| There’s an unspoken myth in
international trade that needs to be debunked forcefully and regularly. I do it every
couple of years or so and it’s about time I did it again.
The myth is that low price is the key factor in your
company’s products being competitive in the global marketplace. I’m here to tell
you that -- whether you’re and importer or an exporter – this is simply not
true. Now I’ll tell you why.
Buyers
Even domestic buyers know that low price often translates
into low quality. We’ve all heard that “you get what you pay for.”
As all my regular readers know, in international trade the
key factor in success is developing relationships with your partners. And that’s the
first factor that’s more important than low price in being competitive –
especially in the global marketplace.
When you’re working at a long distance, both parties
want to feel comfortable with a potential partner. When starting out this means responding
promptly to communication, providing all the information requested and doing it in a
friendly manner. Remember – when dealing across borders, attempts at humor are often
lost and may even unintentionally confuse or anger the other party.
Communications
If communicating in English, keep the language simple
without sports or culture metaphors that may be lost on your partner. Be friendly. Avoid
politics and always ask if there’s anything else you can do for them. When you do
this, you’re already way ahead of 90 per cent of the folks who call themselves
businesspeople.
If you already have a customer, you’re work isn’t
finished. Your partners and buyers want honesty in product quality, delivery times and
costs. Your partners simply want to be assured that you are reliable. They are unlikely to
jump to another partner simply because that person has a lower price. Dependability is
more important than low cost in this case.
Everybody wants the products they ordered delivered
yesterday. It’s only human nature. If you can provide short delivery times you will
be way ahead of the competition. Quick delivery can not only be more important than low
cost, it can actually make the shipment more valuable. Think about it. If you’re
shipping pears to Europe, you’re not going to trade off low cost against quick
delivery. Spoiled pears delivered at the lowest price are not going to make anyone happy.
Shipments
Here’s something else that will win the hearts of your
buyers but that many international traders ignore: keep customers informed of product of
shipment problems early on.
Too often, suppliers are afraid customers will be angry if
told there are problems. Believe me, it’s far worse to have promised quick delivery
and then tell your buyer weeks after the promised delivery date that the goods
haven’t left the factory yet. This makes your buyer distrust you and distrust never
leads to a happy relationship. It’s even worse if your customer has his own deadline
and you are unable to meet it. If that’s the case, you just have to bite the bullet
and provide an alternate source.
Another feature in your relationship that’s more
important than low price is your degree of knowledge and competence with regard to
product, shipping and service. Everyone likes to have that “warm feeling in their
tummy” that they’re being looked after. Follow up on your orders, make sure
everything is moving along as promised and be there after the sale is made.
Many new traders believe they can maximize potential
profits by dealing in everything. Wrong! When a potential buyer calls, he should be able
to reasonably expect you to be familiar with products and prices that you deal in.
That’s why it’s important to specialize. When a buyer calls, make sure your
price list is right by the phone. This will demonstrate you are competent and
knowledgeable. These two characteristics are at least as important as a low price.
Needs of your Customer
This next suggestion is really just another component of
developing a relationship but I’m highlighting it here because it deserves special
attention. Be sensitive to the needs of your customer. One of the things you’ll hear
a lot when you’ve been in business a while is that “my company is not like
everybody else in this business.” They’re probably right. No two businesses are
alike. But what they’re really saying is they want to be treated as something unique.
Your job is to make sure that you understand what they believe is special about their
company.
Bear in mind that it may not be special or unique at all
but this is clearly an area that your partner believes is important. If you can reassure
him in your communications that “we’ve taken special care in packing to minimize
vibration,” he will feel you are looking after him and he won’t give a fig about
jumping ship to some other trader who offers a lower price.
Copyright 2008 by Dennis Hessler |
