|
 Hi!
My name is c.j., your trusted Sales Advisor, and
here's the November 2009 issue of Psyche-Selling TM
eNewsletter.
It’s been quite a while since I had this niggling
feeling that somehow the relationship, or
guanxi,
between buyer and seller has been changing. It’s only recently
that I got a case study to demonstrate the extent
guanxi
has changed in China.
Hence, this month's topics:
-
The End of
Guanxi as We Know It;
and
-
How to Shift Your Customers’ Attention Away from Price, and
Get Them Buy on Value
This issue's main article is on "The End of Guanxi
as We Know It!", and it will change ALL your perceptions about
guanxi, and the means to handling it. Best of all,
this is based on a “live” case that’s unfolding as this time of
writing.
In brief:
-
In the past, some customers in China will buy from you if you had
cultivated the right
guanxi
with the right people in the buyer’s organization. That will
be an unlikely case now, even in some remote parts of China;
-
This is not to say that
guanxi
or relationship building has failed to deliver results. Rather
it is the dynamics of inter-connected relationships that determine
the outcome of your sales results;
-
To effectively win sales and generate profits in China, you will
have to approach
guanxi
from a more holistic and integrated approach. Read on...
...
To read the rest of this newsletter, pls.
click here (http://www.psycheselling.com/page4.html).
Also, if you happen to be in Singapore on 23-24 November, you may
want to join my workshop on
"How to Hire, Lead and Motivate Winning Sales
Teams in Challenging Times". Looking forward to
seeing you there!
The End of Guanxi as We Know It!
by c.j. Ng
While China is rapidly changing in terms of
its economy, society, as well as technology, so is its nature of
relationships or
guanxi. Here’s a real-life case that’s just unfolding
at the time of writing that will change whatever perceptions you had
about
guanxi and how to deal with it. And it’s likely to be
the norm, rather than the exception.
I have a friend (actually, a friend of a
friend) who specialises in cultivating good guanxi with
government officials in small towns across China. The
objective is simple: explore if there’s any infrastructural projects
in that town, and then leverage the guanxi or relationship
with the local official to get the deal.
For a long time, it didn’t matter if my
friend had the right expertise or experience handling such projects.
As long as the official nods his head (yes, in almost every case,
they are male), my friend gets the deal. Of course parts of
the proceeds from such deals will be “donated” to these officials.
Prior to clinching such deals, my friend will do his
fair share of dining and entertaining these officials to cultivate
the
guanxi.
Such “bonding” activities include:
-
Paying for the officials (and his family sometimes) for “business
trips” to Shanghai (the business of shopping and eating, that is);
-
Paying for the officials and their buddies for their day/ night outs
at the golf courses, KTVs and other adult entertainment venues;
-
Providing gifts to the officials family members, which sometimes can
be putting up the officials’ children to school in overseas
universities, etc.
How the Tide is Changing
Needless to say, as China is cracking down hard on
corruption, my friend finds it harder and harder to do business with
these officials. However, the turning point came in a very
interesting twist.
As usual, my friend had cultivated very
good
guanxi
with the mayor of a small town, which happens to need to install
some new street lamps. Having invested years of hard work (and
hard-earned funds) in cultivating the
guanxi,
my friend is very confident that he will get the deal.
Then, one fine day, he got a call from another person
who claimed to be his competitor in the bid for the street lamps.
The competitor told my friend that he knew about all that’s
happening between my friend and the mayor, AND that this competitor
had the expertise as well as the right hard ware to be the much
better solution. The competitor then offered my friend a
“withdrawal fee” of RMB 500,000, i.e. if my friend withdraws from
the project, he gets paid RMB 500,000.
Having full confidence in his
guanxi
with the mayor, and not believing that this competitor have what it
takes to win the project, my friend chose to go ahead with the
bidding.
Sure enough the competitor turned up with all the product samples,
blue prints and all supporting documents to show that they are
really the professionals in this business. My friend only
presented a few pieces of paper that didn’t say much. The
mayor had to award a small part of the business to the competitor,
and in a bid to salvage the situation, offered my friend to return
with product samples and detailed specifications on a future date to
bid for the larger part of the business.
That’s NOT the end yet. As my friend didn’t have the required
expertise in this field, he had to borrow more money to fund the
product samples, as well as to hire some lighting engineers to
provide detailed specifications. Still, there’s no guarantee
that after having done all these, he will get the business.
What Might Have Happened
At this point, you may think that the mayor
is not trustworthy, and the years of
guanxi
cultivation is not delivering any results. The truth, however,
is more complex than that.
The biggest question here is, how did the competitor
knew about the dealings between my friend and the mayor, on top of
getting the information the project scope? Isn’t the mayor the
key decision maker in this deal? If so, why and how could such
a turn of events happen?
While we don’t know exactly how the
competitor got all these information, we certainly can make educated
guesses of what might have happened.
One of the key mistakes that my friend, as
well as many sales people made, was to assume that the key decision
maker has got all the support from his staff. While most
subordinates show lots of reverence to their superiors, that does
NOT mean that they truly respect and obey their superiors.
-
Some of them may have an hidden agenda to make their superiors trip
and fall, so that they can be the successors;
-
Some others may sincerely want to get better products and services
for their infrastructure investment;
-
Yet some peripheral staff may divulge a lot of private information
after having 3 cups of baijiu (white rice wine that’s about 50%
alcohol)
As a result, even though you have an edge
with the strong
guanxi
you have, it doesn’t mean that you will get the deal for sure.
With an increasing emphasis on having clean
government (and clean corporate governance too), as well as a bias
for delivering results, Chinese government officials and senior
business managers are making their buying processes transparent and
open to scrutiny. Those that are still trying their luck in
getting “donations” or kick-backs from vendors are very much afraid
that such “under-the-table” dealings may be exposed. Hence,
the mayor had to award part of the deal to my friend’s competitor,
to appease the public.
Do No Evil
There are various lessons we can learn from my friend’s
mis-adventure. After this debacle, my friend has vowed to
change his business model away from pure cultivation of
guanxi.
However, any kind of transition is going to be painful, to say the
least.
While
cultivating the right relationships is still a very important
aspect of doing business and getting deals in China, the nature of
such relationships are fast changing from “what I can personally
gain by giving the deal to you”, to “how can you help me do a better
job so that I can look great in front of my superiors”.
Even when the official or key decision
maker hasn’t changed to a more enlightened attitude, their staff and
team members may have already progressed, and may quietly make some
moves to initiate change.
When cultivating or nurturing relationships
with Chinese customers, here’s what sales people will now have to be
mindful about:
-
Are there silent opposition in the customer’s organisation that will
jeopardise your deal? If yes, what can you do about it?;
-
What will be a safe, ethical and rewarding way to cultivate and
nurture the relationship? How can you reciprocate the
relationship without any fears of repercussion?;
-
Besides building excellent personal rapport with your customers,
perhaps you can also take time to understand the customers’ business
(and even political) concerns, so as to provide better and more
creative solutions that work.
Need
help in cultivating the right
guanxi
in the right way with your Chinese customers? Simply e-mail
info@directions-consulting.com or call +86-136 7190 2505 or
Skype:
cydj001 and arrange to buy me a cup of mocha. All
information shall be kept in confidence.
Power Breakfast Hour: 16 December 2009 (Year-End Bonus)
How to Deal with Guanxi, Request for Kick-backs AND Price Objections
in China
Join International Sales Leadership and
Performance Coach c.j. Ng in this Power Breakfast Hour in Shanghai
where he will be sharing with you how to formulate better strategies
that will meet your expectations in simple yet practical ways:
-
How to cultivate
and nurture guanxi in ways that are safe, ethical and rewarding
for all parties;
-
How to turn-down
the requests for kick-backs, yet STILL get the deal; and
-
How to shift your
Chinese customers’ attention away from price, and get them buy
on value.
VENUE: 567 Tianyaoqiao Road (near Xietu Road, Near Metro Line 4
Shanghai Stadium Station), Level 3, Senben Plaza, Shanghai
上海天钥桥路567号（靠斜土路，地铁4号线
上海体育场站）3楼
森本大厦
DATE: Wednesday, 16 December 2009
TIME: 08:00 a.m. - 10:30 a.m. (Year-End Bonus, 2
½
hours!)
PRICE: RMB 120 ONLY!
To make this a more conducive discussion,
we are expecting a small group of about 15 people only. The room can
only take in 18, so please register early to avoid disappointments.
Please e-mail your registrations to
sales@directions-consulting.com To allow more
participation from more companies, ONLY 2 registrants per company
are invited.
Pls. check out our web sites
www.directions-consulting.com and
www.psycheselling.com/page4.html for more inspiration.
Have a Sales Problem that You Can’t Solve?
In case you have some challenges when
handling customers, or if you have some issues getting your team to
produce better results, here’s what you can do.
Simply e-mail your challenges to
info@directions-consulting.com or call +86-21-62190021 to let us
know your situation, and we will give you some pointers within
48-hours.
It’s our way of saying, give us a try, so
that you can be the judge if you need our help whether it’s in the
field of consulting, coaching or training.
Practical Tips for Sales People:
3 Simple Ways to Overcome Price Objections
By c.j. Ng
Here’s a situation that most, if not all, sales people can
resonate with: you're selling value and the competition is
selling on price. You want the customer to pay a bit more
for more value, yet, all they say is “your price is higher
than your competitor.” You want to emphasize on value, but
ALL the customer says is “Give me the pricing!”
Here are some suggestions how you can overcome such price
objections
Ask
“Besides
price, what other buying criteria do you think is important
to you?”
If you are selling on value, and the customer is just asking
for your pricing at the outset, you can get them to focus on
other factors that are important to them, apart from price
Say
“I’m
glad you raised that question. Do you know why our price is
higher?”
If you really have something of value to offer, don’t be shy
about it. If your selling price is higher because you
provide more benefits and value to your customer, use their
price objections as the opportunity to educate them what
they will be missing if they don’t buy from you
Empathize with “I understand that your budget is limited.
But if we can prove that we can deliver better results, is
it possible to request for a higher budget?”
Sometimes, customers use “limited budgets” as the reason to
lower your prices. Other times, they really have limited
budgets, and may not afford your offering.
Whatever the case, show that you empathize with them, and
then get them to focus on their buying objectives. Chances
are, if they are willing to see you, there’s likely to be
some objectives they want to achieve by purchasing your
products and services. Clarify and re-emphasize what those
objectives are, and make sure they have a higher priority
over budgets or price.
Ultimately, while price objections are the most common
objections that sales people face, few customers buy based
on price only. If they don’t buy solely based on price,
that means they are likely to based their buying decisions
on the value you provide, and the strength of your
relationship with them.
In either case, it is your job to find out what are their
buying criteria (apart from price), be it to solve problems
or to be more profitable or simply to boost their image.
Whatever is their buying objective, if you can understand
what they really want, you will be in a much better
position to overcome their price objections.
For some deeper discussion on overcoming customers’ price
objections, e-mail
info@directions-consulting.com or call +86-136 7190 2505
or Skype:
cydj001 and arrange to buy me a mocha. All information
shall be kept in confidence.
About PsycheSelling.com
Sales... ...the
lifeblood of a company, a matter of "life and death", survival or
extinction. Indeed, something that needs to be studied,
applied and re-modified consistently.
Yet today,
·
many companies still don't have a coherent approach as to how they
can generate more sales and achieve better margins;
·
many sales people are still lying to their customers so that they
can meet their targets at the end of the month;
·
many customers are still waiting ethical and professional sales
people to help them find out their real needs, and provide solutions
that work
Psyche-Selling
TM
is set up so that companies and sales people can make healthy
profits and STILL provide genuine solutions to customers.
Psyche-Selling
TM
would like to create an environment where customers can trust sales
people to give them what they want, and NOT be pushed with all kinds
of products and services. In return, customers will become
loyal fans of these ethical and professional sales people, and repay
them many fold for the long-term.
Psyche-Selling
TM
will not rest, until the above is achieved. Not just in China.
Not just in Asia. But everywhere where buying and selling
takes place.
Psyche-Selling
TM
is a wholly-owned brand of
Directions Management Consulting Pte Ltd
that specialises in the field of improving sales performance by
enhancing the performance of the entire sales team. Apart from
the regular "selling skills training", Psyche-Selling
TM
conducts pre- and post-training analysis, interviews, monitoring and
reviews, working closely with managers and even senior management,
to deliver real improvements in sales leadership and performance.
Hence,
Psyche-Selling TM would like to be known as
the preferred choice of outstanding and remarkable clients, and
pride ourselves as such. We will also be continuing to assist
our clients achieve greater heights in 2009 and beyond.
Enquiries and suggestions,
pls. e-mail
info@psycheselling.com or visit
www.psycheselling.com
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