[Seminar Report]The First Step in Sales Improvement Overseas - Building a Global Customer Base for Results in the Coronavirus Era
While the coronavirus has required transformation in corporate management, we will review this change by comparing before and after perspectives.
While the coronavirus has required transformation in corporate management, we will review this change by comparing before and after perspectives.
Before coronavirus, operations were designed with the premise of coming to the office and face-to-face meetings. The coronavirus changed all of that in an instant. Faced with an enormous external factor, companies had no choice but to shift online. With restrictions on going out, remote work and online business operations became urgent necessities. With the future of the coronavirus era unclear, post-coronavirus society is expected to operate with the coronavirus as a given, and even society's fundamental assumptions are changing.
There is a term called the "2025 Digital Cliff." This term was included in the Digital Transformation Report announced by Japan's Ministry of Economy, Trade and Industry in September 2018, two years before the coronavirus emerged. The report states that for Japanese companies to compete successfully in global markets, digital transformation is essential. Without pursuing DX initiatives, declining operational efficiency and competitiveness are inevitable. If competitiveness declines, Japan is predicted to experience an economic loss of approximately 12 trillion yen by 2025 - about three times the current amount. This is referred to as the "2025 Digital Cliff."
Due to the coronavirus pandemic that emerged last year, the Ministry of Economy, Trade and Industry announced the DX Report 2 (interim summary) at the end of 2020. In this report, it was revealed that 95 percent of companies over two years have not undertaken DX initiatives. The report emphasizes the need to develop the capacity to transform "quickly" and "continuously," and to transform not only IT systems but also corporate culture and fixed mindsets.
According to a survey conducted by Sansan in 2020, comparing before and after Japan's first state of emergency declaration, online negotiations increased 2.5 times, showing rapid adoption of online business meetings. Correspondingly, the number of business cards exchanged decreased by approximately 30 percent. In actual conversations with clients, many report that business card exchanges have been reduced to less than half.
What happened as a result of online negotiations? Many respondents reported that they struggled to adapt to the sudden change, resulting in declining quality of negotiations and order rates. In fact, 77 percent of respondents reported experiencing "loss of business opportunities."
This represents a critical situation for businesses. We cannot simply wait for the coronavirus to pass without taking action. However, unfortunately, the coronavirus crisis will not end quickly, and we as businesses must adapt and change with the new normal.
As we move forward into a new era, building a customer base provides two primary benefits.
1. Increased Productivity
2. Ability to Respond to Business Environment Changes
By promoting digitalization for productivity improvements, work previously done manually becomes automated, and wasteful processes become visible. As business process improvements progress through streamlining workflows and reassessing staffing needs, companies can dedicate more resources to data utilization and analysis.
The second benefit is the ability to respond to business environment changes. Market change speed is constantly accelerating. You likely feel the speed of foreign companies' operations more than Japanese companies do.
As with this coronavirus situation, purchasing behavior has also changed considerably. Regardless of location or time, inquiries, procurement, and information dissemination now happen almost entirely online. Previously, having a local presence was advantageous, but now companies compete on a global scale.
While companies must think about how to respond to these market changes, by advancing digitalization, they can not only adapt to business environment changes but also maintain operations even under future conditions like the coronavirus, enabling continuous adaptation to change.
This is essentially the same as the benefits of digital transformation.
Digital Transformation, also called DX, is defined as using cutting-edge technologies such as cloud computing, IoT, 5G, AI, and RPA to transform business operations.
There are two types of digital transformation.
The first step is DX 1.0, which uses digital power to transform business processes.
The next level is DX 2.0, which uses digital technology to create entirely new business models.
Examples include Uber and Airbnb, which represent DX 2.0. In today's digital era, the goal is to pursue DX 2.0. However, this cannot be easily achieved in one step; rather, it is best to advance progressively.
The first question is what database should be built. Within organizations, data is scattered everywhere. Customer data written on business cards, invoices, contracts, business partners, and employee data are spread across various systems. It is important to manage all this data centrally.
When converting data, the most problematic aspect is usually customer data. However, there are three challenges when building customer databases.
First, data is not entered, which is the issue of not accumulating information.
Particularly in Japan, many managers struggle with managing overseas local staff. Since salespeople are busy, data entry often gets postponed. Only the minimum necessary information is entered - customer information likely to result in orders or information needed for purchase orders. When salespeople leave the company, that information is often lost. Such valuable information can be completely lost.
Second, there are issues with deficiencies and duplication in entered information.
According to a survey report on customer data for B2B companies, it is common for data accuracy to be low, data to be duplicated, or data to be outright incorrect. Research indicates that 40 percent of customer data is not in usable condition.
Third, data deteriorates over time.
Company mergers and acquisitions, staff transfers, promotions, job changes, and resignations are events that occur regularly in every organization.
Without accumulated customer information, even when IT tools are implemented, operations often fail to become established. This makes DX difficult and slow to advance.
Without entering sales data, reflections on what went wrong become vague and ambiguous, making it difficult to apply insights to strategy development. This is a common problem.
First and most importantly, building a database that encompasses all business cards from within the organization is essential. Occasionally, we hear from non-sales departments that they don't exchange many business cards, so business card management isn't necessary. However, this view overlooks important considerations.
While administrative staff may exchange fewer business cards, the loss of this data can represent significant lost business opportunities and wasted time. What may seem unimportant to one person could be a valuable network connection for someone in another location or department.
Additionally, someone who currently has little work-related connection might be transferred or promoted in a few years and become a key contact for future projects and transactions. In other words, without being constrained by current departments or positions, converting all business cards - both those acquired in the past and new ones collected daily - into company assets is a critical first step in expanding business possibilities.
As for how to convert business cards into company assets, some may think business card management means simply digitizing business card information. However, Sansan goes beyond that. Not only does it accurately convert business cards to data, but by simply scanning a business card, necessary information for sales activities is automatically gathered.
Through this process, we have progressed from building a customer database foundation using business cards to leveraging the various functions of Sansan to utilize the accumulated relationship information as company assets in sales activities.
On the other hand, many companies face the challenge of using different customer databases for different business units or departments. This creates problems with data duplication and "crying separations" between systems. However, such data duplication and separation are inevitable to some extent, primarily because companies rely on manual data entry by individual departments. Sansan can solve this challenge as well.
- STEP 1: "Convert all organizational interactions into a database"
- STEP 2: "Leverage business card data in sales activities"
- STEP 3: "Integrate customer data across systems"
Companies like Poly Plastics and Daiichi Sangyo have been using Sansan across Japan and ASEAN countries to visualize and share networks and knowledge, strengthening their sales capabilities.
For example, Daiichi Sangyo traditionally emphasized strong personal relationships between salespeople and customers in their business approach. While this is certainly valuable, it resulted in customer information becoming personalized.
Daiichi Sangyo operates in Singapore and across 7 ASEAN countries at 10 locations, deploying sales through a matrix organizational structure called "business areas" in collaboration with national staff. This personalization of customer data was inefficient from business efficiency and continuity perspectives, making it difficult to achieve synergies between departments and locations.
Using Sansan, they built a globally unified customer database foundation, enabling easy search of customer information across countries and business units. They continue to strengthen sales capabilities through utilizing this data.
In the Middle East case, whether viewing it as a "Middle East" region or an "EMEA" region, the broader the network sharing scope, the greater the benefits certainly become.
We've introduced Japan's current DX status and examples of tool usage. The following five points are key takeaways from this first part.
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- Marketing DX differs from digital shift; it transforms marketing itself through digital transition.
- Without promoting DX, companies cannot keep pace with societal digitalization and will fall behind in marketing.
- By implementing MA and CRM tools, companies can manage customer information and behavior, optimizing promotional activities.
- Instead of bulk email and direct mail, companies can now leverage chatbots and LINE, integrating with MA and CRM tools to optimize marketing activities.
- Beyond tool implementation, centralizing and visualizing data is crucial for marketing efficiency.
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