Cultural Dimensions

Some aspects of culture that you should be mindful of include:

• Communication styles (e.g., direct or indirect, candid or diplomatic)
• Values, social norms
• Importance of respect
• Ethical boundaries
• Norms about hierarchy
• Motivators (e.g., money, recognition, or association with a bigger vision)
• Trust and its impact on decision making
• Time to closure—quick or a long process
• Importance of your offer versus your approach

Different cultures place varying degrees of importance on each of these dimensions, which impacts their decision-making process. In general, cultures in emerging-market countries place a greater value on relationship building—on getting to know them as individuals through socializing and nonbusiness-related activities.

Trust

Trust also is accorded a high level of importance in many emerging-market countries, and while this is a relevant factor in Western cultures as well, product positioning may hold greater weight in the purchase decision process in the West than in emerging-market countries. Conversely, emerging-market customers may be more apt to overlook product shortcomings in favor of satisfaction with the trust and social dimensions.

The trade-offs a customer will make in the spirit of trust are often surprising. At the end of the day, business is done based on relationships and the personal comfort level of decision makers with the sellers. In emerging markets, the importance of trust in a supplier company rings ever so true. And oftentimes this trust can be relayed to the political realm and may be based on whether your originating country has positive relations with the host country of the customer.

As I mentioned briefly in Chapter 11, I experienced this firsthand when a delegation of ministers from an African country visited our headquarters in the United States. Over dinner I sat with one of the primary decision makers and asked him why the ministers had decided to go with our Chinese competitor instead of us, despite our superior offer. He looked me in the eyes and said that they trusted them more than they did us—that the Chinese knew how to build a relationship and foster a collaborative spirit. I couldn't get more truth than that. Despite being a successful multinational with high brand equity, we failed at fostering a close relationship based on the customer's expectations. We did not adequately invest in the relationship—or at least not to the same extent that our emerging competitor did.

And yet Western companies have been known to exercise good trust behaviors with their more familiar, developed customer bases. One such example of building trust with customers still resonates in my memory over a decade later.

When the Internet bubble burst around 2001, many of Cisco's customers were affected financially and couldn't meet their payment obligations. Instead of giving them a hard time about making their payments on time or as soon as possible, the CEO of Cisco, John Chambers, granted them considerable leeway. He knew that the downturn was a temporary dip and that the economy would rise again, and he wanted to demonstrate loyalty and commitment to his customers who were suffering. He knew that standing by them when times were tough meant they would return the loyalty when times were better again. And it paid off. That is customer intimacy, building long-term relationships and paying attention to the people side of business. And if we stand by customers in emerging markets as they grow into stronger economies, we will enjoy the payoffs from the trust that builds.

Some aspects to consider in customer profiling include:

• Culture/nationality
• Personality type
• Preferred communication mode
• Language preferences
• Influence in the organization—direct and indirect
• Knowledge level
• Needs—explicit and implicit
• Gender
• Generation

Ultimately you need to determine what is truly important to emerging-market customers and to always keep in mind what's in it for them. Salespeople need to understand how they should approach a prospect in emerging markets versus how they might be accustomed to dealing with customers from their own region or culture. Adapting your approach to your customer's style, to their culture, and to their expectations will amplify and accelerate your success, particularly since culture and trust are such strong factors in many emerging-market countries.

Influence at All Organizational Levels

Western companies are, at times, very narrowly focused when they are positioning and pitching their products or offers, particularly in the technology industry. The account manager goes out with a sales engineer, proud of her product's technical advantages, and she targets a technical counterpart on the customer side who is equally excited about the technological aspects of the offer. This person may be an influencer in the decision-making process but is often not the final decider. As a result there is shock and disappointment on the side of the selling team when it is not chosen, even though team members thought it was a sure win.

The final decision maker could be someone in finance. Or maybe that person is higher up, at the executive level. Sometimes the best product is sacrificed for a better price, which is another good reason to be in a favorable position with the financial decision maker in the organization—because that person may not be sold based simply on the feature merits of your product.

The decision may ultimately come down to the financial framework of the offer. If the numbers work out nicely in favor of the customer, and he also gets the preferred brand or better product (often the Western offer), that is a double win for the emerging-market customer.

The key is to work the deal from all angles and at all levels of an organization. Do not assume that you know who the decision maker is—there are often others behind the scenes that are quiet influencers and decision makers. And these dynamics are even more intricate and pronounced in emerging markets, where politics play a significant role.

The following list provides some recommendations for improving your chances of closing a deal, particularly with emerging-market customers:

• Do your homework.
• Scope out all parties in the organization who might be involved along the way.
• Establish relationships with involved individuals early in the sales process.
• Recruit your senior management to help you in the relationship building and influencing process with their peers at the customer site.
• Know that many cultures, particularly those in developing countries, appreciate hierarchy, as it can lend much credence.

Profile each of the different individuals in different functions and at different levels. Identify what they want to know about, what they want to hear, and how they want to receive these messages. For example, the finance person who may be responsible for signing off on the payment for your product will likely appreciate hearing messaging around total cost of ownership, revenue-generating possibilities of your product and the time frame for achieving those possibilities, and the cost/savings business case.

For technical decision makers, take a helpful approach and objectively advise your customers during their evaluation process on what to look for with respect to your competitors' tactics (e.g., testing tricks). It makes their job easier and builds trust with you.

Matching the messaging with the recipient is of key importance. Know what kind of information she wants to hear and ensure your communication is in line. Cookie cutter pitches are not enough.

Eliminate the likelihood of getting no for an answer by ensuring that you are talking to all the different people who can bring you a yes.

Go Outside the Organization

As touched upon earlier, at certain times it may behoove you to build relationships not only within the customer's company but also in the political domain, where there are higher influences at play. Relationships at the governmental level may be key to your success, particularly in emerging markets—although this can be a factor in developed countries too. Governments—whether at the regional, state, or national levels—have bigger-picture interests and will often influence purchase decisions at companies.

Get to know the local government representatives and understand their influence, power, and reach. The network they are connected to and trade agreements they may be involved with could impact the contract or business that you are working on. Regular contact with governmental representatives or officials can help you to gain insight into upcoming opportunities or to be considered favorably when your business contract is under consideration. Corporate executives should regularly visit customers and government officials in each of the regions, particularly for your strategic accounts or in target countries.

As an example of the importance of relationship building in the political realm, a sales representative in an emerging-market African country communicated the following request to our program office:

I would like to confirm that the main area of support currently needed is at the level of policy maker. We would like the consistent support at the minister and public sector level. Lobbying at that level must be a consistent all year-round activity specifically in Emerging Africa.

Be Flexible and Adapt

In many customers' eyes, emerging entrants appear to be trying harder than Western suppliers. New entrants appear to be more receptive to the way business is done in some geographies, whereas Western companies can appear to be too tied to the Western business model that values closing the deal quickly. U.S. companies in particular can appear to be too much of a supplier and not enough of a partner; that is, they can be perceived as not being as interested in knowing the customer, not as responsive to the customer's needs, and having an attitude of “We are just here to sell you what we have.”

Be Nice

At times it can be something as simple as offering gestures of kindness and consideration that go a long way. Taking a partnership approach, walking customers through the process, and making sure they know that you are there for them may be enough to make them choose you.

More Than “Free Fries”—Crispy Too? Going Above and Beyond

What may come easily to you may be something of great value to your customer. Take inventory of what your customers need and want and what you can give them—and then identify what else you can do to demonstrate your appreciation for their business. Share your best practices with customers when it is also relevant to their businesses. Going above and beyond also involves making engagements more personal, with higher intimacy.

Articulate All That You Bring to the Table

There are often intangibles or factors that are less apparent that are sometimes overlooked but may have significant impact. Particularly when you are doing business abroad, far from headquarters, your customers may not see or know about the corporate backing and support you have, knowledge that may contribute to customer engagement. They may not be aware of your brand equity, customer references, support expertise, and track record. Pointing out the subtle, less obvious value you bring (even if it is assurance that your company will still be in existence a few years down the road) may provide advantages when compared to the shinier bells and whistles (such as fancy gifts, trips, and excess support resources) your competitor may be offering.

Always Deliver, Do Not Overcommit

Because underdog suppliers are often trying very hard to make inroads, they may overpromise and underdeliver. Your differentiator can be ensuring that you deliver what you say you will, and on time. Reliability, trust, and confidence are a big deal. Your customers and prospects have been burned before. They may be skeptical of your promises. If you want to make a lasting impression and win for the long run, it is in your best interest to make sure you can deliver what you promise. That alone might solidify your position going forward.

Invest and Commit beyond the Signing of the Purchase Order

A little bit of time up front goes a long way.

If there is only one thing that Western companies should be willing to change as it relates to building effective customer relationships, it should be their view on the length of time a relationship is expected to last. In other words, the West needs to take a longer-term view of a customer relationship. It is not just about getting the purchase order signed, then disappearing until you think your customers are due for renewals or upgrades.

Engaging with suppliers who come in and try out their markets for a short time and then disappear has often left companies in emerging markets disappointed. Many times, as mentioned previously, the supplier's intention has been to recycle mature products that have peaked in developed markets. Suppliers will try to sell old technology to emerging-market customers who are presumed to be less savvy or advanced in terms of adoption and without the need for all the latest versions of a particular product.

And it is assumed that emerging markets will settle for less—that emerging-market customers will think that it's better to have something than nothing. However, the implementation considerations for a special market are sometimes overlooked. Western companies sometimes dump and run. Thus, emerging-market customers feel they have been cheated. Their money is taken, and at times the product is neither functional nor entirely appropriate to their needs.

This results in emerging-market customers being wary of suppliers from abroad.

If you are serious about an emerging market, and you have labeled a specific company as a strategic account, you may want to demonstrate your commitment and dedication to this relationship by somehow investing in the company's local economy or in the customer's particular situation. This also builds a positive reputation and brings leverage to you when you deal with customers in neighboring developing countries.

Investment can be in the form of manufacturing plants with jobs for the locals or investing in local development goals, if you have a large enough budget. This investment also sends a message out to your entire customer base and shareholders that you are a global company, and you plan to be around for some time. Longevity is comforting for any customer looking to invest in your solution.

The following are some ways to apply a long-term approach to customer relationships:

• Build by target.Develop a competitive, cost-appropriate portfolio for specific geographies and markets.
• Innovate.Develop new features, products, technologies, functions, and standards tailored to new markets by leveraging your company's capabilities and brand.
• Buy to expand.To fill in the gaps in your existing product portfolio, make targeted acquisitions while the economy and valuations are down.
• Partner and build relationships.Consider partnering with your competitor.
• Leverage.Partner with common competitors of your primary competitor to offer a stronger combined solution.
• Rethink and consider the long-term view.Change your time frame for account and/or country investment and profitability profiles, from one that focuses on quarter-by-quarter, to one based on a three to five year horizon.

Example

An opportunity for thinking creatively, investing for the longer term, and taking a partnership approach comes in the form of a project to combine physical infrastructure build-outs with a telecommunications network build-out.

Here are the specifics: There are plans to rebuild quite a few high-voltage (HV) lines in Africa. The idea is to deliver more hydropower, especially from the Congo. The interesting opportunity is that HV electric lines now include fiber for internal grid-control purposes, which creates a natural opportunity to use them for telecommunications or networking as well.

Part of making the creative partnering idea happen is to look at projects by development organizations who help finance infrastructure build-outs. Consider partnering with one of them or bidding so that your project gets paid for.

If you are successful, you will sell your solution, the cost may be financed by a third party, you will be entrenched with the local government through the infrastructure build-out, and you will demonstrate longevity and investment in the country's socioeconomic development goals.

Embrace a Long-Term Approach and Philosophy within Your Organization

The other long-term investment consideration you need to make is internally, within your organization. As we have discussed, a requirement for success for U.S./Western companies is evolving short-term thinking geared at demonstrating results and financial success to stakeholders. Evolving this into the mind-set of investing for the future often means no or low returns and more capital outlay, even if it is only in terms of people power (time), in the short term. Alleviating the pressure on your sales force for weekly, monthly, or quarterly deal closure allows the time required to build long-term relationships with strategic customers that have been identified in new segments, such as emerging markets.

Understand How Sales Compensation and Customer Intimacy Are Related

In the Western sales compensation model, salespeople usually only focus on those customers and opportunities that have the potential for short-term revenue recognition. Compensation drives behavior, and not rewarding the sales force for long-term business development or relationship building often means that neither happens—or at least not to the degree that it should to meet emerging market needs. In customers' eyes, Western suppliers only seem to be around when there is an active project on the table. They do not appear to be as interested in the customer nor are they perceived as being as creative as the competition.

The resulting impact is that emerging competitors are winning on the customer intimacy front, because they do compensate and reward sales teams based on longer-term business development objectives. Customers perceive emerging suppliers to be genuinely interested in their business; these suppliers present themselves as partners versus just suppliers.