Japanese corporate customer loyalty

Japanese corporate customer loyalty

In the previous section about how Japanese salespeople manage first sales to Japanese companies, we noted the Japanese salesperson’s perseverance and humility in repeatedly, but without once harassing, visiting a prospect company. Whether through a typhoon in the wet season, or through 38-degrees and repressive humidity in summer, that is the work a Japanese salesperson does to get a corporate buyer’s attention and start a relationship; I know because I’ve done it. If successful, the Japanese salesperson will create a relationship that will become almost unbreakable. Why unbreakable? In Japanese corporate sales, as in many other areas of doing business in Japan, Japan’s traditional lifetime employment means salespeople on one side and buyers on the other, can build very strong relationships over the 5, 10, 20 years, or even longer, they hold their positions. The longevity and intimacy of buyer-seller relationships between Japanese corporations is possibly the most difficult aspect of Japanese business to understand for foreign company executives setting up in Japan; it’s the invisible trade-barrier called customer loyalty. Even in present-day Japan, when lifetime employment is gradually giving way as younger workers look to change employers mid-career, there are enough employees who stay with their company for life that the effect continues to influence corporate sales.

Why have sales of Ford, Chrysler (excluding Mercedes-Benz), and GM cars been so unsuccessful in Japan, despite those three companies succeeding elsewhere and despite Ford owning Mazda? Most likely because they have been unable to break through the loyalty that binds Japanese consumers and automobile distributors to Japanese 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 also perceived as a prestige brand by many Japanese.

It’s important to understand that loyalty is a very respected value of Japanese culture and most customers are incredibly loyal to suppliers they perceive as loyal to them. Japanese customers are often conservative and used to long-term relationships where the salesperson intimately understands the customer’s needs. Many corporate customers will drop a supplier if the salesperson responsible for their account retires or is constantly rotated, especially as the customer might perceive the latter as a sign of instability. Such long-lived customer relationships are also a double-edged sword; customers expect few mistakes from long-standing account managers and become incredibly demanding of their suppliers.

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; they often understand their customers’ business strategies as well as do the customers’ employees. The sales power of totally customer-oriented service and relationship building is often noted by some of the leading Western authorities on sales techniques and 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 used a similar example of totally customer-oriented service and relationship building. The example would usually involve a car salesperson 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 car. Such exemplary customer relationships might be unusual in the US and Europe, but are the norm in Japan, where everyday regular Japanese salespeople manage exemplary customer relationships as a fundamental part of the job.

Every foreign company starting business in Japan, even those selling solely to Japanese consumers, needs to create customer relationships to break into the Japanese market. Unless your company has a unique product or service that cannot be obtained from a competitor, it must break through the most difficult barrier to your success doing business in Japan, which is not a government or regulatory barrier, but simply the barrier of customer loyalty to existing suppliers. So how does a foreign company break through the loyalty barrier to successful selling in Japan?

Based on more than two decades of meeting, presenting, negotiating, and successfully closing sales with large Japanese corporations such as Fujitsu, Honda, Hitachi Shipbuilders, Nippon Steel, Sharp, Sony, Takenaka Komuten, Toshiba, Toyota, and Zuken, I found that the secret to success with Japanese corporate sales and doing business in Japan for a foreign company is simple: copy how Japanese competitors sell and support, while leveraging foreign business culture and the fact that your company is not Japanese.

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