A division of Soft Landing Korea Ltd.
By Tom Coyner
September 6, 2007
This past summer, we explored a couple of "busted myths" regarding selling in Korea: "Price Takes Precedence Over Value," "Focus on Product Knowledge Rather Than Selling Skills and Business Knowledge," and "Emphasis on Personal Rather than Business Relationships." Certainly most myths have at least a kernel of truth within them. But too often business people stop at a relatively shallow understanding level. Anyway, The Korea Times keeps these management columns on their Web site and if you search on my name, you can find prior my sales myth article.
Today, let’s see if we can bust four more sales myths.
'Spend Much Money on Clients'
Korea is very much a gift-giving culture. As such, bribery can be a problem. Traditionally, to get things done, the beneficiary would present money to the benefactor. Though this is considered tasteless in egalitarian societies, in Korea, it was matter-of-fact. When I was here in the 1970s, the expected bribe was about 10 percent of the transaction value.
In a business environment, where one seller's solution is little different from other’s, the question as to who is the beneficiary and who is the benefactor becomes crystal clear. Among the worst cases we have heard were in the pharmaceutical industry where it was almost customary for companies to pay off doctors in the form of rebates to get business. But, with European and American firms, partially motivated by home country legislated overseas anti-corruption regulations, things have changed.
Unfortunately, the perception persists that this practice is "undesirable but necessary." It has been reinforced even by Korean salespeople working for foreign companies whose products clearly offer higher value than their competitors. Managers in several foreign pharmaceutical companies have banned this practice, forcing their sales forces to seek alternative ways of winning sales besides paying off clients. And to the surprise of many, these no nonsense directives, along with dismissals of sales managers for noncompliance, are working.
While this remains a problem with large sales to second-tier and lower firms, the largest Korean companies have tightened up on this form of corruption and its resulting inefficiencies as they play greater roles in international commerce. Also, the South Korean government’s constant push for transparency as part of its plan to transform the nation into a regional economic hub has had a chilling effect on some of these past practices.
So, how does one outmaneuver one’s competitors without entering the bribery game? One way is to help customers perform their business more efficiently. It could be feeding them useful information. It could be listening to customers' problems and trying to provide solutions that are within their reach. Most reasonable customers will eventually recognize that being helped professionally is more advantageous to their careers than simply being paid off.
On the other hand, if one feels the only way to succeed with a customer is by bribery, it may be wise to reconsider if one wishes to enter a long-term relationship with such a customer. The total costs of sales may start with a bribe today but expand into unreasonable project creep and unprofitable support demands tomorrow. A "no sale" to this kind of customer may have a better impact on one’s long-term profit & loss statement.
'Sales Is Not a Profession'
Traditionally, Korea’s Confucian social order placed the merchant class at the bottom. Even the peasants regarded making a living by selling goods as undignified. Although today’s Koreans no longer think this way, some stigma remains.
Intelligence, which is highly regarded within Korean values, has traditionally not been a requirement to become a salesperson. As one Korean company president confided to us, ``both our salesmen and their buyers are not so smart.’’
Given this traditional Korean sales environment, managers have not required salespeople to acquire professional selling skills. In fact, many Korean sales managers at best vaguely understand what is professional selling beyond being on top of product knowledge and knowing how to effectively schmooze prospects and customers.
Many Korean firms have done little -- or been ineffective -- in constantly updating the sales and business knowledge of their sales forces to keep pace with changing technology and shifting corporate environments. The sales profession has too often been reserved for employees who could not get into more competitive fields --save those for whom the company chose sales as a strategic training ground prior to placement in "more important" posts.
To most Koreans, sales are a job that requires hard work and little respect (except in monetary terms when successful). Very few believe that sales are a profession that requires a breadth and depth of business knowledge.
There is an encouraging sign, though. In some foreign tech companies, salespeople wield considerable power. This could be because it takes intelligence to understand the complexity of hi-tech products, and/or recognition of the contribution salespeople make to their organizations' bottom line. When Korean salespeople start viewing themselves as problem-solvers for their customers and contributors towards their organizations' profits, they will raise the status of their profession. To reach this goal, salespeople -- and sales managers -- should constantly strive to obtain new knowledge and skills through continuing sales and business education and training.
'Customer Orders You. You Don't Lead the Customer'
Confucian values discourage challenging someone with more authority. This belief fosters another myth: "Try to please the customer by providing what the customer wants without questioning."
There is no doubt that the customer is king -- and perhaps God-- in Korea. Therefore, one has to be customer-driven to succeed. Unfortunately, many Korean executives have come to expect their salespeople to simply take orders and then work with others, such as fulfillment staff and engineers, on how to somehow meet the terms and conditions of the sales orders.
It is possible to train salespeople -- including Koreans -- to educate, lead, and manage their customers -- and not simply to take orders. It is hard -- if not impossible -- for Korean salespeople lacking in proper training on how to consult to customers to have the self-confidence to assume sales cycle leadership. Consequently, most salespeople end up placing the control of the transaction entirely into the customers' hands. When that happens there is very little management, but only monitoring of the sales cycles.
The solution requires the entire organization to provide more than lip service to the business unit’s commitment to selling. Senior management must openly and routinely recognize that dedicated, professional salespeople are at least as critical and honored as anyone else in the organization. Beyond incentive remuneration, it is equally important to invest in their professional sales skills, as well as product knowledge, as a way of demonstrating how important these individuals are to the organization’s overall well-being.
'Koreans Buy Only From Koreans'
While it is true that Koreans prefer to buy from Koreans, one may also say that Americans prefer to buy from Americans. Normally the biggest problem for non-Korean salespersons is the language barrier and the presumed, accompanying ignorance of how to do business in Korea.
While foreigners who can converse competently enough to sell in Korean are rare, there is an increasing number of young Koreans who have English language skills who are willing to consider leading-edge foreign products from foreign sales professionals. To be sure, selling in English via foreign sales staff is not the easiest path to take. Yet, it should not be discounted at all times as several times English-speaking foreign salespeople have scored significant wins by selling into this market.
Koreans are a practical people and as much as they would naturally prefer to stay within their comfort zones, if a foreign salesperson has an exceptional product or service, it is possible to sell into this market when other options, such as partnering with a Korean firm or hiring a Korean salesperson, are not possible. The major caveat is that when selling in English, the necessity of sales call preparation is even greater than when selling in Korean.
Tom Coyner is president of Soft Landing Korea, a consulting group focusing on sales and human resources issues. He is co-author of Mastering Business in Korea: A Practical Guide.