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Busting Korea's Myths on Sales
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By Tom Coyner
Korea Times
July 27, 2007
With August around the corner
and many buyers making vacation plans, it's a good time to re-evaluate one's
sales strategies -- and assumptions.
About six years ago our sales training director, Choi Yeri, put together a
summary of sales myths based on our selling experiences in the U.S., Japan
and Korea. Contrary to prevailing wisdom, there is much more in common than
different among international markets when it comes to truly professional
selling. Too often, culturally based myths are created as alibis for poor
sales results rather than the sales persons taking disciplined approaches
toward their profession as their counterparts are expected to do in finance,
manufacturing or any other business practice.
Here in Korea, we have stumbled across many alibis/myths for poor sales. But
among them, we have identified about a half dozen major ones that are so
well cited that they have taken on a veracity of their own -- regardless of
whether these myths are based on reality. We don't have space to cover them
all, but let's bust a couple.
Myth #1: Price Takes Precedence Over Value
Until very recently, Korean companies created and provided products or
services where the customer easily understood value. There was little
product differentiation, nor did the product or the service normally require
a customized solution. Creating value had very little monetary reward.
Therefore, reducing price or simply providing additional products or
services free of charge became the natural solution when faced with
competition.
Furthermore, while individual buyers can differentiate among various value
propositions, their organizations systemically force down the price as
various middle managers desperately work to demonstrate their worthiness by
“improving'' on the proposal on perhaps the one aspect of the offer they
understand -- the price.
But too often it is the Korean sales person who almost always takes the lead
on reducing the price. For example, a salesperson takes a customer's
interest to the proposal stage. The customer tells the salesperson that he
or she has heard of a better price from a vendor of a similar solution.
Instead of finding out how one's solution will meet the customer's critical
business needs compared to competitor's solution, the salesperson starts
price negotiations.
A better approach is for the salesperson to take early, proactive measures
to gain the customer's agreement on the quantifiable value of the product or
service, focusing on a competitively advantageous aspect of one's offering.
This approach gives the salesperson control not only with the immediate
buyer, but also, when properly strategized, in more effectively dealing with
the purchasing and finance departments for large sales. Also, by doing this
early, a good salesperson can greatly influence the selection criteria.
The fact is, many sales competitions should not be simple “apples to apple''
comparisons. But too often the salesperson is either too passive as an
“order taker'' or arrives too late on the scene to be able to influence the
overall game. It is the salesperson's responsibility to position the product
or service in a competitively differentiating way at the beginning of the
sales cycle, which means before the selection criteria have been
established, or at least finalized.
For example, one of our clients has a world-class solution and is number one
internationally in its niche. Yet upon entering the Korean market, they
discovered that a handful of local companies had come up with solutions that
are incredibly feature rich that often prevail in “check list'' evaluations.
If the foreign company simply listed its features and price, there would be
little chance of being successful in Korea. We soon discovered the Korean
products' features were stand-alone functions and lacked the sophisticated
inter-functional processes that our client's product had. But more
importantly, we found that the Korean companies lacked genuine international
user support networks that can be critical for those users who need to work
with partners around the globe.
So our strategy is not to compete for smaller, domestic opportunities, but
to focus on just those end users who have large, multinational needs. In
other words, we redefined the market requirements from being based on price
and function number to having Korean buyers recognize the value in having a
global organization support their multinational needs.
Myth #2: Focus on Product Knowledge Rather Than Selling Skills and
Business Knowledge
This problem can be found among Western salespersons, but it seem to be more
predominant among Korean salespeople.
Until recently, Korean companies' main focus was simply producing and
selling and then training their sales force on product features. Salespeople
dutifully memorized all facts and recited them to customers. As the product
changes, the sales force received updated product training. To prevent
burnout, companies provided motivational type seminars, often based on a
star salesperson telling war stories. Some picked up hints and produced
better results; many were only momentarily motivated.
Product knowledge gives salespeople the basic ability to pitch the product
or service. But in a value-oriented business environment, it is the
salesperson's insight as to how the product or service will meet customers'
critical needs that will lead to a successful transaction.
We have often discovered general management does not adequately understand
selling beyond the numbers game. But executives often recognize they need to
do something to improve their sales force. So they arrange for some kind of
training -- and if they are wise, they spend resources on upgrading their
sales force's professionalism by investing in genuine sales training.
The most common shortcoming, however, is the sales training events last a
day or two, without ongoing, reinforcement of newly modified behaviors by
the sales managers and their executives. In other words, in a matter of
weeks, salespeople are allowed -- and sometimes encouraged --to go back to
their old habits. The wise executive, however, will look at the training
event as just a kick-off to a new process that requires managers to be
trained and to be constantly encouraging the sales force to adopt new
habits. Otherwise, “flash in the pan'' sales training can be a waste of time
and money.
Myth #3: Emphasis on Personal Relationships Rather than Business
Relationships
Most people realize that Korean society operates on the principles of
familial, scholastic, business or regional connections rather than on
egalitarian principles. Underlying this is the psyche called “jeong.''
(“Jeong'' is similar to the English word “heart'' -- as in the
Broadway hit Damn Yankees' song, “You Gotta Have Heart!'') For
Koreans, having jeong -- and being seen to have jeong -- is
crucial. So it is common practice for Koreans to make business decisions
based on jeong -- cultivated through relationships.
But as Korea moves toward a more open society, business methods have become
more practical, with accountability and transparency becoming more
important. Increasingly, buyers have to choose business partners who
understand their organizational needs, who achieve solutions and who can
meet the organization's objectives, rather than simply possessing personal
relations.
Furthermore, as the pace of technology and business innovation quickens,
prior existing personal relationships may not be able to keep up with
pressing business needs. Many legacy relations will be leveraged forward --
but not all. Given this gap between old friendships and immediate business
demands, gaps are being formed where the astute and trained sales
professional can find new opportunities where once there were none.
Tom Coyner is president of Soft Landing Korea (www.softlandingkorea.com),
a sales-focused business development firm, and co-author of Mastering
Korean Business: A Practical Guide.
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