How to B2B in Japan: What’s Culture Got to Do with It?
Here’s part 1 of the points covered in the Wahl+Case podcast episode with Bryan Rios, discussing how to do B2B sales in Japan, essential cultural aspects to learn, and practical tips based on my years both doing B2B sales as well as working adjacent to sales teams at Softbank Robotics and Ricoh.
Listen to the full conversation with Bryan here.
Subscribe to the Wahl+Case podcast for upcoming episodes where Bryan and myself will discuss, in-depth, how to B2B in Japan:
When you’re coming from a Western culture, specifically North European or US sales culture, Japan’s sales culture appears quite different and inefficient. And this can be very frustrating for companies looking to enter Japan’s market.
The challenges have a lot to do with how decision-making in Japanese companies and building relationships is different here.
However, when you understand where the differences come from, the sales process begins to make sense. You’ll feel less frustrated and you can have a more positive attitude about how to be successful here, which is a much more productive attitude to have than to be annoyed by the inefficiencies.
The B2B implications of Japan’s homogeneous culture
A good place to start is to look at the differences in culture. You may have read or heard that Japan is an extremely homogeneous country in terms of ethnicity and also culture—but perhaps you haven’t thought about its implications, which are the shared assumptions everywhere you turn.
In a way, this makes communication extremely efficient because you don’t have to explain everything on a zero-assumption basis or first principles. The problem then is everybody skips thinking from first principles and jumps right into the situation where you assume everybody has the same sort of “social understanding,” basically, what you might call a “social contract.”
I noticed this difference very clearly when I went on a business trip to the United States. In the US, so many things are explained from first principles. And that’s likely because the US is a melting pot of different ethnicities and different cultural backgrounds that if you don’t explain it in detail—or to put it casually, if you don’t “idiot-proof” it—then you run into problems.
But Japan, when it comes to B2B culture, it’s not idiot-proof at all. Because if you don’t know these assumptions, you easily look like an idiot. Learning these assumptions is considered part of a good education and also good training within Japanese companies before you’re sent off to interact with actual customers.
How it plays out: “common sense” is a social contract
You might have heard of the term “joshiki.” Joshiki means “common sense” in English. So someone with joshiki is somebody who has common sense, but in Japan, joshiki common sense is a bit heavier and a bit more demanding.
For example, saying somebody has joshiki is a compliment in the business world. It means they understand the system and how people think. It has nothing to do with logic, of course, or if it’s a good idea or a bad idea. It just means that person understands the culture. And this is really, really key. So, if you—as a person in B2B sales—comes off as someone who doesn’t have that, then that’s already a good enough reason to not buy anything from you. Even if it’s a good product or service.
In the US and in Europe, potential business partners will take a close look at the legal contract, the actual literal legal contract and really go through it in detail. Whereas, in Japan, particularly for smaller deals, a lot of business meetings advance without necessarily having a legal contract in place and that’s okay. The more important aspect in Japan is the social contract. The unwritten social contract plays a bigger role than the actual legal contract.
Business deals and business relationships in Japan are not primarily defined by the legal contract, or the terms of service for that matter—rather, a lot hinges on trust and credibility in order to sell. The question then becomes, how do I build that trust? In Japan, that means you have to show an understanding of how the customer thinks.
How to sell in Japan when decisions are made by the collective
The origins of Japan’s collective decision making is said to be rooted in our agricultural roots. As you know, Asian countries tend to eat rice. And rice farming is extremely labor-intensive, which means a lot of people have to work together, collaborate, and coordinate to harvest enough rice for the year.
Agricultural societies are different from, for example, animal farms or hunter-gatherer cultures where you can be more individualistic in your decision-making in order to get food.
Historically, it has always been important to know the social norms and act accordingly, because that was the way to be productive as a group. If you behaved as a free-spirited person, not caring about what other people thought, then you’d basically be expelled and you would have no rice. You would starve. Collective decision-making and being a respected member of the group was absolutely necessary to live, to survive.
The implications of collectivism when it comes to B2B sales
Decision-making in Japanese companies, especially if it’s mid-sized or bigger, is based on a collective decision-making process.
For example, say you’re sitting across from a person in a room. You might be tempted to think, “This is the person who is in charge of the buying decision.” That may appear to be the case based on the company’s organization chart, but the truth is, that person then goes back to the company and talks with their bosses and also the employees to reach a common agreement to make that decision.
Therefore, even if you convince that person in the meeting room, your sales deal is still far from done. It’s not enough to impress only that person in the room.
When it comes to B2B decision-making in Japan, you have to have in mind that that person then needs to convince other people in the company. So the way I would end a sales meeting is I would state out loud my “homework” for the next meeting—and the homework would be, “How can I help you to make the case for this product or service? What kind of information do you need from me? How can I help you create the material for the internal presentation in the company to make the case?”
And that becomes a great way to get a foothold into the company and create a reason for having another sales meeting.
The next sales meeting will then be, “What else do you need from me? … Let me gather that material, and I will show it to you at our next sales meeting. And maybe you can bring your boss or some of your subordinates who would actually use the tool [whatever you are selling] on a daily basis.”
Because, of course, you cannot expect that person who has been in your sales meeting once to be able to explain the benefits of your product so it’s better to pull in other people into the meeting so that you can talk to the other stakeholders directly.
So that’s how to structure a sales pipeline, from the first meeting to the second, third, maybe fourth meeting. All along the way, you create more and more material information to make—not just the decision maker comfortable—but also the stakeholders feel comfortable with your product and service.
Read Part 2 here, which covers the history of B2B sales and IT solutions in Japan, why SaaS is like the UNIQLO of IT solutions, and how to use your newfound understanding of the Japanese psyche to clinch sales.
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