Each article in my Getting to China series defines and outlines a different ‘P’ from my 5Ps of Global Marketing FrameworkTM.
In the introduction to the series, I outlined how to assess China as a viable market. The first article then discussed why redefining Product for emerging markets, like China, is essential to your competitive position. The second “P” was all about Price, and why you must defend your premium Canadian product.
In part three of the series, we’re looking at the Promotion “P” of the framework.
Promotion: customer relationships and cultural IQ.
The ‘Promotion’ P, which I’ve evolved to be called Customer Relationships and Cultural IQ, is essential to your business success in emerging markets.
With the evolving dynamics of global trade and the power shift in the source of influencers, it’s more important than ever to adapt your business practices to reflect your buyers. Do this by learning from China and other emerging countries, who often do business differently than we do in the West.
I call this developing your Cultural IQ. In emerging markets, customers have different expectations. Business practices are also different from what you know. Moreover, business leaders place varying levels of importance on decision-making criterion. How do you know where you stand? Understanding the nuances of culture can be the underpinning of making a sale in China. You may think of cultural knowledge as being a ‘nice to have’ soft-skill, but it can actually make or break your success in business in emerging markets.
In China, having a cultural IQ means adapting to local ways of business. Strong relationships are particularly important and oftentimes are the single most important influence on business decisions. For example, when a buyer in China decides who they’ll do business with, it often comes down to how well they know and trust you.
While Westerners can be polite and cordial, they often seem rushed and bring with them a ‘get down to business’ attitude. There is an apparent urgency to accelerate the time to close business, make the sale, get the P.O. signed and move on to the next client. But as I discuss one of my Google Talks, this doesn’t work well in China. You can’t just fly in on Monday and expect to secure new business by the time you you fly out on Friday.
Developing relationships is a central aspect of conducting business in China. The Chinese culture is very big on building relationships and trust over time. This means you will require many and variable meetings before a client in China will decide they trust you enough to get into business with you.
Chinese business leaders practice this long-term view with their customers worldwide. They are good at seeing the bigger picture. They’re strategic about long-term relationships, and the win-win outcomes of nurturing those relationships.
In the West, there is a tendency to see business as separate from personal relationships. But in China, there is an expectation that the two are intertwined.
It’s not just B2B, the Chinese take customer relationships seriously as well. Unlike the transactional approach we’ve become used to in the West, companies in China believe in offering more than just offering 24/7 service as a value add.
Chinese companies take a highly personal approach to client relations – inviting customers to events, facility tours, family cottages and holiday parties. This builds trust over time and allows both sides to get to know each other and their intentions.
Ken Wilcox, Chairman of Silicon Valley Bank who wrote the foreword in The China Factor, says: “In my opinion the biggest challenges are around these kinds of cultural issues. I think all of us recognize the ones that you can learn about by taking a two-day cultural sensitivity course, but . . . the longer I live in China, the more I realize that the real cultural differences are much more subtle.”
Business and personal relationships are intertwined.
If there’s one thing Western companies should be willing to change when it comes to building effective customer relationships in China, it’s their view on how long a relationship—with business partners and customers -- is expected to last. In China, it’s not just about getting the purchase order signed and then disappearing until you think your customers are due for renewals or upgrades. Take a longer-term view of a customer relationships if you want to woo their loyalty.
In China, the primary decision-maker or influencer, and the process for doing business, isn’t always obvious. The Chinese understand well the importance of people skills and the positive impact of relationship building and influencing at all levels in the organization, from the top down. Adopt that practice as well. Get to know people at all levels of a customer organization and those in government agencies, who are often an integral part of the sales and partnering process.
Influence outside the customer organization too.
Western companies are often overwhelmed by the Chinese government bureaucracy. Rules and regulations for foreign companies and the barriers to entry are not always so obvious up front. Instead, they seem to pop up during the expansion process.
Consider hiring a local and savvy expert. But be cautious; in China, everything is based on relationships. Make sure your representative is entirely on your side with only your interests in mind.
Just be nice: Practice a high-touch customer relationship model.
It may sound simple, but by developing your cultural IQ you learn the considerations customers in emerging markets value most. Some call it the “schmooze factor”. It involves being interested in others’ needs and situations outside of the business goal; being cordial, hospitable, patient, understanding etc. And there are also nuances to consider.
I was hosting the minister of telecom of an African country years ago, and I thought we had the deal in the bag. Then he gave me a heads up that they’d decided against us. They chose our Chinese competitor instead, despite their lesser product offer. When I asked him why, he simply stated it was because they were ‘nicer’ to them.
Build a relationship— a human connection with your customers. When you see them as unique and important, it builds trust. Trust makes relationships stronger. Stronger relationships increase the likelihood of longer-term business partnerships and positively impact your revenues.