4 Pitfalls When Selling Software In Japan
You are a software industry executive working for a company that is doing reasonably well for itself in a few countries—the United States, Canada, Australia, maybe a few European countries. You dream of striking it big in Asia too, and Japan is at the top of your mind.
But then, you heard that entry into the Japanese market is arch-difficult—or even impossible. One mountain just too high to climb.
Difficult it may be. Impossible? I beg to disagree. My own experience demonstrates the opposite. Yes, even when there is an entrenched local competitor, you can still make inroads in Japan. But doing so takes a sound corporate strategy, some patience, and no shortage of resolve.
And you also need to avoid the following four traps.
Trap #1: In Japan, Local Presence Is THAT Important—But There Are Many Ways To Get It
Having a "storefront" of some kind in Japan is a mustPhoto by Clay Banks on Unsplash
In my first position after completing my MBA, I visited a Japanese prospect in automotive. That company is well-known internationally and is accustomed to conducting business worldwide.
We were competing against a Japanese company to earn the prospect's business. We had one trump card up our sleeves: our price was less than 50% of the competitor. When we disclosed pricing, the client's jaws dropped onto the floor. "That's it?!?"—this is what they said (but then in Japanese).
Internationally savvy client plus unbeatable price should be a winning combination in any country, right?
Well, we still lost that business!
Why? Because their very next question was about the quality of the local service. Our division had no local office. We had, however, a contract with another division that had a Japanese representation and could ensure service on our products.
Still, this was not considered good enough.
See, Japanese businesses, big and small, usually take great pride in the quality of their wares. They require that level of dedication from their suppliers. Therefore, paying more may be acceptable if it guarantees a high level of dedication.
Hence, a Japanese competitor often has a built-in edge. Clients know they know what they will expect.
Now, as a foreign software company, does it mean you need to invest lots of money upfront to open a sizable Japanese office before making any inroads in Japan? No. There are cheaper alternatives.
The first one is to have a local partner. There are a number of them present in the market. But just appointing a reseller and expecting them to do all the heavy lifting for you may not do the trick. See, Japanese clients understand that the distributor will not do all the support they will need. They may also be concerned that their input for future product development will be quietly ignored by your company.
So, you want to visit clients with the distributor regularly. I call this showing the flag and find it to be critical to ensure things get done. But this is only the beginning to be successful with resellers—just read my article on the topic.
Not finding what you are looking for among distributors? A skeleton crew with the right individuals can also work wonders. I did this in my previous position with just the right type of person—a Japanese man with a can-do attitude, a knack for hacking the product and delivering solutions, and the right amount of resilience to succeed. He proved to be a fantastic partner, and together we built a solid foundation for our Japan presence.
No matter your strategy, plan on delivering on your word. Show your Japanese clients that they can rely on you—that you get it.
Trap #2: "Documentation Isn't That Important"—When in Japan, Think Again!
Providing clarity about what your software does and how to use itPhoto by FLY:D on Unsplash
During my many trips across our wonderful world, I found the following to be constant: when presented with a new software tool, one's first inclination is generally to just try it.
Count me among the adept of that school of thought. I usually open the box or download the installer, then proceed to use the software. If I get lost, then I may try to look up the documentation.
That is so common that some well-known customer products don't even bother shipping a user manual any more.
Well, in Japan, things are different. Many engineers will first take the time to read the manual before they start using the software. Yes, some will read it in its entirety.
Oh, and one more thing. Many in Japan feel their mastery of English is insufficient to understand user manuals. As a result, even computer scientists will regularly claim for a manual written in Japanese.
And remember what I stated in the previous section about the value of service: they will expect the translation to be excellent. So forget automated translations or even professional translations from folks who do not possess a decent level of technical knowledge.
Now, for some, this may seem like an insurmountable challenge. It can indeed prove pricey. But there are strategies to lower the price of entry.
My teammate and I did back in the days to analyze the manuals we had on hand and prioritize them.
Translating the full 800-page user manual that explains all the bells and whistles? Very time-consuming indeed! Beginning with the "Getting Started" document? Much, much more doable.
Some good distributors will even do this for you. If you have local engineers on staff, they may similarly be able to do it. After all, when you start operations somewhere, you always need to wear a few hats.
Of course, clients will keep on asking for more documentation to be translated over time. But in my experience, the amount and schedule is usually negotiable, and over time it is possible to grow the diversity and quality of documentation as local sales grow. That is an effective way to manage the barriers to entry.
Trap #3: Not Addressing The Language Barrier In Japan
Japanese customers in the software industry aren't only asking for documentation, of course. They conduct their whole business in Japanese—sometimes, even with foreigners.
That may surprise some because English is very much the lingua franca of the software industry. You can usually get by speaking English only with clients in many countries around the world. But anyone that ever visited Japan will confirm that things can be quite different there.
Why is this? Essentially, learning a foreign language is always easier if your target is close to your native tongue. For instance, English and French share many words. They use a similar sentence structure, namely subject-verb-object. They also share the same alphabet, minus a few diacritics.
Japanese uses two sets of alphabet-like symbols (more accurately described as syllabaries) while still sprinkling a fair dose of kanjis—symbols that express ideas (and were initially imported from China). And while Japanese chose to import phonetically many words from English and other European languages, the pronunciation can be significantly different.
Oh, and the verb goes at the end of the sentence!
That one is tricky. I know. I am a student of the Japanese language. It takes a lot of practice—and a lot of "CPU cycles"—to flip the order of words before uttering a sentence!
That has significant impacts on both external and internal stakeholders. For example, say your company sells a unit test tool. You want prospects to find you, so you finance a keyword search targeting Japan. However, sponsoring "unit testing" may not yield much in terms of leads. If potential clients type ユニットテスト or 単体テスト in their search window, you are probably out of luck.
So, do you need a Japanese website? Probably.
However, it would help if you did not forget the impact of the language barrier you may have internally. For example, communicating with your local employees can sometimes be equally challenging. As a result, they may feel that you do not fully grasp their situation.
You may fail to pick up on a few cues they provide out of cultural differences. For instance, Japanese business speech tends to be very formal, very polite, and for those accustomed to a much more direct speech style, it may create confusion. For a funny example, watch my video above.
Just as showing the flag is an effective strategy to build your local presence (see the first part of this article), it can also be an excellent lubricant for your relationships with the remote Japan office (or distributor). In my experience, there are plenty of things that may only become apparent to executives after speaking face-to-face with remote employees.
Trap #4 Ignoring The Local Culture In Japan May Cost You (But Subverting It Slightly May Pay Off)Photo by Daniel Bernard on Unsplash
As I explained before, business relationships in Japan tend to be very formal. When you enter a boardroom to meet people for the first time, you are expected to go around the room in a specific order. You meet the senior person first (and yes, you sometimes need to guess who that is). You then present your business card with two hands, with the writing facing your counterpart. Then, pronounce a few words to introduce yourself (bonus points if done in Japanese), and bow down. Repeat for other attendees.
The Japanese language reflects this. It includes keigo (敬語), a complete system of special verb conjugations, special verbs, and other linguistic devices meant to pay proper respect and show deference to your "superiors." These would include your clients.
Ever wondered about the long diatribes waiters at restaurants pronounce when you enter the place? Yes, that is keigo too.
You ignore manners to your peril. If a prospect concludes that you are not paying sufficient respect, he may conclude you will not be a reliable business partner. Pure and simple.
Fortunately, there is a simple way for you to prepare: do your research. You may even learn some of the local tongue. After all, doing business is about building trust, which requires breaking the ice.
However, there is no need to be perfect. For one, usually Japanese do not expect perfection from you. You are a foreigner, after all. Besides, keigo is difficult even for the Japanese to master!
There are even times where the additional leeway you enjoy can play in your favor.
For example, a few years ago, I visited a prospect of ours. A competitor (also a foreign company) visited them before and claimed that only their tool could be used for a certain level of certification because they had a feature we lacked.
That was incorrect. We were used successfully at that level of certification by other clients. And that competitor probably knew it, as I saw this "fact" repeated by many clients in Asia.
However, when you tried to set the record straight, many clients viewed my answers with suspicion. "You say this because you don't have that feature."
Usually, I keep my cool at all times, especially in Japan. But on that occasion, I allowed myself, quite consciously, to express irritation. Irritation because it was not accurate. Irritation because, in my view, this was a lack of respect for the client.
The client interjected: "Maybe they just didn't know."
I told him they probably knew better. And I offered to put him in contact with clients of mine that would confirm what I said.
That is definitely not what you can expect from your typical Japanese businessman. And truth be told, expressing irritation is usually a risky strategy. But in my judgment, the circumstances warranted it. As a foreigner, I enjoyed a bit more leeway.
The result? We landed that deal.
So, by all means, learn and respect the local culture. The more you know, the better you will be. But realize that your status as a non-native doesn't only carry disadvantages. It can sometimes play in your favor.
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