Episode #343: Reducing Buyer Friction In Japan

Victor Antonio is one of my favourite podcasters on sales and he recently had an episode on reducing friction in the sale. This got me thinking about how would that work in Japan? A big barrier to sales in Japan is the culture. I remember a business contact of mine, a long time Tokyo resident, who moved from Japan to Hong Kong a few years ago, pre-pandemic. I asked him what differed from doing business there compared to here. He noted a big difference in Hong Kong was businesspeople there were “interested in doing business”.

I asked him what he meant by that? He replied, “In Japan when you go to a networking event, people are not interested in meeting new people all that much. There is a lot of hesitancy in Japan and a fear of new people they don’t know. In Hong Kong, everyone is interested to find out if there is a way to do business together and build their businesses”. I thought about that statement and actually it is true. When I go to the Japanese language only business networking events, as opposed to the international Chamber of Commerce events conducted in English, there is a big difference.

At the Japanese only events, very few people will walk up to someone they don’t know and introduce themselves. I do it, but I am a gaijin and the same rules don’t apply to me as much as they do to Japanese businesspeople. I have had to train my Japanese sales team to walk up to people they don’t know and meet them, because left to their own devices, they would do what everyone else does, which is not all that much.

The accepted play here is to seek people you already know and talk with them and if they can introduce you to someone they know, then that is how you meet new people. I noticed with my team that they would meet someone new and then get stuck with that person all evening. They did this because that was a lot easier than bounding up to total strangers and meeting them. I always had a debrief with them on how many business cards they exchanged, to see how hard they “worked the room”. The latter, one of my favourite activities to find potential clients. In the early days it was pathetic, but after years of water on rock, they are now pretty good. The point is the way things work here, strangers are by definition radioactive and have to be treated with great caution. The other point is you can network here in a Japanese context and find new buyers, if you have the leadership guts to make sure it happens rather than hoping it will happen organically.

This fear of the unknown extends to decision-making being slow and tedious. No one gets fired for missing a business opportunity, failing to save money or not identifying new areas for growth. I was talking to a foreign business executive who worked as a CFO for a Japanese company in Europe. He had identified a way to reduce their expenses, but his Japanese Country Head boss would never agree to it, because it varied from what had been done in the past by his predecessors. In other words, there was the risk of a fresh approach being weighed against the additional benefit. Japanese business conservatism identified doing nothing as the safest decision on his watch while leading in that foreign clime.

Invariably, a change in supply represents a risk and if we are the one trying to break into the supply chain as a new entrant, we have to make sure we can reduce that conservatism as much as possible. The people we are talking to in the company are only a small section of the decision-making spider’s web inside the firm. We need to know what the other parts of the spider’s web are concerned about and try to address those worries,so that they can buy from us.

It is not always easy to pry that information out of the buyer, but we have to keep hammering away at it or we will never move the deal froward. We need to get on that first rung of the supply ladder, thus establishing our credibility and reliability as a trusted partner. This will require some creativity, far beyond what will be needed in other markets and we will have to convince our overseas HQ, that this is what we need to do to crack the Japanese market. Often, they are not supportive enough but they do a lot of complaining about the lack of results. We find ourselves caught in a dilemma without relief.

We might offer a results-based deal, where they pay nothing unless we deliver for them according to an agreed outcome. Getting agreement on how success will be measured is critical for this to work, which in some instances can be devilish to achieve. There may also be quite a delay between the start of the process and the results coming in, which can be hard to swallow, but swallow it we must.

We could offer a 100% money-back guarantee to make the decision easier. This won’t recover the time spent, but it will keep the investment safe in money terms and it won’t show up as a financial disaster if things don’t work out as expected.

Trial shipments are always good to test the system, quality and consistency of supply. The Just In Time system has spread to many industries. Clients are not holding expensive warehousing space anymore and they transfer that cost to us, the seller. The initial cost to the buyer of a trial shipment is quarantined and the scale is kept small to limit any blowback if things go wrong.

Therefore reliability is key, because if something does go wrong, the entire construct comes crashing down and people become very unhappy, very quickly. When I was in market entry, the first contracted delivery of a garden product literally sailed without the goods on board and the Japanese importer was livid. We had just burned his carefully hand-crafted, decades old supply chain and even worse, his trust component with his own buyers. It was a total disaster.

All of this free stuff costs money and adds time, but it helps reduce the friction. Remember, we need to be focused on the re-order rather than the sale. We need to get that first foot in the door in order to make it swing wide open for us. Look for ways in your industry where you can reduce the friction in the sale and make it a no-brainer for the buyer.