Knowing where customers are coming from is a senior management responsibility – and it is strategic to your business. Many China-based international managers are delegating too much client contact to front-line staffers who tend to be paid little, trained less and leave quickly.

Do you have a thorough demographic profile of your own target market?

Analyze & Profile
Analyze your end users. Knowing who they are and being able to build a reasonably accurate profile is basic. Profiling works best after you have analyzed your existing client base – at least for ongoing businesses. In other words – don’t decide you want the high end professional international market and ignore the fact that your main market is actually local middle-aged housewives. Look at your existing or recent client list and see what patterns emerge. Are all of your clients from a similar background or work in related industries? Once you know who your real market is, then you can be more proactive about going after different target demographics.

Clients & End Users
Don’t confuse clients with end-users. When I do consulting & sales training, my client is the HR manager or MD, and my end-users are usually either Chinese managers or European salesmen. The decision-maker is the one I have to convince – but I can’t ignore the End Users. End users tend to have stronger negative, or veto power but very little positive or selection power.

DIY or Designate
Do it yourself or designate a senior account manager who can represent you at a high level. The key here is language and culture. If you don’t speak good Mandarin or the local business language, your big client relations strategy is probably closing your eyes and hoping for the best. Designate someone of weight and substance to handle client relationships – even if they aren’t officially in sales & marketing. Debrief regularly and systematically.

Use the Tools
Tool-use is what separates us from the lower animals. The tools you care about are cookie-cutter processes backed up by software (i.e.: Automated Sales Processes, Customer Resource Management) and standardized, regular measurement tests (i.e.: psychometric assessment). The more tools that you use well, the better your results. The right IT can help when you have high turnover or inconsistent skill levels.

Sometimes the most basic concepts are the hardest to explain. Fortunately you usually don’t have to worry about explaining the obvious – unless you have decided to manage in China. Then you’ll need to figure out how to explain big-picture issues that seem obvious and “common sense”. One of the things you’ll have to explain is, “What is the point of this business?”

If you’re smart, you’ll tackle that question in the Orientation phase of the employee’s career – not in the exit interview.

Orientation program
Orientation programs are where your new hires learn about your company values, corporate culture and how to fill in the government insurance forms. In some companies, a five-minute confab between the new hire and an HR manager about payroll and benefits is the ENTIRE orientation program – and that causes problems.

An orientation program should help the new hire come to a deeper understanding about his role in the company and his company’s role in the universe.

There are two directions from which you can attack this issue. Top-down or Bottom –up. Whether you are wrestling with an existentialist dilemma or trying to improve employee retention, this will help.

Top Down Orientation.
This approach helps the new hire get a truly “big picture” understanding of your business’ scope and expansion plans. If your guy is managing or working with people in different offices or a geographically dispersed market, you’ll definitely want to examine this type of explanation. You shouldn’t have to spend to much time explaining about the top few entries, but once you get to such “obvious” basics as Market, Industry and Specialty – be prepared to do some serious coaching. Your new guy may have only the vaguest notion about what your firm really does or how it integrates with the larger economy.

World
Economy
Nation
Market
Industry
Specialty
Company
Department
Employee

Bottom Up Orientation
Bottom-up analysis starts at the very basic level. If you are selling stuff, then Bottom Up conversations will start with the end user, then work up to the buyer, then the retailer, the distributor, and so on right back up the new trainee and his department. If your activities are more on the manufacturing or service side of the equation, you might start your BU orientation at the raw material or “Greenfield” level.

User
Customer
Employee
Department
Company

Which one should you base your program on? The best companies integrate both approaches to give their new hires a true global view of their new jobs. But companies that don’t take either approach might find that the first time they discuss company vision with employees is after they have already quit their job.

Just saying Sales HR is strategic to your China business is not enough. You have to step up and act it. That means getting engaged with a wide range of people and problems at every level of your sales department. I love watching managers and owners pass responsibility down the line – but there is an unfortunate tendency to treat delegation like a “job finished” check mark on a to-do list. Delegating is good for your operation – but it isn’t a time saver for YOU until much later. First you have to make sure that you delegatee is solving problems and not just finding effective ways to hide them.

How should you make sure you sales managers are doing the right job in the right way? Here are 5 key areas to check on:

1) Are you recruiting well?
Have a manpower plan that means something. Update it and make sure it integrates with the rest of your business model. If you want to double the size of your sales staff in 2008, are you going to hire ore supervisors? Assistants?
Where will you put them all? Who will train them?

Consider the pros and cons of hiring experienced workers. Are you figuring on a training plan for the experienced managers? How will you get your new grads up to speed in a hurry?

Many sales organizations churn through new hires. Make sure yours is getting the results you need. You need to build a system that will train new managers in addition to competent line workers.

2) Are you training well?
To train well, you need an integrated plan with clear-cut goals, milestones and deliverables. Don’t delegate this one down the HR rabbit-hole and hope for the best. Training and staff development is strategic – it requires multi-year planning and close monitoring. Many HR teams are hiring friends and acquaintances in a series of one-off beauty contests. Senior management needs to get involved in training and development.

3) Promote better
Commit to a structure and a chain-of-command, and then staff up accordingly. I’m sick of looking at fictional org charts and then hearing stories about how Sunshine is sort of in charge of customer service because she was doing that when the company was bought in 2004. Decide on each job’s target profile and then train from within or recruit from the outside to build the machine you want

Once you’ve promoted, make sure that your new managers are managing – not just selling at a higher level. If your sales managers aren’t training, supervising and building the business, you have to bring in other manages to do it. Don’t live the lie that your new recruits are “learning on the job”. They are learning to find new jobs.
Teach leadership. American managers feel that this is wrong – and maybe in NY and Chicago it is. In China you have to send them to courses or bring someone in. There are lots of good trainers doing this kind of work in the big business centers.

4) Orient the new employees.
Have an orientation program. Test it, update it, go through it yourself. One of the most overlooked and undervalued of all management activities is orientation training. It is your first – and may be your only – chance to set the tone of your company’s culture, expectations and values. This stuff matters.

5) Measure what you can
As your company grows, your ability to measure objectively and analyze the data is going to determine your success or failure. Use off-the-shelf software and technology to build a reliable battery of standardized tests and feedback systems. Develop a profile of your ideal candidate for hiring, test and appraise during the selection process, and test to make sure your new assets are operating effectively. Most important of all, have all data immediately flow back to senior managers at HQ. Developing a good system of checks and measurements – and knowing what to do with the data you collect – is going to be another crucial factor to your long-term success.

Sales management in China has two aspects: operational and leadership. Good sales-managers are usually the best sellers that the company can lay its hands on. But they also usually have to lead a team that is probably quite management-intensive and is prone to personality and relationship issues.

Maybe it’s a “harmony” thing, but many Chinese sales teams are being run by people who consider themselves just one of the people. They like the title and the pay, but they tend to avoid jobs that make them hated by their co-workers and colleagues.

Tacit authority to do a job they don’t know how to do – and find extremely unpleasant – makes for neglect.

If you are promoting salesmen to management positions – or already have – pay attention to these areas:

1) Be Explicit. Don’t assume you are on the same page.
Have you spelled out your sales manager’s ideal job description in terms of leadership? In China we have to be more careful of “implied” or “assumed”. Many newly-appointed sales managers are reluctant to take a strong leadership role when they still consider “friendship” to be the prevailing form of relationship. You have to play a larger role here – but subtly.

2) Train. Give your guys the skills to lead.
Throwing a new manager into a leadership role without some form of preparation is asking for trouble. Your guy will need train the trainer, leadership, presentation and negotiation skills training. I know – you gave him a book and a CD with a seminar on it. Now you have to know – he didn’t read it. Arrange for a real trainer.

3) Compensate.
Your guys may not be too timid to lead – you might be too cheap to pay them for it. Sales managers are often brighter than they seem to be. They figure things out. You arranged a compensation plan that is supposed to encourage your sales manager to lead. He may have figured out that selling as a high-powered lone wolf is more profitable. Check your compensation plan.

Most young managers learn to lead from examples around them – and that may mean you. Before you come down too hard on newly promoted managers for weak leadership or interpersonal skills, take a quick look at your own.

British Reuters has a sad story today that all international managers in China can learn from:

China recall toy factory boss hangs himself: report
“Zhang Shuhong, a Hong Kong businessman in his 50s and boss of the Lida Toy Company in the southern province of Guangdong, was found dead in his factory workshop on Saturday, the semi-official Southern Metropolitan Daily said. About 1.5 million preschool toys made by Lida Toy, a Foshan-based contract manufacturer for Mattel Inc.’s Fisher-Price unit, were recalled across the globe by the U.S. company last week.

A close friend of Zhang who was also one of the major paint suppliers for the company sold the problematic paint to Lida, the newspaper said… “(He) was so evil-hearted to have sold the fake paint to our boss … our boss was ruined by his best friend,” a manager of the company, surname Liu, was quoted as saying. “

With friends like that…

People always ask what international managers can do to safeguard their brands against supply-chain crisis in China. I think it’s getting harder – not easier.

Zhang’s friend is one of the many reasons why. Did he think he was ripping off his old friend and partner by substituting in poisonous lead paint for kids’ toys? Maybe – but it’s more likely he was under the influence of “Rich Foreign Company Syndrome”. That’s the condition that leads suppliers to beleive that well-known international brands have unlimited cash, no oversight, and no consequences.

That’s why you need to be very careful about your own supply chain. Just because someone is friendly doesn’t make them trustworthy. That’s true anywhere and any time – but right here, right now it’s a very important management rule.

It sounds so tempting. You are a western service provider, designer or importer. You need to make sales – and you’ve already tapped out your own AmCham, alumni association and sports team. Selling in China is much harder—and time consuming – than you had originally projected. Maybe working with a local Chinese sales organization or distributor is the way to go?

Sounds like a great plan – but it is not without its risks and pitfalls. One risk is that they won’t be able to help. Another is that they will actually harm your efforts through misunderstanding or incompetence. And the, of course, there is the risk of IP theft and training your competition.

How can you protect yourself before taking a leap into the world of Sales Representation?

Let’s assume your new sales partners are NOT trying to rip you off:

One of the bigger dangers you’ll face is that they have one or two contacts that they’ve been milking forever. An even worse scenario is that your guys has never worked with a product or service at your level, and the big connection they used to get you to agree to a deal was actually more of a learning-experience for them than an actual attempt at sales. In other words, they have no more resources than you did, but a lot less experience or product knowledge.

Avoid being a stepping stone for your outsourcers and distributors. Make sure they have the ability to sell to people that they didn’t attend university with! How do you perform due diligence on a distributor?

5 steps to checking out a sales outsourcer or distributor.

Check references. Current and in your industry. It’s a good idea to talk to both clients (sellers) and buyers that they’ve worked with. Always look for people in your situation and in your industry. Don’t be anyone’s first international deal. Make sure your guys have the ability to sell AND the willingness to pay what’s owed.

Behavioral interview. Who will do what, and how? Is the big boss the only seller? What if he is busy with on of his 1000 other deals? How will they sell to strangers? How will they attract leads? Hint: Working his network of connections is a pretty bad answer.

Ask for projections. They won’t be able to supply them – but you’ll get a vague range from his questions and conversations. If he talks about 1 or two sales a quarter, or if he talks about 50 or 100. It also gives you a chance to gain insight into his logic and approach to business.

Multiple partners. Forget exclusivity until you have a good business reason. Make your first deal relatively small – once you have hammered out your deal points and negotiating goals, it will be much easier to find new distributors. Keep the number of active partners under control ( 2 or 4 solid distributors is worth more than 50 deadbeats), but always have fresh blood waiting for opportunities.

Non-cash benefits. He can show you how to sell, translate sales material, deal with local regulators, help localize the product and even find you staff. Make a list of things you want, and negotiate about that early.

B2B sales in China is going from complicated to mystifying. The problem used to be figuring out the identity of the true decision-maker. Now it’s about figuring out which team decision-makers is winning the corporate power struggle within your prospect’s company.

In general terms, there are three groups of players that you have to understand:

Overseas office / global HQ.
Local top-level decision makers (MDs, owner, department heads)
Local bureaucracy (HR/Purchasing)

The problem is that these groups tend to compete with one another and base their purchasing decisions on widely varying criteria that don’t necessarily have anything to with the actual needs of their organization. On the bright side, internal communications is often so poor that you can tell different people completely different things and no one will ever find out. Maybe.

Who are these people or groups?

Global HQ or centralized decision makers.

These people are not in China. They tend to not know – or even care – about market realities over here. For many China-based SMEs or departments, it is very hard to make this sale since they have global operations and only seem to deal with international giants. The good news? While it’s hard to make the sale, it is much easier to get the deal. Stop selling direct and look to partner with companies that are strong near the HQs– but weak or building in your own backyard. There are plenty of smaller “global” companies that are just starting to get their China ops off the ground – or trying to rebuild after initial difficulties. Don’t be intimidated by international giant consulting cos. China standards are rising quickly, and many respected names are quietly reaching out to high-quality subcontractors on the ground in China’s business centers. Hint – fast growing second cities are good bets.

Local Top-Level Decision Makers.

The good news – this is your house. These are people just like you – ex-pats, returnees, and overseas Chinese who speak your language. They ‘get’ the local business environment, know that international SMEs and entrepreneurs deliver the right quality at the right price, and honestly believe that you are the answer to some of their biggest problems. They understand your situation – and your value. The bad news – there are relatively few of them and they are constantly under fire from Global HQ and local-locals who want their power (and their jobs). Key here: Sell the end result (solutions to their worst problems) – and the control.

Local Bureaucrats – HR & Purchasing departments.

Dynastic eunuchs with better haircuts. Very tough – and they are on the rise. Bad news – there are more of them then ever, they fit in with Global HQ’s cost-cutting strategy – and they tend to be fussy and resentful of westerners, overseas Chinese, returnees, other local Chinese, and just about everyone else. They are still getting informally compensated by their friends who try to compete with you. But the worst part is that stamping the contract is the only real power they get to exercise. Good news – there isn’t any. HA! Kidding. I kid you. They are getting more and more sensitive to quality and scheduling. In many cases their own network has let them down in the past, and they are very wary of looking foolish again. They often fill the role of “influencer” or “implementer” – and not the “decider” or “initiator” that they say they are. With these folks, you want to sell to their ego first. Play to their sense of middle-class respectability and their position within the international community. These are the people you network with at the AmCham function.

General selling advice:

Determine how the buying decision gets made and work on the ones you have a shot at. Understand who really makes the decision. Don’t waste time on organiations you don’t have a realistic shot with.

Don’t sell to two groups at once. Sell twice within the same organization.

I am Self Sufficient, Tenacious and Wary. The last one bugs me a little, because other top salespeople are more Decisive than Wary. But I also run my own business, so that may be a good thing. It’s all relative and open to interpretation.

I’m looking at the results of a new kind of psychometric test designed specifically for sales teams – and it is a real eye-opener. I’ve seen generic personality and psychometric assessments before, but they tended to be so vague and ‘touchy-feely’ that they were more like entertaining curiosities than business tools. (I know – some people swear by them and before I start getting hate mail from the Cult of Myers-Briggs, I humbly acknowledge that they are not without merit.)

But this is the first time I’ve seen one that was specifically geared to sales teams in China – and I really thought I’d have scored better!

Most salespeople are Self Aware, Bold, Decisive, Calm and Conscientious. My Self Awareness and Boldness are OK, Conscientious is good – but my Calmness and Decisiveness are trouble. I’ve got to work on them – or more accurately, I’ve got to work with them.

The whole point of the assessment is to help sales managers do 3 things:

1) Build a profile of your “ideal” salesperson.
2) Select candidates for your sales team more accurately. (Notice I didn’t say – select BETTER candidates. It’s a distinction I’ll get to in a minute.)
3) Make your existing team more effective.

Because the test I was looking at was specifically geared for salespeople, the questions and scoring centers on selling & marketing situations. None of those weird “which do you find more interesting, a stop sign or a squirrel?” kinds of question. This test asked things like, “If a client gets angry, do you get emotional or try to calm them down?”, so the data it provides tends to be useful for the average sales manager – or for the HR manager who has to recruit the sales team.

Profiling your “ideal” salesperson works if you have people on your team that are performing more or less the way you want them to. The test identified 18 personality characteristics and ranks the testee based on 2 poles – such as Self-aware vs. Self-unaware, or Bold vs. Cautious. So far, nothing too out of the ordinary for psych testing – but it’s still a very useful way of getting an objective assessment of what is going on inside the brain-pan of your top sellers.

The benefit here is that it allowed me to build a profile of my top sellers and compare them with a universe of other sales people – so I was able to work with a small sample and develop a useful picture. Now I can test new prospective hires and see if they have the right stuff. This particular test offers prompts and insights that sales managers may find useful (for instance, my sample test told me that I “may be more concerned with getting the job done than with “soft” people issues”. To be honest I would not necessarily be my own first choice when hiring a new sales associate!) The system I was looking at even offered interviewers recommended lines of questioning for determining if an assertive candidate was “go for the sale” assertive or “crazy stalker” assertive. Most of the interview question prompts were actually quite insightful & useful – and would be very helpful for Chinese HR managers more accustomed to finding team-players than hard-driving aggressive salespeople.

But what about the people that are already working for you? This is usually where most assessment tests fall down, because they can’t offer useful advice – just vague descriptions. The test I looked at is helpful because it can be used by training & development managers to customize a training plan to work with a sales team’s existing characteristics. That means that if you sales team is more Wary than Decisive you can build a training program that helps with decision making, leadership and soft skills – instead of firing the whole lot of them and starting over from scratch looking for ideal candidates that aren’t readily available. And in China, than can be a very useful thing.

I develop training and e-learning strategies for China-based sales teams and one of the first questions to come up is: What are the differences between Chinese and American salesmen?

My answer surprises people. Chinese and American salesmen fail in different ways, but the successful ones both operate almost identically.

Young Chinese go for the Relationship first
Chinese newcomers to the sales world believe in building relationships – with anyone, at any cost. It doesn’t matter if their target has the ability to buy, any use for the product of service, or even has money. Young Chinese sellers will spend hours developing relationships with anyone who will give them even the smallest opening. Often they seem to think that one relationship will lead to another until eventually they are introduced to the perfect prospect.

Young Western salesmen go for the Transaction first.
Raised on movies like “Boiler Room” and “Wall Street” (and maybe “Mission Impossible” as well”, young American salesmen like to see themselves as tough, hard-hitting businessmen who can shake hands and pound tables to force open the doors to their first big deal. They want to sign that first deal and then build the relationship around that success.

Experienced Salesmen know it’s about BOTH the relationship and the transaction.
The problem with the first approach is that you end up with lots of acquaintances who are vaguely aware of your product offering but don’t really consider you a business contact. The second, more direct approach has merit in specific business circumstances – but you have to guess correctly about the client’s needs and priorities. He’s not opening up and telling you about his business.

Older, more successful salesmen from both China and the US understand that you need a combination. Chinese salesmen will begin with a cordial relationship – but learn how to turn the conversation towards business and transactions once the initial social niceties are out of the way. They present themselves as a good friend who can help solve work problems. The western salesman, with a history of several deals and a solid track-record, builds a strong, friendly relationship around those transactions. Once a salesman has completed a few deals with a buyer, there’s a good chance that future negotiations will take place on the golf course or over dinner & drinks.

Both Chinese and Western salesmen eventually end up in the same place – a friendly business relationship that results in mutually value-adding transactions. The biggest difference between China and the West is how young salesmen approach the process. Young Chinese start with the relationship and try to build towards transactions. Young westerners start with a transaction and use it to cement a relationship.

Customer Alienation Management systems are apparently all the rage in Shanghai – and they are amazingly effective. I have been finding new restaurants and shops all over town as a result – and just this week I have had the opportunity to explore a wide range of new gyms.

I had let my health-club membership lapse for a few weeks. Ok, 5 months. But this past weekend I felt ambitious and went back to my old gym to sign up for a new membership. I didn’t really like that place, but it was relatively close to my home and convenient to the subway and shopping. I won’t mention the name but it sort of rhymes with ‘Business-Kill’. I asked for the rate of a three month membership, was told the price. It wasn’t too bad so I agreed and started to do the paperwork. As they were entering me into the computer, the customer service person said,

“Oh—you were a member before? In that case, the price is 30% higher”

Two things happened as a result of this bizarre approach to customer service.

First, I didn’t sign the contract, got my money back and walked away. I then told 5 or 6 people, and even published about it with a thinly disguised reference (see the Business-Kill line). I will continue to use this as a case study in how NOT to conduct successful customer service.

Second, I signed up for a different gym that is a little more competitive. They were more than thrilled to get my business and the price got LOWER as we negotiated – not higher.

Customer service training in China has to go beyond etiquette and smiles. Managers have to make sure that the policies they put in place aren’t undermining their own efforts and driving business away.