How To Market To The Japanese Consumer: The Biggest Lesson From My First Year Doing Business in Japan
There are things you can only learn from the trenches — hopefully, this article will expedite your own process.
I launched my service in Tokyo early 2018 and like most entrepreneurs, I did it because I felt passionate about solving a problem. In my case, the problem was the lack of confidence that most Japanese feel when having to speak English.
As a non-native speaker myself, I kicked off things following the motto “Building confidence in English, one memory at a time.” Confident in the innovativeness of my methods, I began to scour the market, sharing my experience- and logics-based arguments that would surely motivate people to try my service — my evangelizing of sorts. But soon I hit walls. People were behaving in ways I didn’t understand. Prospects seemed utterly uninterested in the “novelty” or “effectiveness” of my solution.
This is the story of my first year doing business in Japan, the lessons I learned, and my advice for anyone wishing to sell in the Japanese market.
Early Blunders: A Bull in the China Shop
After my first year of hustle, I was forced to recognize I was running into the same type of frustrating situations over and over. In fact, I delineated three scenarios.
Dialogue of the Deaf with Prospects
My prospects would ask me questions that I found borderline offensive because I couldn’t possibly understand where they were coming from.
Sometimes it would be questions that could be answered by simply loading the top section of my landing page: thinking that my prospect had been unable to find the information, I would write a polite answer with a link to the relevant page or with a document attached. Then, I would never hear from them again.
Sometimes I would launch into passionate discussions about the limitations of current English learning methods and give my best advice for the prospect; but again, the prospect would not engage in the discussion and seem underwhelmed. Why come to me if you are not looking for a better solution, I would ponder?
Wobbly Business Partnerships
As I needed to take on jobs to get some cash flowing in, I began doing translation and coaching jobs. Oftentimes the client would either not mention all the details of the agreement from the get-go, or, change the details of the agreement once we had already started working together.
For one translation job, the client decided to change one piece of text I had already translated while not apologizing or proposing to increase my compensation. During one coaching job, after I had labored to write a transcript and create slides for my client’s pitch, they decided to scrap the whole presentation and start anew, again without any mention of my time or of increased compensation. For yet another project, the client would have had me signed a contract without even discussing compensation: I had to be the annoying foreigner who brings unsavory topics to the table.
Sometimes though, the surprises were positive: during a project I thought I had agreed to do pro bono the client announced right before the deadline that I would be paid X amount.
Networking down the Rabbit Hole
Up until I started my business in Japan, my relationships had always been clear. Friends and family were most important: they are the people I love and who love me. Then, colleagues and business partners, if not friends, are the people I hustle with during work hours. Lastly, I was lucky to have several mentors throughout my first decade of work. I would meet with my mentors regularly to discuss business and sometimes life.
Once in Japan I decided to tap into my existing network. I would meet potential mentors who seemed to take an interest in my business and would invite me to join a dinner or have drinks. However, we would never talk about business (Let me attest here that I never found myself in a flirtatious or embarrassing situation with these older men, which now that I think of it, is perhaps worrying in another way. I kid, of course). They wouldn’t ask questions about my business or try to help me solve problems. Afterward, there would be a message thanking me, and a couple of weeks later, another invitation to some event or dinner.
My time was falling between two stools. On the one hand, I was not having fun: These people were not my friends, and I was not connecting with them in any meaningful way or having a cramp-inducing belly laugh. On the other hand, my business was not making progress either.
Truth be told, after a year or so my frustration had no limits. And this frustration clearly had to do with time. My prospects, my business partners, and my supposed mentors seemed not to value my and even worse, their time. Time was wasted on things that didn’t matter or didn’t make us happier. My business was growing at the pace of an amputated octopus trying to climb Mount Everest, and I didn’t know if I’d have enough cash to survive much longer.
Time, Agreement, and the Foundation of Business
I cannot recall how my aha moment occurred. It was probably the result of many readings and conversations that eventually clicked together after a good night’s sleep.
It was the realization that all along I had been negotiating the content of business dealings, while my counterparts were negotiating our relationship.
When my prospects asked seemingly irrelevant questions, they were doing so to determine whether I was someone they’d want to do business with. Meanwhile, I was focusing on whether my solution was a good fit for them.
When I agreed to translate a text for a client, from my point of view the agreement was “I will translate these 3,000 words at a rate of X by the deadline.” For the client, the agreement was “Lina will be our translator for this project.” Hence for them, changing the content of the agreement did not threaten its validity. A while ago, a Japanese friend had advised me to always include a buffer in invoices. At hearing this my first reaction had been to think it was an unwarranted practice because the buffer was not justified by cost or value creation. But now I understood it was meant to cover the coming changes in the specifics of the agreement.
When I was asked to spend many evenings drinking and socializing with no business on the agenda, it was because my potential mentors were evaluating me as a person, trying to determine whether their reputation might suffer if they opened their network to me.
In summary, for me business agreement was on the object. For my Japanese counterparts, the agreement was on the relationship. As my good friend who worked at a Japanese multinational conglomerate for several years puts it, “In Japan, people buy the person.”
I don’t need to know personally, trust, or even like a person to consider doing business with them: I just need to trust that their solution will solve my problem. In a way, I am willing to take the risk that things might not work out. Some of my best friends would certainly drive me crazy were I to work with them. Conversely, some of the people I work with best do not qualify as my friends — there is no such expectation from either side, and that’s okay. There are all sorts of people and as many ways to connect with them, and so my expectations for friendship and work diverge.
However, this perspective does not describe the general way of doing business in Japan, where you would hardly ever buy from someone you don’t trust. In order to trust you, people need to spend time with you. Here, though, the term “relationship” should not be understood as a fit of personalities stemming from a reciprocal desire for closeness, but as the reduced uncertainty derived from shared experience. The ins and outs of the relationship will be defined by Japanese etiquette, rather than by instinct.
To be clear, the rules of good business are probably universal. No matter where you are, if your clients trust and like you, your business will be better off. And even if you spend much time courting a Japanese client until they decide they trust you enough to buy from you, if your service is not up to par, the outcome will be a resounding sayonara. But the way we build trust, or perhaps even the very way in which we experience trust, varies across cultures.
In his fascinating book The WEIRDest People in the World: How the West Became Psychologically Peculiar and Particularly Prosperous, Joseph Henrich advances one possible explanation for this. He links the West’s unique openness to strangers to the Catholic Church’s meddling in matrimony: By imposing strict rules on who Europeans could marry and not marry, the Church forced people to venture outside their immediate network.
Object or Relationship: A Long-Standing Misunderstanding
Regardless of what explains this difference in the way people do business, a look at history shows misunderstandings have been wreaking havoc in US-Japan relations for a long time.
In The Perry Expedition and the “Opening of Japan to the West,” 1853–1873: A Short History with Documents, Paul Hendrix Clark documents the dozens of American missions sent to Japan in the first half of the nineteenth century to try — in vain — to open up the country. In 1846, President K. Polk sent Commodore James Biddle with a missive aiming at talking the shogun into considering trade with America. The letter is two pages long and can be summarized to “We are a great nation with ships passing by your shores weekly. We would like to engage in trade with you, as we believe it would benefit both our countries.”
Answer from the shogun: “We don’t do trade with foreigners. Please respect our decision. The Nagasaki port is no precedent for an opening of Japan.”
In summary, President Polk is negotiating the object, trying to explain why trade between the two nations makes sense and would be beneficial to both parties. The shogun refuses on the basis that they do not have a relationship.
Of course at that time, Japanese rulers were keeping a close eye on the imperialist threat posed by Western nations. Trust would have required significant time to materialize. In addition, a key issue for America was the poor treatment of its shipwrecked sailors by Japan. Nonetheless, President Polk would have likely increased his chances at a positive outcome by sending gifts regularly and showing goodwill instead of trying to “convince” the shogun.
The stake for President Polk was to graduate from unpredictable stranger to known and trusted entity.
If you think this might only be relevant in the past, think again. In February 2021, I visited my local Japan Post Office to inquire about opening a corporate bank account. I had been using an online bank, but in order to apply for COVID-related help from the government, I needed a bank account at the Japan Post. The clerk informed me that as a foreigner, my chances at being granted a corporate bank account were low, but that since my company had been around for three years, I had a chance.
Note that the bank did not mention the content of my business, or even its performance. Specifically, they mentioned time. Time spent in Japan, which means you are a known quantity, which means you might have relationships within Japanese society that could warrant the bank’s trust.
Similarly, if you’ve ever applied for a visa in Japan, you’ll have experienced that getting clear-cut information about the required documents and the procedure is difficult. Contrary to a Western approach, where a list of criteria is made publicly available, and you either fit the bill or not, the Japanese administration prefers a case-by-case approach. That’s because what they are testing is the strength of your relationships, not your individual value as an applicant.
The ramifications run deep. One heated debate in fiscal policy is how long the Japanese government can sustain increasing levels of public debt. The answer might well be forever, or at least as long as Japanese society exists, insofar as the transactions are predicated on a relationship: “You are the Japanese government and I trust you. I know you will pay me back one day, perhaps in four generations, once you have the money to do so.”
The agreement is not “According to your credit rating and the current state of the economy, I estimate an 80% chance that you will pay me back within twenty years so that I will recoup my investment.”
It would be erroneous, however, to see this reliance on relationships as corrupt practices or bad management. Economics and the principles that ensue were enunciated by Westerners who held a specific view of the world. If Joseph Henrich is correct, we could hypothesize that economics as a discipline was developed to fulfil a need to formalize the relatively chaotic way in which object-based societies functioned. If so, the laws of economics are in fact context-dependent: In a relationship-based economy like Japan, the logic underlying transactions will differ.
We can choose to dismiss the role of relationships in the economy, but it doesn’t make them any less potent in practice. In Influence: The Psychology of Persuasion, Dr. Robert Cialdini quotes a study of American consumers by researchers Frenzer and Davis while discussing the effectiveness of Tupperware parties as a sales tool. The researchers estimated that, in purchasing decisions, a request by a friend or acquaintance is twice as likely to lead to a sale as perceived product quality (“Chapter 5: Liking”, p.168).
In their article “The rise and rise of business as a force for good,” Inc. Magazine journalists document this trend toward business as more than a money-making machine. They quote a 2013 study by Carol Cone according to which 90 percent of consumers expect companies to care about their impact on community, society, and environment. They also relate Jim Collins’ inquiry into the performance of 14,000 businesses. He showed that the most successful businesses over the long run focus on mission first. Money flows in as a result of a strong sense of purpose.
As Ray Dalio reminds us in his must-watch How the Economic Machine Works, an economy is the sum of all the transactions that occur in a given period of time within a given geographical area. In order to measure and spur these transactions, we have developed complex tools that invariably make us forget to look at the more practical human side of the equation.
Because Westerners are open to transactions with strangers, they naturally engage in higher numbers of transactions and at a faster pace, allowing for high and fast returns (and here, we can see how the Internet represents a true level playing field for economies). Similarly, the more an economy relies on credit, the more it can boost its spending. In a society where people seldom engage in trade with strangers, returns on investment will follow different mathematical laws.
How does all this apply to you if you want to expand to the Japanese market or perhaps are starting a business in Japan? Let’s review two fundamental implications for marketing to the Japanese consumer.
How to Market to the Japanese Consumer
Two mindset fixes will help you get ready to do business in Japan.
People don’t buy what you sell; They buy from YOU.
The fundamental questions that your prospect is trying to answer are “Who is this person? Who do they know, and can I trust them?”
If you are starting a business, your job as an entrepreneur in Japan will be to build roots. You need to build these relationships from the ground up, and it is going to require time and funds. Whatever timeline or budget you have, you can easily multiply it by a factor of three.
In order for you to survive and make it work, you’ll need to find your key relationships, those with the highest ROI. Who is my customer? Who do they admire or trust? Who is a key person with all the right relationships? Why would they introduce me or my product to their network? What can I do for them that is valuable beyond expectations? Should they become my co-founder, my first user, my promoter? It is influencer marketing on amphetamines.
If you are a company expanding to the Japanese market, you will need to look for a local intermediary or representative with the right connections. Since social status is very important and people literally see themselves as the sum of their relationships, you need to scour the market and never stop until you find that key person who embodies your values and has the right connections.
Most importantly, do not rush. Take all the time you need to find that key person. Once you have entered and developed the relationship, it will be very hard to sever it. If the relationship goes sour, it only takes one email from your Japanese contact to close all the doors they have opened for you. Take time to trust them, just like they’ll need time to trust you.
Lastly, in your first interactions, you’ll want to use every single possible recognizable connection to Japan you have. You came to Japan with your parents when you were five years old? Say that. Your university welcomed a few exchange students from Japan? Mention it. You shook hands with a famous Japanese writer? Good enough.
It also works if you are connected with a foreigner who is well-known in Japan. Your university professor wrote an international bestseller? Interesting trivia. Your mentor is a famous chef? Get a recommendation letter from them. Your sister married a Hollywood star? Show a wedding picture! You studied at Harvard? You probably already mentioned it anyway… (Sorry; I kid!)
Keep Sane by Defining and Enforcing Clear Boundaries
The main downside of relationship-dependent business is that it quickly becomes an all-consuming, unwholesome endeavor.
You will be asked to participate in meetings with little added value. You can say goodbye to the “Facebook is private, LinkedIn is professional” dichotomy, as your clients will contact you through email, text, social media, and any means that suits them. If an answer is not given within two hours, an apology might be expected. You will be asked to give up time with family and friends on evenings and on weekends, lest you compromise your sleep and health.
Of course, you want your business to be successful. But perhaps you know that since your main clients will be large corporations, you are going to need to spend a lot of your free time drinking and playing golf. In addition, you know that is not a temporary state: the relationships will need to be maintained. You’ll need to ask yourself “How much of a personal price is too much for me? Where is my limit? Sure, career success is important, but is it worth not seeing my kids or going through a divorce?”
There is no one-size-fits-all answer to this question. However, since the demands on your time might be significant, take a moment to establish some rules of thumb. When is off limits? What do you accept to do, and not accept to do? How do you refuse invitations politely? What relationships do you invest in, and what relationships are not worth your time? How many meetings do you accept to go to without talking about business? Do you set a time limit in the evening, or a limit on the number of drinks you will have? Do you define your limit in terms of being able to exercise or sleep a certain amount of time per week?
Define your boundaries in terms of time and behavior. Write them down. Paste them on your office wall. If the price is too high for you, can you find a Japanese partner or salesperson to do this work for you?
This being said, if your product or service is great and fulfils a clear need, it will be easier to build relationships. The greatness of your solution will ensure that your clients recommend you and accelerate word-of-mouth as knowledge of your solution will make them look good. People will be much more forgiving of any strange behavior, especially from a foreigner, as long as your service makes their life better.
In conclusion
So, there you have it — my biggest learning from a year and a half of pure hustle and pure stress. It is the very simple (and by no means new) yet consequential realization that business can be conducted by negotiating the object or the relationship.
These differences in how we approach business probably also explain why bootstrapping entrepreneurship is virtually non-existent in Japan. You need a name to sell, but as an entrepreneur you have no name by definition. The typical Japanese entrepreneur is an older man and former employee who is using his network to sell freelancing services. Unless you already have the relevant relationships, starting from the ground up will require a wealth of time and funds.
This relationship-based economy manifests itself in a myriad of anecdotal ways. For instance, my Japanese friend works for a company that provides “internationalization services.” Despite having asked her a few times, I still cannot quite make out what it is that her company sells; nor does it seem clear to her. The truth is that the company doesn’t sell a particular product or service; rather, the founders have established relationships with other business owners whose areas of work are related in scope, and so, whenever these relations have a need for something that falls within the expertise of my friend’s company, they will establish a contract based on that. Business is created to fulfil the relationship, and not the other way around. I suspect that a large share of Japanese service companies work in this way.
This would also explain why my clients are generally reluctant to follow the rules of my service and tend to ask for exceptions or modifications or extra-care or suspensions or deferral, etc. (bless them; I will be flexible if I can since working with them is worth it!). Similarly, this sheds light on the way in which junior recruitment works: Large Japanese companies recruit fresh graduates without having specified a position within the company. It is only after recruitment, and sometimes after an induction period where the new hire is assigned to several different departments, that the company will decide what department the new employee should join. Although fresh graduates can express their preferences, ultimately, they have to accept the options lain before them.
I once exchanged time management tips with a Japanese entrepreneur. As we were discussing how we keep track of tasks and progress, we realized that we did not structure our to-do lists in the same way: Whereas I reasoned from thematic categories (admin, operations, marketing & sales, etc.), his to-do list was organized by counterpart (categories bore the name of the beneficiary or target of his actions). Too anecdotal to demonstrate anything, of course — simply, I’d never have thought of organizing my to-do list in this way before our conversation.
Two years after launch, I had found my peace in striking a balance. In the West and perhaps particularly in the States, we say that “business is business” or “business is not personal.” But the idea that we should turn into robots the moment we step into work, much like the idea that economic actors — the homo economicus — make rational decisions in free markets, is likely unrealistic if not naive.
Business is about solving the problems of people, marketing to people, hiring and managing people. Business is and has always been about creating and nurturing relationships. As an entrepreneur especially, considering you’ll need to put in eighty-hour workweeks for years on end, you better make sure you like the people you work with and serve. Of course, you might still be successful if you don’t, but I’ve never seen a happy person with crappy relationships.
It is not to say that the workplace should be allowed to be a place of gossip and idleness. I am a firm believer in the nearly cathartic power of the team as the union of minds toward a shared goal, where every teammate is focused on the craft and giving it their best. But as Daniel Coyle demonstrated in The Culture Code, this type of team synergy is achieved precisely as a result of high emotional safety among members. In summary, it is the unwavering quality of relationships within a team (based on clarity, transparency, openness, and support) that allows its members to focus entirely on the goal.
At the same time there is a need for boundaries. When your work is defined by your relationship to the company (who you are in relation to the whole) rather than your role in advancing the cause of the company (what you do), the individual is at risk of being swallowed whole into the system and ground hard.
The Japanese conglomerate juggernaut has caused generations of men to become alienated from their families who’d prefer they stay away and generations of children to grow with little involvement from their father. Companies ask employees to go drinking on Friday nights, play golf with clients on Saturday afternoons, and prioritize the group over their personal health. Having no choice, young employees convince themselves they are enjoying this process.
But this doesn’t have to be you, and things are changing in Japan too. Once I understood the rules of the Japanese business game better, I sought out those relationships that would make all the work and sweat worth it — and I have found them. Being forced to define my business in terms of relationships turned out to be a blessing: It has made the daily grind enjoyable.
