, Hitachi Shipbuilders, Nippon Steel, Sharp, Sony, Takenaka Komuten, Toshiba, Toyota and Zuken, I have found that the secret to success with Japanese corporate sales and doing business in Japan for a foreign company is simple - emulate the way Japanese competitors sell and support, while leveraging your foreign business culture and the fact that you are not Japanese.

3.  Success secrets of selling in Japan >>

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