Successfully selling products in a foreign country requires a personal touch, so pack your suitcase
TORONTO—Forging partnerships and making deals in foreign markets is tough, doing it without face time is often impossible.
Mitchell Osak is the managing director of Strategic Advisory Services at Grant Thornton. Visiting foreign markets with clients is what he does, and he knows first-hand how important is to be there, in the flesh.
“There is no substitute for hands-on personal experience of the senior leadership of an organization visiting their target market. You can’t get a sense of the market unless you see it and smell it and taste it,” Osak said.
You can learn a lot about the way business is done in a country on the internet, but there are subtleties that can only be truly understood by experiencing them first hand. It’s one thing to have a trade expert tell you that business deals in Japan are based on personal trust. It’s another thing entirely to see that reality in your interactions with real people.
Peter Biro is the CEO of Newcon Optik, a Canadian firm that sells laser and optical equipment to the world’s militaries. He also emphasizes the need to visit potential and existing clients.
“The ability to succeed and the credibility you build, you have to eyeball people, you have to shake hands,” Biro said.
Biro says meeting clients in person can provide them with a solid understanding of and comfort level with your products.
Carl Pilon, a 19-year veteran of the Trade Commissioners Service, says that visiting your market isn’t always necessary, but it helps.
“In some cases, it’s a lot more critical than in others (to visit your market). There are countries where the information flows freely, where the business environment is very transparent, where it’s very similar to Canada. In this case, it might be easier to do business remotely,” Pilon said.
Pilon continued, “There are other cases where there’s a market that’s very different from Canada, where business decisions are based on a personal relationship, and a visit would be a lot more important. I would argue though, that any in-market visit is very useful if it’s planned right.”
When business decisions are based on personal relationships, you can’t make meaningful connections by sending an email or making a phone call. You need to pack your suitcase and get out there.
While heading into the great blue yonder is encouraged, it’s also wise to do some prep work before you leave.
“Showing up sight unseen without any context of history or culture is a dangerous thing. You become vulnerable to first impressions,” Osak said.
He continued, “It’s one thing to know on an abstract level what a country is like, it’s another thing to understand their history, how they perceive foreigners and foreign brands, and what social mores these people rely on that dictate business etiquette.”
Not understanding cultural differences can be costly. The way you shake hands, hand out business cards, engage with junior members of a sales team, or even the way you eat can make you look foolish or rude in the eyes of potential partners.
Studying a country’s history, cultural attitudes and perception of brands is base-level homework, but you also need to understand your market.
“Sometimes companies who export have no clue who they’re selling to and how they’re using their products,” said Osak.
Take some time to find out how people in your chosen market learn about products, how they consume products and what their purchasing patterns are.
It’s also crucial to know what makes up the economic ecosystem in your chosen country. You need to know the suppliers in that market, shippers and logistics partners, as well as your competitors.
Research—market, cultural and otherwise—should take up a significant chunk of pre-visit prep-time, but mapping out a rock-solid itinerary is a task that also demands attention.
When scheduling in-market visits, you want to meet with as many potential partners or costumers as possible. This may seem obvious, but Osak asserts that the number of people you speak with is just as important as the quality of those contacts.
It’s also prudent to know whom else you can meet with if your original plans fall through.
“People who have agreed to meet with you suddenly don’t show up. This happens not infrequently that meetings with important people get canceled the day of,” Biro said.
Planning alternative meetings might seem extraneous, but if you don’t have something else to do in the event of a cancelation, you may find yourself sightseeing.
Timing Your Visit: Trade Shows
A productive itinerary can go a long way, but the timing of your visit is another crucially important consideration.
If there is a religious or national holiday happening in the middle of your visit, you may want to reconsider. Aim for a travel date with no or minimal interruptions. If the people you want to meet with only have limited availability, pushing your trip back or moving it forward may be more efficient.
While it’s true that fruitful business contacts can be made year round, to truly make the most out of your visit, plan around a big event.
Centering your visit around a trade show is a great way to make contacts—especially if you’re new to a market.
“You can meet with key decision makers, you can meet with all the large companies, you can gauge the competition. Just getting a feel for what’s going on in the market is very useful, especially for consumer goods,” Pilon said.
Pilon’s colleague at the Trade Commissioners Service, Duane McMullen, director of General Operations, calls trade shows “target-rich environments”.
“You’ll see a ton of customers, not just from that market, but it could be customers from all over the world. Then your challenge becomes how to take advantage,” McMullen said.
Make contact with potential leads, set up meetings and side trips, make a list of companies you want to approach and establish concrete goals, all before you leave home.
“You don’t just get a booth and show up to a trade show. If you’re doing that, you’re wasting your money,” Biro said.
According to Biro, a trade show can cost $10 to $20,000. That’s a lot of money to spend if things don’t well.
Whether you attend a trade show or plan a week filled with meetings, these visits can feel like a tornado of activity and leave first-time exporters exhausted. It may be tempting to gear down when you finally get home after a hectic trip abroad, but there is still a lot of work to do.
Now is the time is to follow up with the contacts you’ve made.
“You’ve got to keep the relationship warm, particularly on an opportunity that is brewing. You’ve got to keep yourself at the top of their mind. You’ve got to manage relationships,” Biro said.
Osak agrees with Biro, but cautions exporters to think carefully about the way they follow up.
In some countries, tenacity is rewarded. Aggressively pursuing business through repeated phone calls and emails can work. However, in many cultures, this approach can be annoying.
When it comes to markets where the approach is more hands-off, it becomes a delicate balancing act. You don’t want to come off as pushy or disrespectful, but, at the same time, you need to keep the process moving.
According to Osak, perfecting this balancing act requires extensive experience, and you may not get it right on your first try.
After grinding through a grueling overseas visit and diligently following up with prospective clients, you will no doubt expect something to show for your efforts. But you might come up empty-handed.
Everyone wants to come home from an in-market visit with business in their back pocket, but realistic expectations are important.
Depending on the degree of difficulty for market penetration, the level of competition, the complexity of the regulatory systems or the differences in culture, wining business in a foreign market can be incredibly difficult, and it may not happen on a first try.
“Usually, the meaningful opportunities take a considerable period of time to cultivate, months or years. If you’re in the exporting business, you can’t be in it for the short term. You’ve got to have the resources to be in it for the long haul,” Biro said.
If breaking into foreign markets was easy, every Canadian business would do it. Instead, it requires patience, persistence and a certain level of intestinal fortitude.