Savoury Chef Foods – Vancouver BC Catering Company from Savoury Chef Foods. on Vimeo.

During one of our many discussions with Chinese expatriates while we were traveling together in China, this one about trade delegations was most disconcerting and surprising.

One fellow commented , “I do not let Chinese trade delegations into my plants in Canada.”  I asked why.  He had learned from colleagues that Chinese trade delegations to Canada were rarely about  finding new business ventures. Rather it was about getting subsidized to free travel and high living for the participants while traveling, plus they are charged to take pictures/evidence of everything to take back.

One other fellow agreed, ” I saw these guys take pictures of my plant, the equipment, our layout, the supplies area, the power substation outside, right up to the power lines leading to the plant.  After they left, they never responded to any of my emails or calls about any potential for business.  This happened to friends of mine as well.   Later I heard that CSIS is very concerned about how much espionage is being carried out by these trade delegations and that many Canadians, including city Mayors and Councils are unwitting contributors to this”

The first responded, ” I had a mid level employee  retire to China and he was approached to play a role with Chinese companies talking to their local /state governments and banks officials . He would dress up in a good suit and get taken to lunches with these officials . He was held up as a major Canadian investor interested in the projects and often his presence was enough to get the approvals needed for these big projects to go ahead.  The officials gained great face on being visited by dignitaries.

These Chinese companies and local officials will invite foreign trade commissions over to China as show ponies to impress the locals.  The trade commission folks never find out their true purpose is to gain prestige for others, not business.  If the Chinese govt really wanted foreigners to do business locally, they would remove the byzantine rules and barriers that are thrown up, ”

Hearing this I fear that many Canadian govt officials are being lead around by the nose with invitations to come to China. One could even call these boondoggles unless a lot of homework is done.  We are very trusting and innocent in this style of business.  Better that Canadian companies went to India if anywhere . IMHO.

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Shanghai to Suzhou – October 2012
Our first trip on China Eastern Airlines Airbus A300 was quite an experience. It was a tight squeeze but at least we were in a 2 seater row and not a 4 seater.  We didn’t expect so many toys in each seat – TV, audio, picture editor, USB plug, coat hanger/hook, etc. Food was fair and edible.   Adding to the experience would be that all instructions were in Mandarin so this would be almost an English free trip.

Shanghai – China’s Financial Capital
On arrival in Shanghai, the tour operator took about 2 hours to get us on the bus to the hotel  – what a nightmare. The Mingde Grand Hotel in Shanghai only looked grand cosmetically, on closer examination, there was too much wear and tear showing for a hotel that was only a year old.  The rooms were large, immaculately clean and quiet.  No complaints about the breakfast, but did find the dining rooms a bit dark for breakfast time.  Unfortunately, management was poor, front desk staff were a bit impersonal and the 2 operating (a third quit) small elevators for such a large hotel (which seems the norm in most venues in China) could not accommodate 2 bus load of tourists, wait times ran from 20 – 30 minutes – another nightmare! We ended up carrying our bags down stairs from the 16th floor in the end.The next day was spent at The Nanjing Road Mall, the famous commercial street in Shanghai. A delightful place to stroll, shop and admire some of the historical buildings and architecture.

Read full post. http://anordman.blogspot.ca/

Selling in China.  They sell value. Part 2 of 2.

I just returned from a 14 day trip to Southeastern China and Hong Kong . These  bus trips are part of the Chinese stimulus program where the govt subsidizes the travel of expatriates in order to get them to visit many government owned industries to buy Chinese products as well as stay in tourist hotels and eat in large tour oriented  restaurants.  This directly employs people in the tourist and manufacturing industries and is quite a  smart idea, as people do spend money.   I reviewed several instances of Chinese salespeople interacting with expatriate Chinese ( with apologies, my Mandarin is poor) .  Some of my sales beliefs were reinforced  as I observed how the Chinese sales person sells on value. It is all to easy for Westerners to think that the Asian sales technique is about the price.  Price has a place but it is not the first thing that is raised.

Successful sales people in China ( and this is for bigger ticket items, not the universal barker stall tactics) spend upfront time on building relationships with a subtle twist to the  Western approach. I saw the process had three parts:

1. Introduction of salesperson, the story  why this salesperson can be trusted and the building of common ground.
2. Why the product and company can be trusted, the value of the product
3. The special deal that is extended ( to head off negotiation)

Part 2. Why the product and company can be trusted.

Awards and certifications are very important here. It is not uncommon to see a salesroom wall festooned with plaques and framed documents speaking  to ISO certifications,  local and international industry awards as well as pictures of  famous dignitaries who visited the plant ( ex-President Nixon really got around!) .  In one clothing facility we saw pictures of supermodels and celebrities wearing the fabrics.  The requisite logos of partner companies are also displayed for all to see.

In the sales process, this documentation is mentioned , but the salesperson goes into detail on the science and research behind the products, the increased durability and ecological advantages.  Personal anecdotes are used extensively such as how one guides 88 yr old grandmother has very good health due to  drinking a specific tea all her life, and we are going to that tea plantation.  In the sales shop it was not out of line for individuals to then spend several hundred dollars on large boxes of tea to take home.   Expect to sit through a comprehensive corporate video showing the depth and breadth of the company resources.  History pays a large part in these presentations, with some firms proudly  tracing their roots hundreds of years.  Often, there are often very old, almost priceless art works proudly displayed in company foyers.  (Dragons are seen as very good for business as they draw money in.)

We sat through several founder stories where under great hardship, the firm survived many challenges with great strides being made in recent years.  Westerners who want to do business here, need to have respect for the old and the promise of the new.  Also expect to see charts , diagrams, scale models, or  operating micro process plants displayed.  This spoke to me of  a visual culture – one that wants to see how things work.

We saw tremendous brand awareness toward famous Western brands. If you have strong famous partners, the Chinese want to know this and would wonder why you do not display it proudly.

Part 3 . The special deal

We encountered several  posted no negotiation situations.  But, there was always a special offer.  Examples:

• Buy one get a second of lower value for free.
• The higher the spend, more special gifts were added to the bundle.
• Retail loyalty cards were everywhere – as you bought more your discount became higher through tiered loyalty cards. Basic economic value model in a standardized model.

We saw various negotiation approaches tried effectively to reduce price. E.g. :

• The special friend price (warm introduction)
• The Middle Eastern walkaway
• Low ball countered by multiply the bundle

Yet, the better the job done by the salesperson in building trust and common ground, the shorter the negotiation stage. A few times a buyer would ask ” give me your best price, if I like it you have a deal, if I don’t I will go somewhere else”. This worked sometimes.

I wondered what the final sales price would have been if the value building steps had not been effectively carried out.  Strong effective sales people know about preserving price points and margins through building value first remain true in selling in China. Westerners need to understand all the facets of what the Chinese client sees as value.  Knowledge of and respect  for the sales person as an individual, respect for the company and products and brand value need to be communicated.  These are all elements of successful sales persons everywhere, it is just having the sensitivity of knowing how much is needed at each step.

As a postscript we learned that China does not yet  have  a service culture. To serve is to be of lower value than those being served. In all dealings, one should not  place unexpected Western service demands on an individual as it involves a loss of face. Better to look at the whole deal laid out in the beginning with service levels specified. Extra care and detail here will benefit both parties.  And be prepared at a restaurant to not have your coffee or tea cup automatically filled, nor will the waitperson smile much!

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Selling in China.  They sell value. Part 1 of 2.

I just returned from a 14 day trip to Southeastern China and Hong Kong ( When you go, Oct  is best) .  I reviewed several instances of Chinese salespeople interacting with expatriate Chinese.  Some of my sales beliefs were reinforced  as I observed how the Chinese sales person sells on value.

It is all to easy for Westerners to think that the Asian sales technique is about the price.  Price has a place but it is not the first thing that is raised. In China I saw similarities to sales techniques I needed with Japanese firms.

Successful sales people in China ( and this is for bigger ticket items, not the universal barker stall tactics) spend upfront time on building relationships with a subtle twist to the  Western approach. I saw the process had three parts:

1. Introduction of salesperson, the story  why this salesperson can be trusted and the building of common ground.
2. Why the product and company can be trusted, the value of the product
3. The special deal that is extended ( to head off negotiation)

Part 1. Introduction, personal trust building and building common ground

This is where the Chinese way differs most from Western style. This preamble can take much more time then Westerners are used to.   I saw this manifest in several forms. The expected form is that the “salesperson” introduced themselves immediately on meeting the client – such as I am such and such from this province. You may call me Ben ( e.g) .  My family does this and this and I went to school here and here and did such and such with my time up to now.  When this step is delayed, the client feels agitated.

One trust building approach in particular was very effective. A young lady introduced  herself as having been selected for Chinese opera school. She had to interrupt her studies  when her parents became ill. She nursed them and in return, her father gifted her with two houses and lots of money (The Chinese have a very healthy attitude to money and business).  This story went over very well as filial loyalty ranks so high in this culture. (common beliefs)  Further, to be in opera school is a big deal (speaking to high personal capability and sacrifice)   and to give it up was a mark  of great respect to parents.  After dinner this person sang a song that was very well received.  (Singing songs is also a big deal in building friendship/respect. As a further note her training gave her tremendous powers of content retention and a voice that was very persuasive.

A second technique  was shown by a young man who said he was the fourth son of the owner of a business. He was the sales trainer .  He started asking the prospects where they had been in China and what they had seen so far. He suggested that the true China was found by visiting the rural districts and not the big cities. He went on to list some of the big problems facing China ( large scale corruption and the gross nepotism of the ruling elite wrto who gets the big money jobs and opportunities). His frankness opened up a serious discussion between himself and the prospects were  he was recognized as a straight shooter who could give a frank opinions on business in China. After about 25 minutes, this lead to very high value business discussions between the parties as the clients sought ways to do business with this individual.

If a craftsman is involved in the process, client buying resistance seems to be superseded by the demonstration of capability, hours dedication to perfection  and the humbleness of the craftsman. The chance to interact with a craftsman brings the client closer to the source of the product  increasing trust and adds a desire to reward vs negotiate for the product.

On the other side of the table, if the client ever demonstrates that they are not that interested in what the salesperson has to say – the salesperson loses face. This is sign of great disrespect and could easily befall the Western buyer who wants to “cut to the chase”.  (If you are not interested in what I have to say, then I feel less inclined to deal with you.)

The personal trust building step took more time than one would usually see in Western cultures and may give us a clue where Western firms that try to move too quickly to the business discussion get themselves off on the wrong foot. We know that if you skip all the “value building’ steps, then the only discussion is about price.

Also we know that the sale is first made by emotion and logic is used to justify it.  Westerners can not ignore how the Eastern business person views the emotional side of doing  business with them.

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I wrote last year about a great idea for a river cruise in Europe this year. http://www.regnordman.com/2011/05/20/very-good-value-for-a-fall-european-river-cruise-package-for-two-is-going-going/

Here is a comment from a friend who took this cruise

• The trip was great.
• We were impressed with the boat, the crew & staff, the tours and the tour guides.
  
• Rating  4 out of 5.

Europe is getting lots of attention  these days for travel , ( Strong loonie, Mexico uggh, growing desires for a bit more luxury in a trip – our backpacking days seem behind us) .    These trips are full usually 12 months in advance.   As  a result river cruise firms  do not often offer incentives.  One came by today to my wife (anordman@cruiseshipcenters.com) for next year  where Viking are offering some  shipboard credits  on a new boats cruise bookings to Russia, Ukraine and China Itineraries.( If you book by June 30, 2012.)

Here are the Russian itinerary:

http://www.vikingrivercruises.com/regions/russia_ukraine/index.aspx

Here are the Asian itinerary:

http://www.vikingrivercruises.com/regions/asia/index.aspx

The Russian boats sound quite intriguing

http://www.vikingrivercruises.com/russia-river-cruises/news/

The new ship for the Yangtze tour is pretty spiffy

http://www.vikingrivercruises.com/cruiseships/asia/viking-emerald/shipinfo.aspx

Enjoy!

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Image via Wikipedia

Room for All of Us. Adrienne Clarkson. 2011. ISBN 9780670065479.  The idea of this book is to chronicle representatives of immigrant groups who came to Canada to have a better life.  Its a good idea.  Too bad there was not enough room for the idea and Clarkson in the same book.  Very disappointing since I do not want to read any more about her, but I did want to learn about the immigrant groups.  Well at least she did not disappoint, based on past performances. What is it that she can not say my husband” but always has to use his name. Who cares?  Easy read, good pace, just needed some ego editing.   Borrow it from a friend if you must read it.

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Cover via Amazon

The Golden Spruce. A true story of myth, madness and greed. John Vaillant. 2005.  A Governor Generals award winning book about a man possessed who cut down a 400 yr. old  tree sacred to the Haida in the Queen Charlotte‘s.  The book combines a story about the BC forest industry, overlaid with Haida culture and meshed with the life of one man Grant Hadwin. It is a descriptive and mystical journey that gives a sensitive view of how all these elements collided and why this destruction happened. I felt close to this story, havinig spent some time on the Charlottes, seen the Golden Spruce, visited many of the places in the book and met several of the characters described.  A bit slow, the book is still a good read and it is well written.

Image by reg_nordman via Flickr

Why China Will Never Rule The World. Travels in the two Chinas. Troy Parfitt.  2011. ISBN 9780986803505. Troy contacted me to look at his book.  He warned me that it was controversial and Amazon would publish it in Sept.   I enjoy a good travelogue like this one. He is a Canadian history teacher who taught for 10 years in Taiwan and is now back in Canada.  He is just a regular person like us all with no “hidden interests or agendas”.  The book was prompted by a growing disconnect he saw between his experiences in China and the “roaring noise” he heard in the media that China was on a roll, that this was their era and they were on their way to a global hegemony.  So he took a total of three months to travel through China and the Taiwan to “live” in  the two Chinas, talk to regular folks, and see if there was this groundswell.  He took the routes of the residents, eschewed the tourist trails and essentially went native, with the record button turned on.   The time was just before the ’08 Olympics.  This was an eye opening trip for him. He used his history background to link the past to the present and  the future.  It is an easy read, well written and annotated with a style that allows you, the reader to build your own opinions from the views that Troy brings back.

I do not want to spoil the book for you, but I now agree with Troy’s thesis – China can not “rule the world”. The countries behavior is too tied into past history ( they can never forgive a slight – eg America backing the S Koreans, despite pouring billions into China during WW II, and now supporting Taiwan. The other slights are the Europeans and Americans having the opium wars.) China will not  forgive and forget and then move forward.  Revenge for these and other events will eventually come.  The behavior of Chiang Kai Chek and Mao was driven more often by revenge than anythng else.

From this book I take away that:

• China will never move to a democracy (Communism “fits” the Confucian culture. too well).
• When the leaders feel they have the US in a tight situation (Eg Move to sell their US bonds, or cripple their IT) they will move against Taiwan, even tho’ very few Taiwanese wish it.
• Hong Kong will slowly lose the freedoms they have now and will never get the vote ( When I was over there I heard over and over again that the plan was for Shanghai to eclipse Hong Kong as a financial centre).
• The “media” in China present the opposite of the truth until it becomes a “cultural truth”
• The educational system predicates against graduating students who can think for themselves, putting them well behind “western ” abilities
• The emerging wealthy  middle class will not give power to the 800 million poverty stricken peasants, preferring to transfer wealth to Western investments
• The West will continue to mess up in dealing with this country, since they will never understand the basis of Chinese decisions. The West will be played like a harmonica (Like they are being played in Pakistan)
• Religious freedom will never come to the country, persecution will continue
• Copyright protection will not take place in China, they are too good at copying everything.
• It will continue to be one of the most polluted countries ever and a growing global contributor.
• The concept of losing face is mostly a ploy to ensure that the country is not called out for its blatant acts.
• The leadership will continue to take advantage of the Chinese people. Corruption will always be there.
• We should watch to see what plays out in Africa with the heavy Chinese investment.

I liked it and suggest this is a good one for the “skeptical” reader. You can see how the the authors becomes quite emotional in his  responses through the description of his initial openness and the resulting experiences. I particularly enjoyed his use of  Orwell’s 1984 commentary.

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Image via Wikipedia

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