A division of Soft Landing Korea Ltd.
By Tom Coyner
May 9, 2006
An engineer with one of the world's largest computer companies came to Korea. Having worked in many countries with his corporation, he was struck with what he found in the Korean operations. “The lads aren't really salesmen - they're just order takers!” he quipped.
Korea is famous for its relationship selling in large business-to-business transactions. Traditional selling in a close-knit society requires personal relationships to generate leads and sales. Salespeople will latch onto their school friends' networks to get entry. “Cold-calling’’ is much less common here than in many countries.
Yet, managers need to monitor salespeople’s use of personal networks. Personal networks often produce results that may first look good, but they encourage passive, personal selling and discourage the learning of professional selling skills. Getting Korean sales people to sell outside of their comfort envelopes often takes a strong manager. Moreover, when a key contact - be he seller or buyer - leaves his company, often there goes the business.
Consider what happens with many corporate sales. A salesman hears from his personal contacts that a firm is thinking of buying a product or service. A good salesman will get in the door before the publicly announced bidding process begins. The buyer has recognized a problem but often doesn't have a handle on what is needed. Consequently, the first formal sales call seems to hark back to Market Day when buyers would stroll through the outdoor markets to see what the vendors had displayed on their mats. With very little qualification, the salesman gives a company and, high-end, all product overview presentation; then waits for questions from the prospective buyers in the room. If he is successful, the buyer concludes the seller may have something of potential value worth exploring in a follow-up meeting.
From the beginning, the salesman assumes the role of a lowly order taker. He is at the disposal of the prospect. There is very little or no problem-solving partnership. The buyer holds the gold and thereby determines the entire solution selection process.
Since the salesmen specialize in schmoosing key people, they are often not well prepared to advise which solutions are best for the customer. When possible, they will bring with them specialists such as sales engineers. But since the salesmen are responsible for orchestrating the sales cycle without a strong solutions orientation, they reinforce the "checklist’’ process mentality of the product selection.
While personal relations are indeed a major factor in making the final selection, to be come a finalist it often comes down to scoring high with plus check marks on the vendor selection list. The irony is that the buyers often make up the selection list in the blind. Good salespeople will attempt to influence the selection criteria. Sometimes they are successful but often another salesman has overriding control of the checklist. Regardless, there is often a minimum of interactive discussion between the salesman and his customer in effectively developing an understanding of what is the real - as opposed to the immediately perceived - problem.
The net result may be a vendor’s solution may be the best fit but looses to a competitor’s product that better fits the selection checklist - without adequate consideration of the nature of the problem. When it comes to similar checklist scores between vendors, cutthroat price negotiations become even more dominant in deciding the outcome, leading to scenarios I will cover in another article.
To counter this, some companies have been training their sales forces in consultative selling. Local firms - including some foreign firms that have been in Korea long enough to be considered localized - often display only minor interest in consultative, professional sales skills training. The question may be that perhaps they know something the foreign firms do not. Perhaps, but often it is simply being satisfied from being to market first and thereby having predominate market share.
The danger to any company is to simply hold market share and be smug about its sales acumen when, actually, the company is place holding or account farming rather than generating new sales accounts.
In Korea, replacing a legacy vendor is extremely tough. Close personal relations between salespeople and customers often goes beyond what may be considered normal post-sales support - such as providing personal favors, among other things. Commonly the customer alone may know how a system or technology has been uniquely applied within the customer’s environment but without adequate documentation. Consequently, if the customer’s resident guru is not well disposed towards a new vendor, successful implementation can be virtually impossible.
All of this cries out for the need for consultative selling. Professional selling in any country is much more than simply getting the contract signed. It also ensures that a consummated deal translates into profitable business with a satisfied customer. I will discuss that in future editions.
Tom Coyner is president of Soft Landing Korea, an international sales consulting firm and co-author of an upcoming book on a practical guide to doing business in Korea.