The Global Marketplace and Contemporary Selling

Consider how business has changed since 2006. Classic American companies like IBM now generate more than half their revenue outside the United States, the largest car company in the world is now Japanese (Toyota), China has become a world economic power, much of Europe now operates with a single currency (the Euro), and everyone from consumers to businesses are doing business on the Internet. With all these changes and many, many more, it is not surprising then that the nature of contemporary selling has adapted as well. From globalization to technology, economic forces to political/legal changes contemporary selling has been impacted by the global marketplace.¹ Exhibit 14.1 highlights several well-known U.S.-based companies and the percentage of their revenue generated outside of America.

In his classic book on the influence of globalization on society and business, The World is Flat, Thomas L. Friedman offered two important rules for business in the 21st Century. One of his rules addressed small firms, “And the small shall act big… One way small companies flourish in the flat world is by learning to act really big. And the key to being small and acting big is being quick to take advantage of all the new tools for collaboration to reach farther, faster wider and deeper” (p. 345). He goes on to elaborate how important it is for small companies to learn the customer’s business and move faster than the competition, essentially reinforcing the principles of contemporary selling.

A second rule that Friedman suggests for big companies is, “And the big shall act small… One way that big companies learn to flourish in the flat world is by learning how to act really small and enabling their customers to act really big” (p. 350).² Again, Friedman argues against the tendency of big companies to lose focus on their customers; in essence they become more important than their customers. In a global sales environment there are always competitors willing to respond to the customer, and “big” doesn’t always win.

Globalization is the “development of an increasingly integrated global economy marked by free trade, free flow of capital and the tapping of cheaper foreign labor markets.”³ The definition speaks to the integrated nature of markets around the world and need for companies (and salespeople) to move around the world to meet the needs of those markets. Increasingly companies consider the world not as individual markets but as the sum of its parts, designing a product in one country, engineering it in another, manufacturing it in a third, and distributing it throughout the world. Airbus, the world’s largest commercial jet aircraft manufacturer, designs their aircraft in Europe but outsources the component manufacturing to over 3,000 suppliers all over the world, then assembles all those parts at a single location in France. Finally, the company must deliver its products to customers all over the world. It may be easier to think about global decisions if you build jet aircraft, but consider Swedish apparel retailer H&M (Hennes and Mauritz) which has seen dramatic growth in the last 10 years, with over 1,600 stores in 30 countries. One of the keys to the company’s success has been its global business model. With in-house designers (located in Stockholm, Sweden) the company designs its own clothes and then uses 700 independent suppliers in Europe and Asia to coordinate a complex manufacturing and distribution process. The end result is high fashion at reasonable prices for younger men and women.

For many there is an understanding that selling to large global customers like Airbus or H&M requires global knowledge of the contemporary selling process. However, regional or even local companies must also know how to manage the effects of globalization. For example, construction companies throughout the world have learned the hard way about China’s sustained economic growth because of the shortages in key construction components such as concrete. Consider one local construction company in central Florida. In recent years they have had to work with new materials and manage customer expectations due to the shortage of critical components, in essence learning to work in a global marketing environment despite being a local (central Florida) company. In one case, the company was forced to work with a customer to develop cost-effective alternatives when shortages in concrete pushed out the project timeline. Gaining that level of understanding has been important to the company but also its customers.

Culture

Culture has a considerable influence on everyone’s perception of the world. Every culture creates its own set of norms, accepted behaviors, and beliefs that manifest themselves as cultural differences. Culture is a system of values, beliefs, and morals shared by a particular group of people that permeates over time.⁴ Consider the use of entertainment as a business tool. Many American companies severely restrict this aspect of the buyer–seller relationship, yet in Asian cultures, salespeople are expected to spend time with customers in social situations before the purchase. These culture clashes can create personal ethical dilemmas for salespeople and by extension for management. Another area where there are significant cultural differences is gift giving: in Asia and Latin America, gifts are an integral part of the relationship-building experience. However, many Western-based companies do not allow the giving of gifts, particularly expensive gifts, to customers.

The “one-size-fits-all” approach does not work when you are selling to customers in the United States, Germany, and China. Companies have adjusted their selling policies to different countries.⁵ But these policies can become so inconsistent they affect customer relationships. For example, many Middle Eastern cultures do not let women take a leadership role in business. As a result, many Middle Eastern customers will not readily accept even the most talented saleswoman. The company must decide whether to send the best person, potentially a woman, or one who fits the cultural norms of the customer. Companies like General Electric encourage their salespeople to be receptive to local business customs in dealing with customers and try to match salespeople with customers’ cultural sensitivities. Let’s examine three key cultural elements (language, cultural values, and salesperson-customer relationship) and see how they impact the contemporary sales process.

Language is one of the essential building blocks and the primary communication tool in a society. At the most basic level it is important to understand the language, making sure that words are being properly understood. At the same time, language does much more; it is important in conveying the society’s values. Salespeople need to understand the language of their customers to express themselves clearly and be understood correctly. In addition, most industries have a “language” of their own where terms are defined and widely recognized among customers and companies. The words used by the salesperson speak not only to the specific meaning of the word but also to the cultural values of the word. In native English-speaking countries (England, Australia, United States) the word “contract’ has a specific meaning defined by cultural custom and legal precedent. However, in some Asian countries, such as Japan, the cultural meaning of “contract” is different and implies a relationship between two parties that extends beyond the formal boundaries of the legal definition.

In a salesperson’s home country, language is less of an issue, as the cultural context of the conversation is the same for both the customer and salesperson. If a word is misunderstood the customer or salesperson will quickly understand the problem and define a mutually understood context for the meaning of the word. However, when salesperson and customer do not share a common culture and language, those subtle meanings can get lost. In Asia it is common for customers to show approval for a sales presentation even if they have questions or concerns. Their culture is one of respect and there is a conscious effort to minimize conflict. While the salesperson believes the customer’s lack of objections signals approval, the customer may actually be thinking that this product does not meet their needs at all. It is important for the salesperson to know the language and the cultural context for the conversation.

Cultural values are a society’s ideals expressed as beliefs and they can play an important role in shaping the salesperson–customer relationship. In many Latin countries (Argentina, Colombia, and others), the family plays a significant role in an individual’s life and there is a cultural value of maintaining a balance between work and family. The focus on the family helps shape people’s choices about work schedules and stands in contrast to the American value of hard work and commitment to “get the job done.” Are American salespeople and customers concerned about spending time with their families? Of course they are, but American culture values hard work and sacrifice, while Latin culture values family. It is important to understand these cultural values differences when working with customers—for example, their schedules may be less open to meetings on Monday or Friday.

These differences can also be reflected in other values. For example, American culture places a high value on individualism, while many Asian cultures value more group consensus. Even countries next door to one another can have different cultural systems. The German and French cultures, while very close geographically, have evolved very differently. Global Connection highlights the differences in negotiating between Chinese and American cultures.

Notice the major differences in the critical selling step in the contemporary selling process. Salespeople must understand these differences in order to avoid breaching local business custom.

One of the most challenging cultural values for salespeople to understand is time. Western European and American cultures, for example, place a high value on using time efficiently. They tend to carve the day into minutes and hours, trying to be as efficient and effective as possible in any given period of time. Outlook (Microsoft’s calendar and email software application) and other calendar applications break a day into smaller increments of time, even as small as 15 minutes, and it is possible to set up the applications to notify or even block someone from “double-booking” a calendar event. This focus on maximizing the effectiveness of any given period of time is not a cultural value of Asian and Latin American cultures, which look at time very differently. These cultures view time as much more flexible and less distinct. For salespeople this is an important difference. When a salesperson from a Latin American or Asian company calls on an American customer, the customer will consider the time of the sales call to be firmly fixed, but for an American or Western European salesperson calling on a Latin American or Asian customer they may be frustrated to find out their meeting time is more flexible.

A third cultural value that is important in the global sales environment is the focus on the salesperson– customer relationship. Asian and Latin American cultures extend the business relationship beyond “work” and seek to develop a more personal relationship with their vendors. It is not uncommon for Asian customers to want initial sales meetings focused on personal relationship-building activities (dinner, sporting events like golf) rather than a formal sales presentation or negotiations. As you can imagine, this can be exasperating for someone outside the culture, particularly someone coming from a “time-sensitive” culture.

Differences in cultural values also play a role in defining an individual’s ethics. It’s a challenge for managers to balance corporate ethics rules with the business practices of cultures around the world. American companies face a particularly tough challenge because ethics rules in the United States tend to be much tougher than in many parts of the world. The Foreign Corrupt Practices Act (1977) forbids U.S. companies to bribe foreign officials. In 1998 the law was amended to allow for small payments that are consistent with cultural norms.⁶ When corporate policies conflict with local cultural practices, salespeople are in a difficult position. If they follow corporate policy, they may lose the business, but if they follow local business customs, they may violate company ethics policies. As you can see, it is critical for members of management to be aware of their salespeople’s customer experiences and to impart company policies clearly to avoid ethical problems. Even highly ethical salespeople and managers find themselves faced with very difficult choices. Given the challenges of selling across cultures, it is essential that managers understand how these differences impact their sales efforts, and recent research suggests that salespeople are much more comfortable making tough ethical decisions when their companies have a defined and consistently applied code of conduct, reinforce ethical principles in their training, and enforce corporate ethical policies.⁷

In chapter 4 we discussed the ethical and legal issues in contemporary selling, but it is important to note the role of culture in shaping and defining an individual’s ethics. Consider the issues of bribery and various cultural differences that exist around the world. In Germany and France, bribes have actually been tax deductible as a business expense until recently and, in many Latin American countries, despite laws to the contrary, it is a common business practice.⁸ American companies are not allowed to engage in bribery under the Foreign Corrupt Practices Act.

The final cultural element that salespeople need to consider is nonverbal communication. In chapter 7 we discussed the importance of nonverbal communication in the context of individual differences (everyone conveys and responds to nonverbal communication differently); here we will look at nonverbal communication in the context of cultural differences. Simple gestures that are taken for granted in someone’s home culture could have very different meanings in another culture. Consider the classic “thumbs-up,” which in American and European cultures means things are going well or according to plan; however, in many Islamic and Asian cultures that gesture is considered rude and offensive. Consider the impression a salesperson would leave with an Asian or Islamic customer by giving that gesture as a positive sign during a sales presentation. Another example is the widely used gesture for “OK,” which is generally recognized around the world to mean that things are going well. However, doing that in France or Latin America has very negative connotations, while in Australia it means zero. As with the earlier example, it is important for the salesperson to have a very good understanding of local gestures before presuming to use his or her own.

Business Practices

As you will recall from previous marketing courses, marketers have a set of tools they use to develop the company’s value proposition, then deliver and communicate that value to the customer. This “toolkit” is known as the marketing mix and consists of four elements (product, price, distribution, and promotion).⁹ These elements are profoundly affected by a company’s decision to move into global markets and, in turn, impact the contemporary sales process. Salespeople must be able to work with their customers wherever they are in the world, and to deliver the same level of service and product quality (at least, that is the expectation). At the same time, the complex nature of global supply chains puts pressure on the salesperson’s internal operations. The nature of global strategic relationship creates complex ethical dilemmas just like the Ethical Dilemma here. Finally, all organizations must adjust to a rapidly changing global economic backdrop. In this section we will examine four critical business practices that are affected by the global sales environment.

One of the first challenges in the global sales environment is the question of equivalent products, which refers to the degree to which products are comparable around the world. On the one hand, salespeople argue that products be customized to fit the needs of individual customers. On the other hand, operations/ production management generally argue for more standardization because of logistical challenges in getting various components and production challenges in making the product. Even in large trading zones like the European Union, where the member countries have sought to create more unified products, there remain hundreds of differences in many products, such as cars. For a company whose customers include automobile manufacturers, this presents some unique problems in selling the right product for the right market.¹⁰

At the same time, smaller companies face similar tough choices. Many smaller companies throughout the EU have traditionally made products for their home markets; now, with the expansion and opening of new markets in Europe, these small companies must decide whether or not to continue focusing on their home market or expand to new markets with different product specifications. It becomes more difficult if smaller companies count global companies among their customers, since local providers are frequently held to consistent standards across markets. In addition, smaller companies often find it difficult to get important market information in the first place.¹¹

One of the other challenges facing companies today, no matter their size, is the need to introduce products quickly to many markets at the same time. With today’s distribution and communication systems, customers in China may wait weeks, but won’t wait months, for a new product. This creates the challenge of complex logistics networks to manage the distribution of products to markets around the world. Salespeople must coordinate their customer presentations and manage expectations so that product changes, upgrades, and new product introductions occur with minimal disruption for the customer or their own company’s operations.

Pricing for global markets is a complex and difficult issue for salespeople. As a fundamental component of the value proposition, it is essential that the customer clearly understand the price and its relationship to the overall value of the product. For many years, companies would charge a competitive price in their home market, higher prices in foreign markets where strong competition was present, and still higher prices in developing markets where market conditions were less competitive. This was usually justified by telling the customer that higher manufacturing or service delivery costs or increased shipping costs were the reason for the price difference. Today, of course, almost every market is competitive and customers (no matter their size) have access to a great deal more information about the costs of the products they purchase. Information about products and their pricing structure is universally available and customers need that information to leverage better prices and terms from their suppliers. Exhibit 14.2 demonstrates the complexity of global pricing by comparing prices for an Apple iPad Air 2 across six countries.

Customers appreciate that transportation costs, currency exchange rates, and tariffs are different around the world but they also expect, and increasingly demand, their suppliers provide consistent pricing for all purchases, no matter where that product is purchased. Global, even local, customers are confident that if one company cannot match pricing for a particular product, someone else will. They believe that the location of manufacturing and the costs of shipping products are a constant; in other words, there is no difference in cost because of where the product is produced.

This challenge makes global pricing strategies very problematic. There is a tendency in many companies to charge their largest customers competitive prices while asking smaller customers to pay a premium. However, as mentioned previously, that strategy is quickly becoming obsolete as even very small, local customers have access to information about shipping and manufacturing costs. This is coupled with the fact that sophisticated transportation and communication systems take away the “local” advantage that many companies have relied on for years, essentially arguing that we are your “hometown” provider and will provide better service. Even small customers almost anywhere in the world can purchase a product and have it within a few days and receive customer support via the Internet or telephone. For the salesperson, it means having a clear understanding of the value proposition as an essential part of the contemporary sales process, as we have discussed throughout this book. If the salesperson cannot accurately define the value of their products to the customer, no matter where that customer is in the world, the customer will base their purchase decision on who has the lowest price—essentially turning the product into a commodity.

As a critical component of a company’s promotion program, sales needs to be particularly sensitive to adjustments in the global marketing communications. As we noted earlier, at the most basic level it is important that local customers receive communications in their own language. However, the challenge of global marketing communications is much more complex, involving coordination and consistency of messaging as well as accuracy and timing of customer communication.

When a company updates its website it must also have available all other marketing collateral (information sheets, product brochures, pricing sheets). This can be a challenge if the company has many markets spread around the world. At the same time, if the information needs to be translated, all translations should convey the same information—not surprisingly, this includes salespeople, who need to be trained and updated on any changes to the company’s product portfolios and pricing structure. If the customer can see it on the company’s website, they expect the salesperson to be knowledgeable. This can create an internal conflict for the company: they don’t want to release information too early because it can give competitors an advantage; however, and this is particularly true of salespeople, it is important that salespeople clearly understand and be able to deliver an effective sales message to the customer. As a result, they need to receive relevant information and be trained when necessary. All of this takes time.

Often companies will alert the sales force that changes are going to occur (product enhancement, new product introduction or changes in the pricing) and let them know that additional training will be forthcoming. The key is to be able to address customer questions and concerns. With customers having access to a great deal more information, they are often asking salespeople about the “latest product buzz” and it is essential salespeople be informed about their own products (and hopefully their competitors). Hearing about these kinds of changes from the customer is frustrating and embarrassing for the salesperson and appears unprofessional to the customer.

Technology

Technology has fundamentally changed the contemporary sales process. In many respects it has improved the customer–salesperson relationship but technology also creates new challenges for the salesperson. Let’s consider these changes from the perspective of both the customer and the salesperson.

The “old” customer–salesperson relationship model was based on the assumption that a company’s best customers demanded the most “face” time. Salespeople would call on them more frequently and seek to build a personal relationship with their key decision makers. While it is still true that a company’s largest customers require the unique benefits that personal selling brings to the customer–salesperson relationship, it is also true that customers are redefining what a successful relationship means. The Internet now allows customers to have an immediate, personalized, and comprehensive relationship with their suppliers without a salesperson. They can order, check on order status, review product information, and receive customer service. All of these activities used to fall under the job description of the salesperson. When the Internet was becoming a dominant business tool in the late 1990s, many salespeople became concerned that this would eliminate or greatly reduce the need for the personal selling function, but just the opposite has happened. The Internet has increased the need for professional salespeople who can identify the customer’s needs and deliver effective solutions. This is especially true in global sales. Indeed, most companies realize that a well-trained sales force is a huge competitive advantage in the global sales environment. In developing countries like Vietnam, companies often find that salespeople can use their product knowledge to gain the trust of their customers and win business.¹²

Technology has also impacted the global salesperson. Customers demand instant access to their salesperson and today’s technology enables that to happen. This has created a lot of pressure for global account managers as they struggle to accommodate the challenges of instant access, 24/7. Consider that many companies (IBM, Disney, Coca-Cola) have large operations in the United Kingdom that service customers as far away as the Middle East and even Asia. Salespeople based in London must be able to reach customers by phone or email even though they may be several time zones away. In addition, salespeople must be able to work with colleagues around the world to service their global customers.¹³

In addition, communication is now mobile and salespeople must be able to access and effectively use this new technology. For example, tablet computers are an essential business tool for salespeople and customers expect more effective sales presentations, faster and more accurate information, and better customer service overall from their salespeople. This means salespeople need to understand and be able to use these new technologies. Finally, technology enables “virtual sales teams” composed of individuals from around the world to effectively communicate with customers no matter where they are located. This is especially helpful with technical products where a limited number of people with sufficient skills (product knowledge and application, customer knowledge) are available.

Another challenge for many companies in a rapidly changing mobile technology environment is choosing the technology platform, developing the content for the platform, then giving salespeople the tools to use it effectively. In addition, salespeople must work within the constraints of local market conditions. In cities like São Paolo and Rio de Janeiro, both in Brazil, there is good access to Wi-Fi and cellular data networks, but in smaller cities coverage is not as good and a salesperson can find that his or her tablet (or laptop) is not as effective.

The use of technology in global markets becomes a very difficult problem for smaller companies, who need to balance the cost of the technology against the benefits. Increasingly local customers demand high customer service and large customers demand exceptional customer service, which means that salespeople need to know how to use technology and have access to customer information. When a customer contacts a company about a product inquiry, or a customer service question, they expect the salesperson to know, and this is true if that customer is local or a large global company.

Sales Organizational Structure

When a company makes a decision to move into markets outside of its home country, one of the first decisions it has to make is how to structure its international operations and an essential component of that structure is the sales force. Companies historically have created sales organizational structures built around one or more of three criteria: products, customers, or geography. While there are advantages and disadvantages to each one, there has been a trend in recent years for companies to move toward a sales structure focused on the customer, often combined with a second criterion such as product. For example, IBM creates sales teams focused on their customers, then brings in product specialists to help support these teams with product-specific information. The salesperson knows the customer well and looks for solutions to the customers’ needs based on IBM’s product and service competencies.

Most sales organizations start with generalists, people who know as much as possible about all the companies’ products; however, as companies evolve customers demand salespeople with more expertise in more specialized areas around their own needs. As we have discussed throughout the book, one of the keys to building a successful customer relationship is a thorough understanding of the customer’s business and how the company’s products and services can meet their needs. Once a company develops a set of major customers (accounts) in its home country, it generally creates a new sales position most frequently called “key account manager,” whose job is to manage large, important customers.

Many companies adopt a similar approach when they move to global markets and create global account managers (GAM), who are responsible for managing customers across country boundaries. Ultimately, these individuals are both the internal champion for the customer inside the firm and a salesperson for the company when dealing with the customer. They must have excellent selling skills but also good managerial abilities as they are frequently called to manage how the company’s personnel interface with the customer. With large customers and companies this may run into hundreds, even thousands, of people.

Generally, global accounts are managed in one of three ways. First, a company may have traditional sales organizations in each country (or use strategic partners) and the global account manager acts as an internal consultant working with local salespeople to manage the customer in each country. In this structure the GAM has no formal authority and the “local” national sales managers in each country manage the accounts. The second approach is a matrix configuration where the GAM reports to a global accounts sales executive at the company’s headquarters while also working directly with local sales managers to manage the account in each country. In this arrangement authority for the account is shared between the GAM and local sales manager. While these two approaches represent a majority of sales structures, this is changing, as companies move to a third structure. This structure is customer focused and pulls responsibility for global accounts away from local managers and gives it to the GAM. The global account manager is responsible for managing and setting the strategic goals for each account. They are also the primary point of contact for the customer with the company around the world. Local salespeople are used to facilitate local implementation issues with the account, working with the global account manager.¹⁴

Hire the Right People in a Global Sales Environment

You will recall that we discussed the importance of hiring the right people in chapter 12. In that discussion we mentioned that the future of the organization rests on hiring people that are able to effectively communicate the company’s value proposition to the customers and manage the customer–company relationship. When a company moves to global markets three additional factors are added to the process.

First, the company must decide on the qualifications for the job. Keep in mind that a global sales position, whether it is called global account manager or something else, is different from a sales position in a company’s home country. Many companies have found that using a sales job description from their home country does not translate well to a global position in other countries. Take educational experience, for example; many professional sales positions require a college education. But countries around the world have different educational systems and degrees, which can make it difficult to equate educational experience across cultures.¹⁵ For example, in some countries such as Germany people getting a master’s degree are allowed to use the title “Doctor.” However, in the United States, that title is used to reference individuals who have earned a Ph.D.

Second, legal protections for employees vary widely around the world and companies must be careful to follow the law as they move into new markets. In countries like Germany, once an employee passes a probationary period it becomes very difficult for that individual to be let go. While this does provide employees a level of confidence about their job security, it also means companies are more careful about their hiring practices.

Finally, the company needs to consider the type of individual for the position. As companies expand into global markets their employment options increase—more specifically, a company can choose to hire local nationals in each country, expatriates (generally this involves bringing in employees from the company’s home country), or nationals from a third country. For many years, companies around the world sent a significant number of expatriates to run their global operations. At the time there were reasons why this was a good option. The expatriates know the company and its products and are frequently familiar with the customers. Today, however, those advantages have diminished, as qualified individuals are now available around the world. While it is certainly true that companies still send expatriates around the world for specific assignments, the vast majority of global salespeople are hired from the ranks of qualified local applicants.¹⁶ Hiring local people does have some risks. In China, for example, there is a shortage of qualified salespeople in many fields (technical areas in particular), which can make it difficult to fill a position. In addition, because of the shortage of qualified applicants in some areas the cost of hiring the right person is high. Nationals from a third country are also an option, and in large companies you will see people from all over the world being moved from country to country. This may be due to customer considerations; perhaps the individual has particular skills that would be useful in this market. Often it is because companies are looking to develop potential managers by giving them broad international experience.

Training for Effective Global Selling

The challenge in global sales training is to understand that training needs vary a great deal around the world. While everyone agrees that salespeople need to be trained on new products and/or changes to company policies, the most important training needs are quite different across global markets. For example, in China the hierarchical management structure can create barriers for salespeople who need to be able to speak to decision makers in a higher position. (This tends to be less of a concern for British or French salespeople.) The result is that Chinese salespeople often need training on how to address and sell to people in supervisory positions. Cultural differences need to be a considered in creating a sales training program, particularly for topics such as effective communication, customer relationship building and account management.

In addition to the changes in training content based on cultural differences, trainers must be aware of technological issues in putting together sales training. As we discussed earlier, the technology infrastructure differs widely around the world, which makes relying on a web-based training program difficult in countries like Thailand or many African nations. At the same time, developers of web-based training need to consider those cultural differences when designing the training programs. The concern is that the training becomes country-specific and lacks broad applicability across different global markets.

A third challenge is that salespeople in a company’s home country generally have a better understanding of the company’s culture, since they frequently get to visit headquarters and benefit from knowing the culture of the home country. For salespeople working in markets outside the company’s home market this becomes more challenging. The issue becomes even more important when one considers that the salesperson is responsible for the customer relationship. As a result, many companies make an extra effort to train salespeople in global markets to understand not only the products and policies but also the corporate culture.

Motivation of the Global Salesperson

As discussed in chapter 11, motivating any individual is challenging and sales managers must use a variety of tools to motivate their sales force. The key difference between motivating the sales force in a sales manager’s home country and salespeople in global markets is the impact of the individual’s cultural needs, goals, and behaviors. As we discussed earlier, cultural values vary widely around the world and it probably comes as no surprise that what motivates someone in the United Kingdom will not work with someone from Brazil, Japan, or Australia. Researchers have identified six bipolar dimensions that define cultural differences around the world¹⁷ and also serve to define individual’s work-related needs and motivation (see Exhibit 14.3).

Source: Charles M. Hampden-Turner and Fons Trompenaars, Building Cross-Cultural Competence: How to Create Wealth from Conflicting Values (New Haven, CN: Yale University Press, 2000).

Understanding broad cultural differences is an important first step in motivating the global salesperson but the sales manager must link individual cultural differences with company programs and goals.¹⁸ The nature of most global sales positions requires people to be independent, which runs counter to some cultures such as Japan, where group consensus is a core cultural value. Sales managers must constantly assess whether the individual is a good fit with the company’s culture, which is likely based on the company’s home country. An individual’s motivation may be a great fit with a corporate culture from his home country but not a good fit with another corporate culture. Some Americans find working in German-based companies challenging because of the traditional hierarchical managerial structure. Americans are used to making decisions and following an action plan, while German companies generally take more time planning and vetting decisions through more levels of management.

Compensation of the Global Salesperson

Compensating salespeople is complex and it is difficult to create an effective plan that rewards and motivates the salesperson while helping the company reach its goals. We examined this issue in chapter 13 but, as you might guess, there are unique challenges facing the management team when they expand the compensation program to a global sales force. Initially sales managers must strike the proper balance between company goals and the specific characteristics of a global market. Consider sales executives in Germany and France. Both of the European countries are characterized by high income tax rates, so many companies adjust their compensation programs to pay less compensation in Euros but cover the cost of housing and other perks such as cars and even vacations. These kind of local adjustments are needed to motivate and retain good executives across the organization, not just in sales.

Moreover, sales managers must consider balancing overall company goals against specific country objectives. In emerging markets, for example, salespeople generally spend a lot more time developing new business and less time servicing existing customers, while established markets often require a higher level of customer service. While overall corporate goals may be seeking to improve customer service and compensation programs adjusted to reward people who hit customer service metrics, the local sales manager in a developing market may want the sales force focused on new business goals. In situations like this, local sales managers will often seek permission from senior management to adjust reward programs to reflect the needs of the specific market while maintaining some element of the compensation plan on the overall corporate objectives.

Another challenge is balancing compensation programs around the world. Currency fluctuations, local costs of living, and base-compensation packages can all create anomalies in compensation systems over time. The goal is that salespeople in the same position performing at the same level of success should be compensated more or less equally all over the world. If anomalies in the compensation do appear and are not adjusted, the results can be lower morale and performance inside the sales force. At the same time it is difficult for sales managers to fine-tune compensation systems and any changes in one country will be known by other salespeople in the company.

Evaluation of the Global Sales Force

Evaluation is a critical part of managing the contemporary sales process. This process comes to be even more important for the global sales force when we bear in mind that salespeople reside all over the world, making it difficult for many senior sales executives to see an individual’s performance firsthand. Evaluating the local sales manager becomes particularly important and speaks to the importance of a well-understood performance evaluation system.

At the same time, it is critical to realize that an effective performance evaluation system adjusts for differences across global markets. Consider our earlier discussion on cultural differences and the dimension of Individualism versus Communitarianism (Exhibit 14.3). For a salesperson from Japan, who values working in teams, evaluating the sales force on individual performance may actually work against the prevailing culture inside that group of salespeople.¹⁹ It is important to define evaluation, not only in terms of corporate metrics but also metrics that fit the culture.