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Busting Korea's Myths on Sales

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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