Marketing automation is new in Japan, and it’s taking a lot of Japanese companies off guard. For decades, sales in Japan have been done by armies of salarymen in navy-blue suits visiting clients and marketing, well until recently, most Japanese companies didn’t make much of a distinction between marketing and advertising.
This week, we get a chance to sit down and talk with Sunao Munakata, the founder of Innova. Sunao and his company are at the very heart of the rapid transition from simple advertising to content marketing and marketing automation. We explore the trends driving this change and where its leading.
Sunao also give a lot of practical advice about what questions you need to ask in order to tell a good content marketing company from a bad one, and he also explains some of the basics of running a successful content marketing strategy in Japan.
There is a lot of information distilled into only 30 minutes, and I think you’ll enjoy it.
Show Notes for Startups
- Why large Japanese companies still don’t get marketing automation
- What’s holding back marketing automation in Japan
- How to tell a good content marketing company from a bad one
- How the role of the salesman is changing in Japan
- Why traditional Japanese companies never worried about marketing at all
- Why so many of Japan’s founders come from Rakuten
- Sunao’s own winding path to entrepreneurship
- How lifetime employment is killing innovation in Japan
- The best content marketing strategies in Japan
Links from the Founder
- Innova Home Page
- Sunao’s Blog
- Follow Sunao on Twitter @sunaomunakata
- Friend him on Facebook
- And check out Sunao’s book on marketing in Japan (Japanese)
Transcript from Japan
Welcome to disrupting Japan. Straight talk from Japan’s most most successful entrepreneurs.
I am Tim Romero, and thanks for listening.
Traditional Sales and Marketing Strategies are beginning to break down in Japan. For about half a century sales was done by legions of men in blue suits and white shirts. Marketing was done well by Dentsu mostly, but this is changing.
Sales and Marketing are becoming at the same time more distributed, but also more streamline and cost effective. Now, some companies are fighting this change, but they are on the losing side of that battle, and most of them know it.
Today we sit down with Sunao Munakata, the Founder of Innova. He and his company are at the very hart of this change. We will talk about the big picture changes of course, but Sunao also has some very practical advice about what question Founders and Marketing Managers need to ask in order to tell a good Content Marketing Company from a bad one.
He also explains the basics behind a successful Content Marketing Strategy here in Japan. You know, Innova is a fascinating company that almost didn’t get started, but I will let Sunao tell you that story in his own words. Let’s get right to the interview.
Tim: I am sitting here with Sunao Munakata of Innova. Which specializes in Marketing Automation and Content Creation. That is a high-level explanation. Why don’t you give us a little more details on what you guys do.
Sunao: Okay. We are helping out companies doing the Online Marketing. By providing Marketing Automation and also helping companies to create Content which is relevant for their potential customers.
Content Marketing is actually becoming a kind of buzzword these days because people are trying to find information by themselves.
Tim: Actually, let’s dig down on both of those concepts separately. Because Marketing Automation and Content Generation are both important. They are both buzzwords.
Tim: They are both very different really.
Tim: Marketing Automation.
Tim: It is a lot of things to a lot of people.
Sunao: Right, right. Yeah, I personally dislike the word Marketing Automation. Because it sounds like a magical box.
Tim: Like a black box. Just put a quarter in it will do your marketing.
Sunao: Yeah. Actually Marketing Automation is a tool to do the one-to-one personalized Marketing. We are a customer in a way to Amazon Sales. Like they send out recommended e-mails to individuals.
Sunao: Boxes, like things sending out kind of spotty e-mails to everyone.
Tim: That is interesting because even the big internet companies in Japan are not very sophisticated.
Tim: In the way they run this, so Rakuten certainly sends a lot of uncustomized e-mails. GMO is probably the worst if ever. Why is that? Is Japan just not aware of these Marketing Automation and Personalization Tools or have they not been working in Japan?
Sunao: Well, I think there are two factors here. One is for most E-Commerce Companies you know that we sell their products. They have to store some place. Then the system they provide is very limited.
The kind of things people buy for example. How many times they bought? What pages they leave. It is very limited.
Tim: Yeah, yeah.
Sunao: You cannot tweak Purchase History for example.
Sunao: One issue comes from the systems related with marketplace. The other is there are e-mail providers, but their Marketing is not good enough to convince companies to spend tyrant money to personalize all of these e-mails. Because if you wanted to send 5 different e-mails. You have to create 5 different batch, right.
Tim: Right, right.
Sunao: Which is too much work. This is really an issue when you work at Japanese Companies. Your performance is measured not by sales you made, but by not making a mistake.
Sunao: You just stay the same. You don’t want to do that. It’s nothing special.
Sunao: And sending reports.
Tim: You only lose points.
Sunao: Right. That might be another point, I think.
Tim: It sounds like you are saying that the Marketing Automation as a type of technology bridges that gap between. It is automated enough that human beings don’t have to be involved with so much of the creation. It will give you the performance increase instead of just sending out standard e-mails. Uncustomized emails.
Tim: Do you think the opinion of Marketing Automation is changing in Japan now? Let’s see just last year, Marketo a big Marketing Automation companies coming to Japan. They seem to be making a lot of impact quickly. Do you think Japan is kind of coming around to this idea, this technology?
Sunao: Yeah, I think it is. It is changing because Marketo Company, HubSpot local reseller which is sold here. What’s happening is right now is that they are spending so much money to advertise about Marketing or with Automation, and also letting people know kind of success cases of Marketing Automation.
Tim: I guess raising that kind of awareness is good for everyone in the industry though, right.
Sunao: That is what is happening. Right now, many local Japanese companies started saying that we are providing Marketing Automation.
Sunao: You know, e-mail marketing companies want to do that, or some small software. Some kind of confusion is happening, Customers are gaining awareness and you know there is a lot of interest.
Tim: Let me ask you this then because of you know the companies I have run in the past. Marketing however you do it is an incredibly important part of corporate survival.
Tim: I am constantly being approached by companies who claim they are experts in Marketing Automation. I am sure everyone else is too.
Tim: As a Founder, what questions should I ask the Marketing Automation Companies to know that I am getting good value from them? The really know what they are doing.
Sunao: Yeah. You should ask what business result you get. Many Marketing Automation companies, companies want to tell about the features, but you don’t want features. You want either more revenue or lower cost.
Tim: Good companies will be able to align with your needs.
Sunao: Yeah. Mm-hmm.
Tim: Rather than just giving you a list of activities.
Tim: That makes sense. With the Marketing changing in Japan, do you think because one of the things I have seen changing in the last 10 years is the whole sales process in Japan. Particularly the B2B processes to be changing.
Sunao: Yes, very interesting.
Tim: When I first came to Japan the sales process was sending 4 guys out in navy blue suits to go give a PowerPoint Presentation.
Tim: There is still a lot of that.
Tim: How do you see that changing today? Do you see that as still the main way sales are being made to companies, or do you see it being more web driven and more inbound?
Sunao: It is changing, but let me tell you an interesting story.
Sunao: One guy, actually these women sending message saying that I graduated from the same high school with you. I just joined this business consulting company. I am training field right now. I need to make an appointment with a CEO, Management of some Companies.
Tim: Right, right.
Sunao: Need to do these sales. Can you meet with me? We went to the same school, right? I was really kind of upset. Because we graduated from the high school, but we have never met before.
Tim: Personal networks are very important.
Tim: That is kind of pushing it, yeah.
Sunao: I think it over and I tried this. Okay, I meet you. Give me 30 minutes. I do the sales as well. You do the sales and I do the sales. That’s that. That’s what is fair to you. I set up a meeting.
Tim: I don’t know I think you are a better salesman than her.
Sunao: She talked to me as the boss. You know had a meeting with the Head of Sales kind of guy. Actually, he is from Recruit.
Tim: For our overseas listeners that is the by far the largest recruiting agency in Japan.
Sunao: Recruiting Agencies are notoriously very famous for strong sales, right.
Sunao: He explained their purpose. Then 30 minutes passed, and then I do the sales, right. You are in charge of the sales and you doing these outbound sales. Haven’t you seen the kind of difficulties to make an appointment? That kind of stuff. He said yes. Actually, people are hating to make an appointment themselves.
Before, like 5 years I don’t know 7 years ago. You only have to do 50 calls to get one appointment. Right now, you have to do 100 calls or 200 calls to get 1 appointment. Because people hate. If they are the CEO, Assistant wants to pluck your eyes.
Tim: Well, I think the biggest thing that has changed in that is 15 years ago say you needed to talk to the salesman to get information.
Tim: Now, you can go on the internet.
Tim: And get the information. You can get the price. You don’t really need the salesman anymore.
Sunao: Right. Yeah, that’s exactly what is happening. Basically, the same thoughts as this guy. He is very much interested in us.
Sunao: Yeah. He is in charge of not only the Sales, but those of the marketing. Although he is very confident with the sales capabilities. He also has the sense that he cannot keep on doing this for another 5-10 years. He wants to change how sales are doing. I also invited him to join the Seminar we have every week.
Tim: I love sales calls like that. This is awesome.
Tim: Did Recruit become one of your customers?
Tim: You are still working on it, okay.
Sunao: Still working on it.
Tim: Recruit really is, they are still sending the guys out in the navy blue suits that are doing who are doing it the old way.
Tim: You do see it changing too then huh?
Sunao: Yeah. Can I give you another interesting example?
Sunao: This about company. They have been sales of about 200 million located in Osaka in Western Japan. They are the manufacturing company who create factory plant which let you filters salt water into purified water.
Sunao: They happen to find my books which is probably last December.
Sunao: That’s a lot of Content Marketing. Typically, all the fashion Japanese companies don’t even have the Function Marketing. They are the unit of Engineering Team which basically create the product. They have sales, but there is not Marketing. That is very often the case.
Tim: Traditionally, how does a company like that bring a product to market and raise awareness?
Sunao: You have a history of the company like 20, 30, or even 50 years. Then you have existing customers. Also, typically some Japanese companies creating keiretsu.
Tim: The Corporate Groups.
Sunao: Corporate Groups.
Sunao: If you are focusing on some niche. You don’t want to spend money on distribution or marketing. You really want to spend money on R&D.
Tim: That’s a really good point. Traditionally, I would say right up until the 1980s really most of the time other members of the corporate group would take care of Marketing.
Tim: A lot of sales too.
Tim: For these individual companies.
Sunao: Right, right.
Tim: That’s really broken down now hasn’t it?
Sunao: Yeah, yeah, yeah. I see the big event that Nissan, famous CEO took the CEO position of Nissan.
Sunao: He literally broke down. Announced that keiresui-like supply will be reduced by like 80 percent. Then okay it is company needs to lead by themselves.
Sunao: That was enough.
Tim: He just completely changed the supply chain.
Tim: Although, the result of that though was he didn’t so much change the supply chain. It was mostly the same companies.
Tim: They just changed the way they did business.
Tim: It was the same companies before and after.
Sunao: Right. Yeah, there is one of my companies also famous big Japanese company. One of the subsidiary who use to sell their product to parent company. Now, they are getting the pressure to sell their product by themselves. Without knowing how to do Marketing, how to sell, so on.
Tim: Which sounds like a wonderful time to be in the Marketing business.
Sunao: Yeah. Wonderful time, wonderful time.
Tim: Continuing this idea of how Marketing and Sales is changing. Do you see Japanese businesses buying more online as well?
Sunao: Yeah, they are. Actually, there are some companies who are doing great on B2B E-Commerce like Askul.
Tim: Sure. Office Supply.
Sunao: Office Supply. The other is Rakuten, Amazon is kind of too. Those are companies doing very great.
Tim: Okay, great. Let’s talk a bit about Content Creation and the Cloud CMO Platform. A Content Creation is another buzzword that means so many different things. What is Cloud CMO?
Sunao: Cloud CMO is actually CMS. You know create you a website where you can publish your Content. It has a built-in capability of Marketing Automation. You can analyze the visitors and also you can send out an e-mail.
Tim: The platform allows you to customize website content and e-mail content and also outsource the creation of that content?
Tim: Is Cloud CMO a stand alone platform, or is that something that customers usually use as part of an engagement with Innova?
Sunao: Right now we are doing another professional consulting.
Sunao: Because Market is still new and trying to understand how to create Content strategy and how to create Content, and how to measure these out? We have 10 Consultants basically which helps companies too,
Tim: The writers on Cloud CMO are creating e-mails obviously. Blog posts.
Tim: Facebook posts.
Tim: Instagram? Reviews?
Tim: What all, do they go and create like comments and blogs and things? What kind of content do they create?
Sunao: Mostly we create blog articles.
Sunao: The reason is you know blog article is most cost effective way to attract website visitors. A. We are always CEO friendly, right?
Sunao: Then second. We say it is much cheaper than creating video or infographics.
Sunao: Almost 90 percent of our business is product providing.
Sunao: Another 10 percent is Instagram. Instagram is getting attraction. Not doing any review writing or you know commenting. Because it is kind of for the company. They wanted to create good reviews or good comments. Which is not really good thing to do.
Tim: No, it is a gray area.
Sunao: Gray. Then we have some issue with call with status marketing, right.
Tim: Blog posts, Facebook, Social Media in general.
Sunao: Yeah. Mm-hmm.
Tim: Okay. Excellent. Actually, a different topic. Before starting Innova you worked at Rakuten.
Tim: I have noticed an awful lot of the current generation of start-up Founders have worked at Rakuten.
Tim: At one point or another.
Sunao: Oh yeah.
Tim: Why is that? Is there just an awful lot of people coming through Rakuten, or does that company somehow encourage entrepreneurship?
Sunao: Yeah. I think the former is the case. Rakuten is growing at a rapid pace. I joined Rakuten 2008. Which is the time they are hiring a bunch of ex-consultants.
Sunao: You know MBAs. I joined Rakuten and spent some time and Rakuten business was really interesting. Very challenging, very robust. It is a big corporation for me. Much better than the one at Fujitsu.
Tim: That’s work. I use to work at Fujitsu.
Tim: Yeah. My first job in Japan was at Fujitsu.
Sunao: Which part?
Tim: It was FDL, but that was back in 1988.
Tim: Fujitsu and Japan were very different that day.
Sunao: Right, right. Yeah, actually I was anyway. It is a great place to spend some time. It is like I don’t know. It is like a Google. Google is already too big.
Sunao: Then you have GMO. Another great part and all the great people. It’s not the place place where entrepreneurial people work.
Sunao: I think it is the same.
Tim: When you made that move from Rakuten to branching out on your own. Were your family and friends supportive of that or did they try to say no stay at Rakuten it is a great company, you have got a great future and everything?
Sunao: Yeah. You know they were supportive, but I took the gradual move, right. First, I didn’t my own company fresh after Rakuten. I moved to a smaller company. The number of people is about four.
Sunao: Then increased like 10. After spending one and a half years there. I could get 30 days of paid vacation. I told my wife that I might change my job, and I may take another position at a different company or I may start a company. Let me try this for 30 days with the paid holidays.
Tim: Okay. You started a company on your vacation.
Sunao: Right. Then you know I spent 30 days. Then still not making any money, but I did part-time working and I also helped out a lot of start-up events. My wife is wondering you know well my husband is spending some time and meeting a lot of people. Although 30 days is over may lead into even more and see how he can do. She gave me another 30 days.
Sunao: Then a friend, one of my ex-employees gave me some contractor positions that could be you know revenue. Half of my business is contractor, half of my time is doing the part time work.
Sunao: That was a good.
Tim: That is a great way to get started. I mean, so what made you focus on marketing?
Sunao: Yeah, that was interesting. Before I started my company. I created a credit card, which I can borrow $5 million Japanese Yen.
Sunao: Yeah. That was safe money for me. I spent almost one and a half years trying one idea and another and not really making any business yet. I was throwing some money around from the credit card.
Sunao: My credit card limit is kind of hitting the limit, and I was discussing with one of my friends what should I do? I spend one and a half years and then my credit card is –.
Tim: Almost at the max.
Sunao: Almost at the max. Then she told me that you are talking about Marketing all of the time and especially Content Marketing. Maybe you should be in Marketing. Why don’t you try that. I was thinking back. Her comment is actually a liberation for me. Because I was thinking Content Marketing as a way of customer acquisition for my business.
Sunao: Not thinking about helping people companies to do the Marketing with their companies.
Tim: It took someone else to kind point out to you that you like.
Sunao: Then another interesting coincidence is that I got my MBA in 2006. I was writing my long time thesis saying I want to help out the smaller companies.
Tim: Oh yeah.
Sunao: After graduation.
Sunao: Yeah. It was kind of deep inside my motivation.
Tim: What was the biggest challenge you faced in making that transition? Was it strictly financial?
Tim: Was it getting them to those first customers?
Sunao: Getting first and year I think. I spent another half of a year trying to find an Engineer. I could find CEO very easy.
Sunao: CTO was very difficult. Kujimoto-san. The guy you met.
Sunao: He had the same issue, and he decided to do the coding himself.
Tim: He learned to code. He was on the podcast a couple of months ago.
Sunao: Right, right. I tried to do the same, but luckily I met Sky and he is very unique Engineer. He really loves Marketing. You know he majored in Marketing in College. Then he got an MBA with Marketing. Although he is a full-time Engineer right.
Tim: Hmm, yeah. I think that does make sense. I mean finding the right team whether you are an Engineer or finding the right Sales and Marketing people or Sales and Marketing finding Technical Support. That is really critical.
What did you have to change about yourself when you moved from working at a big company to running your own start-up?
Sunao: Becoming myself. When I was working at Fujitsu, I was acting a role. I wanted to be the good employee.
Tim: You knew what was expected of you.
Sunao: Yeah. There was some stuff I wanted to say, or I want to try something. Usually I accept the way it is. Now, I want to change this or I want to create this. That’s the stuff where I can actually say and people love it. I am really enjoying it.
Sunao: I feel more fun.
Tim: I think most people once they make that jump and it is more fun. Well, that’s not fair. Because there is definitely some times it was not fun between then and there now.
Sunao: Sure, sure.
Tim: Earlier we were talking about how to encourage more younger Japanese to start companies.
Tim: If you could change one thing about Japanese society or your education or anything. If I gave you magic wand, and said you could change anything to make it better for Japanese start-ups what would you change?
Sunao: I would change the job market. I would terminate life-time employment.
Tim: Oh okay.
Sunao: I don’t know how.
Tim: It is slowly going away.
Sunao: Yeah. It is slowly going away. For me, job market is the biggest hurdle with Japanese companies for change. My last company was in Social Media Marketing.
Sunao: I met a lot of U.S. start-ups and a lot of business professionals who are in charge of Social Media. What I found out. This guy who use to work at Ford. He actually changed the position within 6 months to Citibank, right.
Sunao: Because he gets so much experience and so much insights at Ford. He moved to a position with better title or better compensation. With that companies are getting these talented people.
Tim: Do you think that the problem is so much that the Japanese companies don’t have access to the best people, or is the flip-side of that employees get that there is no motivation to really improve, to get a better job or both of these things?
Sunao: Yeah, yeah. There is two sides of the story. One, is you know no access to the best people, right. The other is lack of the motivation to try out the new stuff you know. If you get a better position at companies like Citi.
Sunao: You have an incentive to try out new Social Medial Marketing at Ford. You may hit the jackpot, and you may not. Anyway you need to try.
Tim: Yeah. It gives everyone incentive to be more innovative and take risks. That makes a whole lot of sense.
Tim: Excellent. I wanted to ask you before you were talking about inbound versus outbound marketing. Japan seems to have a very different view of outbound marketing and e-mail marketing than the U.S. does.
Tim: You cannot buy mailing lists in Japan.
Tim: Japanese consumers are much less tolerant of companies sending e-mail than American consumers are. How do you address that? How do you do an effective outbound marketing campaign when people are so sensitive to marketing e-mail?
Sunao: You cannot change consumers. Consumers are fixed.
Tim: They are the way they are.
Sunao: Yeah. You have to understand that preference. How they want to receive the information. Some people want to get information from e-mail. The others get a mailing. Others might want to visit stores.
Basically, what you can do is you know touring what information channel you use. When also customizing the content. If your information is customized then it is specific to persons need. Then you can get through to them.
Tim: If it feels more personal it is more acceptable.
Tim: The non-customizing e-mails are more likely to be rejected by Japanese consumers.
Tim: I see. You know, you have mentioned before that Japanese internet users don’t share content as often or as quickly as Americans do. Why do you think that is? How does that effect a content marketing strategy?
Sunao: This is an example. One of my friends is staying Myanmar. He said you should probably blog post there. You get 1,000 Likes a day.
Tim: Friendly country!
Sunao: In Japan, it’s not. You might get 5 Likes or 10 Likes. In Japan, if you are doing Content Marketing Strategy. A CEO is more important factor all right.
Sunao: Because you cannot get as much traffic from Social Channel. You need more traffic from Search Engine.
Tim: From Search Engines. Excellent. Well, listen I don’t know how I am ever going to edit this down to 30 minutes.
Tim: Before we wrap up is there anything you want to tell our listeners about content marketing or about sales marketing in Japan, or anything at all?
Sunao: Yeah. I am really passionate about content marketing because content marketing is the purpose of the internet. With the internet you can actually have no boundaries you know. You can do business with people in the U.S. or people in Europe. People in Africa.
For me, by leading people to do content marketing publishing information and letting people on the planet know that you are there. You are doing business like this. You get more of a chance to do business with everyone on the planet.
Tim: It’s truly global. It’s truly going global.
Sunao: Going global. The Apple iPhone is using the shiny, shiny case.
Tim: The shiny iPhone case?.
Sunao: Yeah, iPhone or iPod. This technology is from northern Japan. Small manufacturing facilities. Is so good enough to find out this small company, but if they have content marketing other companies know. Wow, this product is a very great. This is so smooth and so shiny.
Tim: It has become the opposite of the keiretsu.
Tim: Not only are you not relying on these very closely held associate companies, but now everybody has got this within their reach.
Sunao: Right, exactly. Yeah, that kind of the world I want to create you know.
Tim: Awesome. Excellent. Thanks so much for sitting down with me. I really appreciate it.
Sunao: Thank you, thank you. I enjoyed that.
We are back. I think Sunao is spot on when he talked about how both marketing is changing in Japan and the forces behind it.
As he explained, until very recently because of the tight corporate groups. Many companies weren’t really responsible for their own marketing and sales. Over the passed 20 years those corporate groups have been slowly dissolving and now the ties that bind them together are very weak and indeed.
Now, stories have established mid-sized companies who suddenly found themselves lost when they had to start taking responsibility for their own sales and marketing. Really drove the point home. I mean such a situation is almost inconceivable in the west.
His point about how lifetime employment is killing innovation in Japan is something I had never considered, but it makes a lot of sense. After all competition makes us all try harder. Where is all of this change leading?
Well, my own crystal ball is a little foggy. I can tell you it will be a change for the better. Marketing Automation and Content Marketing really levels the playing field for smaller innovative Japanese companies. That is one of the core requirements for Disrupting Japan.
If you have got a Marketing Automation story. Either a success story or a horror story we would love to hear it.
Come by DisruptingJapan.com/show027 and let us know what you think. When you drop by you will find all of the links and sites that Sunao and I talked about and much, much more in the Resources section of the post.
Most of all thanks for listening. Thank you for letting people interested in Japanese start-ups know about the show.
I am Tim Romero. Thanks for listening to Disrupting Japan.