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To Know Your Customer’s Culture, Understand the Differences
December 20, 2016 Suhail Karim Beg, Business Development Specialist, Office of Small Business

Being aware of cultural differences and sensitivities is the softer side of due diligence but nonetheless important. As Mr. Gabriel Ojeda, President of Fritz-Pak Corporation and an EXIM Bank advisory board member pointed out when asked during an EXIM Bank Going Global Webinar, “What is the number one piece of advice you can give to companies that are looking to export?” His answer: “Get to know everything about your customer and their culture”.

Cultural Faux Pas and Business Norms

Do you know when not to make eye contact when giving a sales presentation or whether or not to slurp your soup? What about never using your left hand to eat? ANSWER KEY BELOW.

Knowing your customer’s customs, values, and traditions is an important step on the path to an enlightened and enduring relationship. However, knowing how these norms affect the business development cycle and attitudes towards time and quality of product is equally important. 

To Get Results … Understand Differences

Time is a business commodity in the U.S. where it is valued above all; after all, “time is money”. Well, yes and no—even within the same culture. At a panel discussion on Doing Business in Africa & the Middle East, Nosherwan Raja, CEO of TASC, made a point of US businesses working overseas leaving enough flexibility in operating budgets to allow for a cyclical (i.e., tomorrow is another day) versus a more linear approach to time management. This holds especially true at the early stages of the relationship and before even attempting to close the sale. 

In the Middle East and Sub Continent, arriving early for a meeting puts the host in a difficult position as they might not be there yet or are still occupied with their last meeting. Whereas in Japan, arriving early is polite but pushing forward for closure or “putting the cards on the table” before a chance to establish trust and build a relationship is considered untoward in both Japan and the Middle East. A little patience and a dose of polite restraint can pay deep dividends for a U.S. company doing business in the international arena.

Studies published in The Journal of Consumer Research (Lalwani & Shavit, August 2013) suggest price-quality judgments tend to differ across cultures with price more often the determining choice in South and East Asian countries where individualism is less valued than a holistic interdependent approach to decision making. In cultures that prize individualism, Western societies, price sensitivity is based on a more analytical approach with product decisions based on a comparison of different product attributes over price alone.

Cultural awareness does not imply that extending terms of 90 days is to be gauged on some sort of sliding scale but more an appreciation for the amount of communication that should be documented and the timing of these communiques. Patience could be a virtue in developing some international relationships, not so in others. Knowing the differences is what could hold the deal in the balance.  If you are interested in learning more about lining up financial support for your international business opportunities, then contact one of our trade finance specialists today!

ANSWER KEY (in order) Asian, African and Latin American cultures / Japan / Middle Eastern African, and Asian Sub-Continent / Middle Eastern cultures.

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