Selling Services in Japan

You can’t touch, hear, smell, see or taste it, but please buy it! This is often the dilemma with selling services.

Japan adds a few additional challenges, just to make it more “character building”. The service sector constitutes over 70% of Japan’s GDP, so it cannot be ignored.

What are some of the local characteristics we should take into account when selling services?

The buyer we deal with is rarely a purchasing specialist. In Japanese firms, positions are rotated through the company to produce generalists. Promotions are given based on age and career stage, so staff progress along an escalator system toward management.

Purchasing specialists are rather rare in the service sector here. Training in Japanese firms is usually the on-the-job type, so that the limitations of the past are preserved for each successor generation.

Your buyer counterpart usually has a university degree, but invariably majored in varsity club activities, arubaito (part-time jobs) and having a good time rather than studying. Combined with the prevailing on-the-job-training, this does not produce individuals looking to be innovators or risk takers.

If you are a new supplier, then despite all the wonderful things you would bring to the client, your buyer counterpart definitely puts you in the high-risk category. If you have no track record here in Japan, all your claims are considered doubtful.

Years of experience have taught your counterpart that the best way to make sure there is no risk is to do nothing. Buying your snappy services is counter to that idea, so your ideas are not that attractive.

Unlike in other countries, buyers in Japan generally do not consider consulting as a paid service; most people expect advisory services to be complimentary. This can be a bit daunting if such services are part of your revenue stream.

Consulting firms here run into this issue regularly and have to adjust their thinking about their offerings.

Often the most difficult competitor is potential customers’ apathy about using your service. The need to introduce something new or to change what target clients have been doing is not strong enough to advance the conversation.

A second strong competitor might be an internal team already providing part of the service offering you bring to the table. The people on this team fear for their jobs, and thus do their best to keep you out, even though what you bring to the client would improve the competitiveness of their operation.

Existing suppliers represent a third potential competitor. In this case, trust has been built into the existing relationship(s), and Japanese firms generally prefer the devil they know to the one they don’t.

With so many intangibles revolving around the service offering you provide, applying any leverage and wedging your way in can be challenging.

Unhelpfully, buyers are moved every few years as they rotate through various positions in their companies.

That buyer you have educated about your service offering gets moved and replaced by someone who has their own networks or wants to do things differently. Neither of these options involves you unfortunately, and so you have to kiss that business goodbye until the next rotation.

The reverse works in your favour sometimes, as Mr or Ms Rude and Unhelpful gets shunted off elsewhere and someone useful turns up. Still, the moves are usually more painful than helpful.

Depending on the size of your operation, the media in Japan may be useful for getting a message about your service out there, although doing so might be expensive. Larger firms have better leverage opportunities than smaller operations when it comes to haggling over ad pricing.

Establishing brand awareness relies on sustainability. Spot activities may work, but usually “water on rock” continuity is what is required here, and that is expensive in Japan. Public relations activities may be a better alternative.

You might think that improving your sales effort is the answer to overcoming all these character-building challenges I have listed. Sadly, your own sales team may also be poorly skilled and poorly led.

Very few salespeople are properly trained, and if on-the-job-training has been their total curriculum, they will likely underperform.

If you have inherited the people on the team, you probably expected them to know what they are doing, and also expected their sales manager to be competent. That is way too generous, I would suggest. It might be a good time to audit the team and check those assumptions.

We do a lot of sales training across all industries, including services, and often the foreign company president struggles to understand why sales are not satisfactory. The answer is usually that the salespeople have relied on relationships and branding to make the sale, rather than applying any sales acumen.

“They are Japanese, so they know what they are doing” is the thinking. Good luck with that one!

You can’t control the cost of media, the rotation of generalists through various positions, the risk aversion of buyers or what your various competitors are doing, but you can control what you are doing.

Take a cold, hard look at your sales manager and sales team and really dig into how they are approaching the sale. You might be very surprised.