Doing business in Japan information
by Venture Japan
Japan's traditional 'job for life' and the unusually strong relationships it allows salespeople to build with buyers over 5, 10, 20 years or more, has substantial revenue advantages in the corporate sales arena. The longevity and intimacy of Japanese 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 of course simply loyalty.
Why have Ford, Chrysler (excluding Mercedes-Benz) and GM cars been so unsuccessful in Japan despite domination US and European markets? Most likely because they have not been able to break 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 is similarly becoming perceived as a prestige marque by many Japanese.
Loyalty is a respected value of Japanese culture and most customers are incredibly loyal to those suppliers that they perceive are loyal to them. Japanese customers are conservative and are used to long-term relationships where the salesman intimately understands the customer's likes and dislikes. The reliance upon the relationship is so strong that many corporate customers will often only drop a supplier if given a convenient excuse such as the retirement of the salesman responsible for their account. The longevity of Japanese customer relationships is of course a double-edged sword - customers naturally expect few mistakes from long-standing account managers, become incredibly demanding of the supplier and intolerant of complacency.
Japanese companies understand the expectations of their 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, as proven 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 Western authorities on sales techniques and is often a central theme of many sales training programs. In books on business and sales, authors such as Harvey Mackay, Tom Peters, Mark McCormack, Zig Ziglar and others, often use an archetypal 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 standard 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. 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 to get things done more quickly.
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