The Mr. No of international business
Based on my experience in dealing with various Asia Pacific accounts for the past 15 years, I am often referred to by customers as “Mr. No” or sometimes even “the director of customer dissatisfaction.” How does one achieve such stature, and more importantly, why would anyone want that title? Let me assure you, I am a very nice guy to work with.
Based on my experience in dealing with various Asia Pacific accounts for the past 15 years, I am often referred to by customers as “Mr. No” or sometimes even “the director of customer dissatisfaction.” How does one achieve such stature, and more importantly, why would anyone want that title?
Let me assure you, I am a very nice guy to work with. But I earned this reputation representing East Coast based equipment companies in the U.S. regarded by Asian customers as the most difficult to work with, since they don't make concessions easily to Asians' tough demands. In contrast, Asian customers love to work with California vendors, especially those located in Silicon Valley. That's because California firms are often a lot more accommodating than their Eastern counterparts.
This difference may be attributed to New England's harsh winter which makes people hard to deal with and California's sunshine that fills hearts with warmth and welcoming hospitality.
In my experience, East Coast based companies are reacting to Asian customers who treat vendors poorly. Vendors call them “nibblers.” When these customers issue a purchase order, or are about to issue one, they often ask for extras not included in the initial contract. It could be free software, engineering specials, or an extended warranty. Unless particular requests are met, this customer threatens to cancel the order and give the business to a competitor.
In addition, many Asian companies are under strong pressure from their governments to develop their own technology instead of spending money on foreign products. One of the giant corporations in Korea, which will remain anonymous, is notorious for its outstanding reengineering expertise. Their hardware copying skill is so good that their reengineered product is often better than the original goods you delivered.
Annual job performance of a director level employee in this Korean corporation is judged by the number of foreign equipment products he has successfully “domesticated.” One way to discourage reengineering attempts is to deny orders of one unit or a quantity under 10 to 20 units.
Copying hardware items is not usually a difficult task, but reengineering software is a challenge for many Asian firms. If they run into difficulty copying your software, they will not hesitate to ask for your source code. You should not hesitate to say no, and engage your lawyer.
Another major challenge is your own sales rep. The reps' job is to defend your firm's interest, but he may spend more time representing customers. When the rep secures an order, you may find later that he has made concessions to a customer without your consent. When the commitment is already made to a customer on your behalf, it is almost impossible to reverse that if you want to keep the business. Find a sales rep who will defend your firm's position and has the courage to say no. However, know that locating such a sales rep in Asia is nearly impossible.
The expectations of after-market support are another nightmare for many U.S. companies. After a warranty period is over, you cannot charge your customers for non-warranty services. Like it or not, Asian customers are spoiled by Japanese companies who provide a rock bottom price with unlimited customer support at their own expense, and so they demand free 24/7 onsite support from U.S. companies. To stay competitive, you may want to build the support cost into the system price, keeping in mind price-competitiveness, as well.
Lastly, no matter what your corporate ethics dictate, gift giving and entertainment are widespread business practices in Asia. At one time, I worked for a U.S. corporation with clearly defined ethics regarding entertainment for its U.S. subsidiaries, but it recommended overseas offices follow local customs. Broad interpretations left room for practices that were not always on the up and up.
If you become involved in a situation where customers call you or your company an uncompromising Mr. No, you can either move to a warmer climate or wear a thick skin and be prepared to face your foe, who undoubtedly will test your patience and integrity. Being Mr. No to your Asian customers is difficult, but could also be the best thing you can do for your company.
Jae-Bok Young is director of Asia-Pacific business development for MagneMotion in Acton, Mass. He can be reached at firstname.lastname@example.org .