China's nearly $4 trillion economy has been built largely on exports to the rest of the world. Those who have tried to export American goods and services to China face heavy obstacles. James Chan, president of Asia Marketing and Management, has been helping companies overcome these hurdles for more than 25 years. With $2 trillion in foreign currency reserves, China can now afford the best, Chan says. Its market offers real opportunities for American companies who want to export and expand. Chan, who has helped more than 100 companies in the China market, says that companies who succeed know these seven secrets:
Your agent is your first "customer." Finding a China sales agent is an important first step, but it is only the beginning. You need to convince your agent that there is money to be made selling your products. Unless your agent is convinced that your products are a stepping stone to a better life and more opportunities, he or she will not be motivated to sell for you.
Your ideal agent must be an expert salesman, not just an expert. The most common pitfall among U.S. companies in selling to the Chinese is to hire a technical expert who knows their products. The ideal salesman in China should be an expert "operator." He or she may not have to a technical expert.
Let the Chinese do the selling. Your role is to recruit, train, and support your salespeople in China. A good Western manager knows when to go to China and when to let your Chinese sales people take the lead.
Don't compete on price. When people in China say that "Your price is too high," they are either trying to negotiate with you or they are the wrong targets. Price is only one of several factors in your success in China, as it is in the U.S. American companies are rarely the low cost vendors, you have to be clear and direct about how you are better.
Learn to guard your secrets and train your staff. Your customers in China may also be your competitors. It is not enough that you hire lawyers and use contracts to protect yourself. You must guard your own trade secrets and make sure that your employees are keenly aware of piracy.
Emotional intelligence is what works in China, not just intelligence. The Chinese feel proud when they can successfully "reverse engineer" your products so that they don't have to "depend" on you. Learn to make them feel good buying from you--as opposed to feeling "defeated" that they've "failed" to copy you.
Respect inspires loyalty, and, in the long run, sales. If you make your own agents and customers feel respected, they will give you critical market information and orders. But if they don't perceive that you respect them, they shut you off from the market.
Dr. James Chan is the first person to create and lead a three-day course titled "Business Skills for the China Market" for the American Management Association.
To improve your export sales strategy in China, call James Chan at (215) 735-7670.
26th Anniversary of AMM helping companies succeed in China
