Six Korean Sales Myths that Have to be Broken
by Yeri Choi Coyner
April 2001Each country has its myths. The myths give its people a unique identity and provide the foundation of a common psyche. There are other kinds of myths – the myths in much smaller segments of society such as family or group myths. Business practices in different countries and cultures can also carry myths. I call this a collective business wisdom that were formed and adhered to over a long period of time and stay unchanged even after the paradigm has changed.
Through my professional observation as sales trainer and consultant and, above all, a long-time sales professional in the US, Japan, and Korea, I have identified six Korean sales myths.
1. Negotiation means reducing “price” (not “value” persuasion)
Value in sales term means either tangible or intangible part of the product or service that gives the buyer a unique advantage. It takes a developed economy to discuss “value” into a sales proposition. It’s often recognized through product differentiation, customization, and added services that provide a solution to the customer.
Until very recently, Korean companies created and provided products or services where the customer easily understood value. There was not much of product differentiation, nor the product or the service often required a customized solution according to unique needs of the customer. Creating value had very little monetary reward, if at all, in that landscape. Therefore, reducing the price or simply providing additional products or services free of charge became a quick and natural solution when faced with competition.
2. Focus on “product knowledge” not “selling skills and business knowledge”
This problem involves Western salespeople as well, especially among inexperienced and unsuccessful ones. However, it seems to be more intensive with Korean salespeople. I can think of two reasons for this.One reason is that most products Korean salespeople sold in the past did not require in-depth knowledge of buyers’ needs because the value of the product or service was a pretty much straightforward proposition. For instance, there’s no doubt that a buyer needs an air-conditioner with basic functionality in summer.
Another reason, in my opinion, has something to do with Korea’s Confucian order and ‘rote education’ system. From kindergarten to university, teachers instruct students the facts contained in the textbook. Students absorb and recite them in their exams. There is supposed to be only one correct answer to each question - only one way of looking at things that is the teacher’s way. No questions allowed.
Korean companies, whose main focus until recently was simply producing and selling lots of products, trains their sales force the product feature details. Salespeople dutifully memorize all facts and recite them to customers. As product changes, the sales force receive updated product training and the practice continued…
To prevent burnout, companies provide their sales forces motivational type of seminars based on a star salesperson telling war stories. Some pick up hints and produce better results but many get momentarily motivated only to be discouraged later when facing the market with unchanged habits.
3. Emphasis on “personal relationships” rather than “business partnerships”
Anyone who has been living in Korea for sometime realizes that Korean society operates on the principle of family and regional connections or what school you went to rather than on egalitarian principles in some developed Western countries. Underlying this Korean connection thing is the psyche called “jeong.” (“Jeong” is similar to the English word of “heart” as in the Broadway show Damn Yankees’ song “You Gotta Have Heart!”) It is very important for a Korean have “jeong.” Someone with no “jeong” will be categorized as ‘being selfish’ or even ‘inhuman.’ So it is a common practice for Koreans to make business decisions based on “jeong” cultivated through the relationship.
Maintaining a good personal relationship is important no matter where you do business. What matters is to what degree it influences business decisions. Buying and selling based on ‘jong’ largely attributes to the fact that Korean sales environment in the past did not have a need to take value much into consideration. If the result does not affect you or your organization whether you buy from one vendor versus the other, it makes obvious sense which direction you will lean toward.
4. Spend money on clients
Like many Asian countries, bribery is an age-old problem in Korea. When you want to get things done, the beneficiary will present money to the benefactor. Though this will be considered highly tasteless in egalitarian societies, in Korea, it was matter of fact.
In a business environment where one seller’s solution is not any different from others, the question as to who is the beneficiary and who is the benefactor becomes crystal clear. The worst case I have heard so far was in the pharmaceutical industry where it is almost customary for companies to pay off doctors in the form of rebates to get business.
Unfortunately, this, perceived as ‘not desirable but necessary’ practice, has been carried out even by salespeople belonging to foreign pharmaceutical companies whose products clearly offer higher value than those of the competitors. I have heard that recently, leaders in a few foreign pharmaceutical companies ban this practice leaving their sales force to seek alternative ways of winning sales besides paying off clients.
5. Sales is not a serious profession
Traditionally, under the Korean-style Confucian social order, the merchant class was placed in the bottom below farmers. Making a living by selling goods was regarded undignified. Although this thinking has changed dramatically, some of the old stigma still remains.
In addition to that, academic intelligence, which is highly regarded within modern Korean Confucian values, was not one of the requirements to become a salesperson. As stated above, Korean sales environment did not require salespeople to acquire professional selling skills. Nor did it demand constant update of sales and business knowledge to catch up with changing technology and shifting corporate environments.
The sales profession was often reserved for those who could not get into more competitive fields, save those for whom the company chose sales as a strategic training ground prior to placing them into more important posts.
To most Koreans, sales is a job that requires hard work and little respect except in monetary terms when successful. Very few believe that sales is a profession that requires breadth and depth of business knowledge.
6. Customer orders you. You don’t lead customer.
Confucian values discourage challenging someone with more authority (authority can include knowledge). From the above Korean sales beliefs comes another myth that is ‘Try to please the customer by providing what the customer wants without questioning.’
There is no doubt that customer is the king and therefore, you have to be customer-driven to succeed. However, that does not mean that a salesperson’s role is not to educate, lead, and mange the customer but to take orders from the customer. It is hard for the salesperson who has not gone through proper training and discipline of consulting, educating customers to have enough self-confidence to take the necessary leadership. Consequently, the salesperson ends up passing over the control of the business transaction to the hands of the customer.
The Korean sales landscape is changing and will continue to change more rapidly in the future as a result of deregulation, rapid technology changes, shifting corporate restructures, and above all, changes in more sophisticated consumer attitudes. Many value-added imported products as well as the products produced by technology-driven Korean companies are competing for a market share in more lucrative Korean market place. The changing environment requires a very different sales approach – a consultative approach to create value via product differentiation, customization, solution, and partnering, not by competing largely on price, product knowledge, personal relationships, and customer entertainment. Nor a good CRM will solve your sales efficiency problem though it will act as an excellent platform and tool to spot sales opportunities.
As the service factor will weigh more and more in the future in a product purchase decision making, the future Korean salesperson has to be a consultant, strategic thinker and business partner because it will be up to the salesperson to bring out the value in the company product or service to the customer. For that reason, training your sales force to acquire the necessary skills will be a sound investment.
Cultural myths can get in the way of transformation of thoughts. The myths imbedded in business practices can cut into your corporate profits unless recognized and countered.
Yeri Choi Coyner (yerichoi@netsgo.com) is a sales consultant and trainer. She has a consulting business “OnTarget Consulting.”