8 things Nordic companies must know about cross-cultural sales
Are you thinking of expanding your corporate footprint in a new country? Are you a scale-up that just figured out their business model and received a whopping 2M Euros to expand sales in the international market? Or are you a startup aspiring to impact the world one step at a time? If you relate to any of these situations, the probability of you facing cross-cultural sales is inevitable. Suddenly a plethora of questions dawn on you:
Will you hire new staff in the new market where you want to sell?
How will you manage them?
Will you use a sales-channel partner in the local market?
How will you select and manage them?
Will you send your employees or experts onsite?
How will you prepare them to sell in the local market?
The success of your international venture depends hugely on the above answers and the decisions you make for your company. Make one wrong decision and risk the confidence of your investors or as an established corporate ruin your reputation in the new market. Whoo, no pressure!
Some big companies in the past have underestimated the importance of cross-cultural competence and have witnessed significant fails. You can check out some examples here:
- Starbucks in Israel: Starbucks started its operation in Israel in 2001 but soon after, in 2003, it decided to abandon its operations in the country. Their expansion in Israel failed because they did not understand the existing coffee culture in the country. Israel has a strong coffee culture and even the international coffee offerings include the intense Turkish flavours in their coffee. Starbucks failed to understand and adapt according to the local market, that consecutively led to a failed market expansion in the country.
- Walmart in Germany: Walmart has a vast chain of stores across the world but it failed to expand successfully in Germany because of poor adaptation of local culture. Many factors and organizational culture Walmart was using in America did not fare well with germans. Structuring the store with difficult navigation methods so that customers spend more time in the stores is not a very german style. Neither is the fake-smiling at strangers very german, unlike the smile at every customer policy in America. Many such small cultural details lead Walmart to fail in the German market.
- eBay in China: eBay is one of the biggest online platforms for selling and buying goods online. Although it failed to expand into one of the biggest markets in the world, China. Not understanding the cultural aspect of business in China, eBay lost the competitive advantage to its competitor Alibaba. Alibaba realized that buying and selling in China depends on personal bonds and relationships called guanxi. Alibaba launched a consumer auction site called Taobao and introduced the feature of guanxi using a chat platform between buyers and sellers. eBay not understanding the cultural intricacies in the market lost its chance to expand into the world’s largest consumer market.
We see that even the big companies fail when it comes to cross-cultural selling. So does this mean there is no hope? Are you doomed to fail in any international market?
The answer is, ‘NO’.
In the world of globalization, companies have been working in international markets all the time. Some of them are super successful and some are not. The difference is how you proceed with your international business and sales strategy in foreign markets. Cultural competence is mainly a competitive advantage that every company expanding into foreign boundaries must aim for.
Most of the companies expanding abroad often adopt different strategies like hiring a consultant, partnering with local sales partner, hiring a local team or sending experienced employees onsite to handle the operations. In all of these strategies, the companies need to educate themselves with the cultural aspects of the countries they are expanding. There are certain key aspects of cross-cultural selling that you can keep in mind if you are planning to expand your services into the unknown territories. Some of them are listed below:
#1 Selecting the target market
The first step for a successful business venture is to select the target market carefully. Understand what are the products or services your company offers and which market has the demand for the same. Knowing the competitors in the market, the existing offerings and the openness of the market to accept your products or services are essential to decide your target market.
#2 Cultural self-awareness
Understanding your own cultural preferences and bias helps you to make conscious decisions in an international market.
#3 Watch your language
Language barrier is the first challenge you will have to face when you enter into a new market. Handling this first challenge by hiring translators, local partners and creating an organizational culture of using a common workplace language are some of the tips that could help bridge the gap.
#4 Strong communication culture
Misunderstandings are common in cross-cultural selling. But sometimes, it could make or break your position in the market. To avoid this, make sure to have a strong communication culture within the organization, with your employees, stakeholders, customers and partners. Also, learning about the body language, verbal and non-verbal cues of a specific region is a part of creating a strong communication culture.
#5 Decode the culture
The most crucial aspect of making long-lasting relationships is understanding the cultural aspects of a place. There are certain aspects of a culture that are very visible and can be worked upon immediately but the deep culture is something that would give you a competitive advantage over others. The deep culture includes the behaviour people exhibits in different situations, the decision-making process, the values impacting business decisions, managing conflicts etc. To create customer bonds that last, you need to understand their needs in a way that fulfil their deeper values.
#6 Build trust
Trust is a primal human need. The first things the human brain would look for in a person is how trustworthy and credible he/she is. The same goes with businesses; building trust and credibility early on is essential.
#7 Respect
Cultural differences sometimes come as a shock. Therefore, while dealing business on an international boundary, it is essential to maintain respect for the local culture.
#8 Have patience
Coming across a new culture gets you out of your comfort zone. You need to learn and adapt to different situations. Being patient in such a scenario might help you see various opportunities and ways to succeed in the local market.
About the authors:
Troy Woodson is an executive sales coach and Director of Customer Acquisitions at Feedbackly. He has helped many companies to develop their sales strategies and sell their products & services in highly competitive markets like the United States. He has over 20 years of experience in sales and has been mentoring sales representatives, corporates, scale-ups and startups in developing robust sales techniques.
Priyanka Banerjee is a communication expert and a diversity coach. She helps companies and individuals to understand the multicultural aspects of international business. Her expertise is in helping her clients to manage international teams, customers and clients. She aims at building cross-cultural competence to increase productivity and innovation in organizations. She has over 8 years of experience working with international clients and is currently the CEO of BusinessWiz.