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Finding Cross-Border Customers

The purpose of a business is to get and keep a customer. Without customers, no amount of engineering wizardry, clever financing, or operations expertise can keep a company going.

—Theodore Levitt, a late marketing professor at the Harvard Business School1

Finding customers for your export product and services can be accomplished through a range of programs, largely government sponsored, including trade shows, trade missions, and related trade-networking services. I’ll introduce a number of these services to you and explain how you can take advantage of them. I’ll also revisit how to use social media and networking to attract potential customers worldwide.

This section is one of my favorites because, as Levitt says, you can’t keep a company going without customers, and most books on international trade never provide a specific course of action on how to find them. I’ve been in your shoes and know the struggles that come with starting an export venture, so use me as a resource to help you get started. Get out your customer compass (sounds like a great new product idea!), and let’s go. I want this part to be fresh, fun, relevant, and accessible to everyone everywhere.

Define Your Cross-Border Customers

As we discussed in Chapter 12, the goal of the export research you did is to help you select a likely market for your products, envision your end user, and refine your product or marketing strategy, if need be. This usually involves learning the demographics of your targeted consumer in the country you are about to enter and considering how to reach them in the most efficient manner.

image Caution  By now, you better know what is important to a consumer when she makes a purchasing decision related to your product or service, because if you don’t (and if Theodore Levitt were alive today, he would most likely agree), your best intention will not satisfy, nor woo, the extremely selective, busy, and value-conscious visitors to your online properties.

Learning about consumer trends is another means of helping you to determine where your product belongs and predict how successful it will be. Another goal of your research has been to assemble information about your first tier of customers—in other words, the intermediaries or end users who will actually purchase your product. Regardless of whether you are selling direct or indirect, your customers will tend to fall into one of six categories, which I will get to later.

However you move your product, it’s important to be aware of how many intermediaries will be involved in getting your product or service to your consumers. Each one will add his markup to the price of your product in order to earn his due profit. You need to take this into consideration when you price your product, so that it won’t end up being excessively expensive by the time it actually hits store shelves or arrives at a consumer’s door. The most attractive import won’t be able to compete with local products if it costs more than a consumer is willing to pay.

image Caution  When you set up an e-commerce shop (look back at Chapter 8), you must decide what type of customers your transactions will primarily involve: business to business (B-to-B), business to consumer (B-to-C), consumer to consumer (C-to-C), or business to government (B-to-G). If your target customer is B-to-B, the analysis in this chapter applies because B-to-B describes commerce transactions between two businesses, such as between a manufacturer and a retailer, a manufacturer and an overseas agent, or a manufacturer and a distributor. It also works with a B-to-C target.

There are six different categories of customers I will talk about in this chapter: the distributor or importing wholesaler, the overseas agent or representative, the overseas retailer, the overseas end user, the trading company, and the e-commerce customer (your Everyday Joe who might buy a single belt, for instance, at your e-commerce site for himself).

Let’s start first with the large-volume customer.

Distributor or Importing Wholesaler

A distributor buys products from you (the seller or exporter in this case) in large volumes, and then warehouses, distributes, and resells them to its customers. It also takes care of after-sales service. It is the most common first-tier buyer you will find and can offer the most efficient and profitable way to get your product to the consumer.

image Note  Don’t get too bogged down with titles and terminology. They vary from country to country. In Japan, for example, distributors are referred to as wholesalers.

When evaluating prospective distributors, look for the following critical characteristics:

  1. They trade in the geographic areas where you want to sell your product.
  2. They have experience in importing, selling, marketing, and promoting your type of product.
  3. They have distribution channels in place that will reach your targeted consumer.
  4. They distribute products that are similar to yours but are noncompeting.
  5. They are large enough in size to accomplish the desired results.
  6. They have the financial strength to meet the demands of your business over the long haul.
  7. They have a substantial number of sales outlets and a record sales performance.
  8. They have facilities to warehouse your products.
  9. They have a reputation in the marketplace for scrupulous honesty, reliability, and regular customer service.
  10. They deliver the kind of after-sales follow-through you’ll be proud to have associated with your product.
  11. They understand local culture, know how to negotiate the ins and outs of government regulations, and might even have helpful political connections.

After you find a distributor or two that match this criteria, I recommend that you meet with each one—preferably in person, or via Skype if you are conserving expenses—and decide which one comes closest to sharing your views on market penetration.

You will be establishing an important and long-term relationship, ideally, and that means you should find out everything you can about them well before you structure any contract. When you interview them, use the following list of questions as a guide:

  1. How long have you been in business?
  2. Can you share a few success stories about similar yet noncompeting products you have sold?
  3. Have you represented other foreign companies? Explain what you did.
  4. How long has your relationship lasted with the top three companies you represent?
  5. How will our line fit in or complement your existing portfolio of products?
  6. What’s your game plan for building our brand in your country?
  7. Do you have good market coverage, including a trained and educated sales force?
  8. What specific territory, customer type, or product range are you interested in covering (either exclusively or nonexclusively)?
  9. Can you deliver on pre-agreed sales targets?
  10. Where do you see our brand in three, five, and ten years?

image Tip  Conducting serious due diligence on a distributor who intends to buy a large volume from you consistently over the course of years can spare you from headaches later on. You don’t want to doubt your partner throughout the relationship. The relationship should be fluid, trusting, adventurous, and growth oriented.

In the case of exclusivity, as referred to in number eight, Dan Harris, an expert on Chinese law and the publisher of the China Law Blog, says this: “If you grant an exclusive, you should be sure to set sales quotas and performance targets [as noted in number nine] that will allow you to terminate the contract if not met.” He goes on to say, “Setting adequately high minimum sales quotas will protect you from getting stuck with an under-performing or non-performing distributor. Clearly defining the sales quotas and performance targets is essential. The typical provision mandates a certain minimum dollar value of sales or a minimum number of units sold. Failure for a distributor to meet the minimum for a certain period might result in termination or, alternatively, it might just lead to it losing exclusivity.”

Harris also cautions, “If you are going to sell your product into a new international market (whether through a distributor or otherwise), you absolutely must register your trademark in the country before doing so and you absolutely must register that trademark in your name, not that of your distributor.” Control over intellectual property rights is important!

He finishes with, “A good distribution contract makes clear what happens upon termination because doing so greatly improves your chances of smoothly transitioning to a new distributor. Is your distributor allowed to sell down its remaining inventory of your product or must it cease sales immediately? Are you required to buy back the inventory and, if so, at what price? You want to put in your contract that the distributor must inform you of any pending and future sales. Lastly, where will your disputes with your distributor be resolved, and by whom?”2

Prequalifying Distributors

Once you have found a distributor, how do you prequalify it beyond your interview process to ensure that it is a reputable organization? These helpful resources will give you some tips:

  1. Country Riskline Report: (http://www.dnb.com/risk-management/international-risk/14909183-1.html). A Dun & Bradstreet (D & B) service that provides an in-depth analysis of political, commercial, and economic risk covering of doing business in a single country.
  2. The Million Dollar Database: (MDDI; http://www.mergentmddi.com). Also put out by D & B, this database provides a flexible gateway to a database of 1.6 million international business records from outside the U.S. and Canada.
  3. USEmbassy.gov: Websites of U.S. Embassies, Consulates, and Diplomatic Missions: (http://www.usembassy.gov). This Web site provides a list of US embassies in other countries. Contact the one in the country in which you hope to do business and run your prospective customer’s name by the people there, just in case they know anything. You’ll be surprised at how willing they will be to help.
  4. International Business Credit Reports from Experian.com: (http://www.experian.com/b2bglobal). Experian provides global information on a wide range of businesses from more than 225 countries. The suite offering consists of three products: the United Kingdom Risk Report, the European Company Report, and the International Developed Report. Pricing varies based on the complexity of the inquiry and the country.
  5. ICP: (http://www.icpcredit.com/). International Com­pany Profile provides international credit-status reports, company profiles, and business information on companies all over the world, especially in the emerging markets. Pricing varies based on the region and delivery time but generally starts around US $75.

Once you have qualified several prospective distributors and found a good one that can carry out your export action plan, you’re ready to discuss an export business contract. Consult with your international attorney to set up a contractual agreement that establishes terms of mutual cooperation and assures you of an exclusive market, product type, or customer type for a specified period of time with defined sales performance targets. Commit to a minimum of one year so that you have time to see how well you and the distributor work together. You should also monitor sales performance closely during this time. If sales are satisfactory and both parties are agreeable, you can extend the agreement as often and as long as you wish. As Harris says, clearly defining the sales quotas and performance targets is essential because failure of the distributor to meet the minimum for a certain period might result in termination, which could later become your way out if the relationship is not working.

Overseas Agent or Representative (Importer)

An overseas agent works on a commission basis (ranging from 2.5 to 15 percent) to locate buyers for your product, which is considered indirect exporting (more in Chapter 17). It involves selling to an intermediary, who in turn, arranges the sale of your products either directly to customers or to importing wholesalers. Once a buyer is found, however, customer service and all transaction logistics, including setting up payment and arranging transportation, become your responsibility. The agent oversees your work, stays in close contact with the customer, and will step in to assist on behalf of either party if needed. The advantage of this type of working relationship is that you have a fair degree of control over price and who your customers are.

Since overseas agents, sometimes considered foreign country brokers, typically have a vast knowledge of a target market along with solid relationships with customers, they can easily identify and exploit opportunities for your enterprise—from tracking demographic trends, to announcing radical customer shifts, to identifying emerging hot new products in any given country. The trick to working effectively with agents or reps is to stay in close contact by e-mail, telephone, or Skype and set expectations in writing right at the outset.

To find agents, work with the US Commercial Service, check online sourcing platforms such as Alibaba (http://www.alibaba.com) and Global Sources (http://www.globalsources.com), inquire with the international trade team at your bank for recommendations, reach out to industry trade-show executives who have access to the exhibitors and buyers who attend, and conduct a search via the Internet—by typing in “Sales agent, UK, pet supplies,” for example. Many of the ways to find an overseas agent are similar to those that I will look at in Chapter 17 in my discussion of export management companies (EMCs).

image Note  Using a company’s own sales force will exert the most international control, but often for small businesses it is at a cost that is not affordable. Using overseas agents, representatives, and distributors is a prudent stepping-stone for testing the market and learning whether your product and services can be sold successfully first through someone who knows the market better than you do.

Overseas Retailer

You can also sell your products directly to overseas retailers, such as department stores, supermarkets, or mail-order houses on either an exclusive or nonexclusive basis. However, retailers are generally small in size, service only a regional location, and have limited warehouse space. This means that their purchases are usually small and they can only give your product limited geographic distribution. Larger retailers like Costco, Walmart, and Sears have the capability to import directly but rarely do because of the challenges it presents (local culture and tastes vary from country to country), so you will still need to appoint a local agent or distributor to service the local on-demand needs of the small and big firms alike.

Alternatively, small businesses with ties to major domestic retailers (Toys “R” Us, Costco, and Target, for example) may also be able to use them to sell abroad. Many large American retailers maintain local buying offices and use these offices to sell abroad when practical.

Overseas End User

You can also sell your products directly to certain types of end users, such as hospitals, universities, or original equipment manufacturers. They, in turn, may resell your products to their customers or incorporate them into their own manufacturing processes.

Buyers can be identified at trade shows, through international-trade publications, or through your local US Export Assistance Center (http://export.gov/eac/). When you sell directly to an overseas end user, you are responsible for shipping, collecting payment, and after-sales service unless other arrangements are made.

Through e-commerce, you can also sell directly to anyone, anywhere in the world through a B-to-C transaction, as discussed in Chapter 8.

Trading Company

As I note in the next chapter, you can sell your products directly through a trading company, which resells them to its customers. Trading companies such as Jardines (Hong Kong) and Mitsui & Co. (Japan) have long histories as import intermediaries in the development of international trade between countries. They are virtually identical to export management companies (EMCs), but they tend to function on a more demand-driven basis; that is, the demand of the market compels them to buy specific commodities. Trading companies usually have long-standing customers for whom they source products on a regular basis and these customers can be located not just in one country but all over the world. Nowadays, some people refer to trading companies as global B-to-B traders that specialize in one commodity and in one market with strong logistics capabilities. (An example would be eTransWorld [http://www.lexecongroup.com/etransworld.php].)

Trading companies, better known in Japan as sogo shosha companies, are useful for establishing contacts or making introductions for you, but they are rarely qualified to do extensive marketing of your product. This is because they tend to be huge, loosely structured organizations that lack both the appropriate investment funds and the focused commitment to bring a product to market. Their efforts show very little continuity, which means poor repeat business. If you use a trading company and it develops some business for you, consider meeting the customers it finds in person, taking responsibility for the sales, and doing the marketing and distribution yourself. It could be a great way to lay the groundwork for future direct sales.

image Note  Many large trading companies maintain buying offices in the United States and use these offices to sell abroad when practical.

e-Commerce

The proliferation of smart phones, tablets, and other portable devices is driving the growth of e-commerce. More and more companies are using this method of distribution and marketing for selling and, as a result, more and more individuals are buying via e-commerce. Technically, e-commerce is a form of direct selling. However, due to the unique issues associated with this form of commerce and distribution, it needs to be placed in a direct-method distribution class of its own. Sales of e-commerce are those to the second type of customer I mentioned earlier, your Everyday Joes.

E-commerce happens on three primary types of sites:

  1. Transactional site: This type of site is one where people buy directly (Apple, Coach, and Sunglass Hut, for example).
  2. Information site: Here, people visit a site but are led to buy elsewhere (e.g., eBay, Amazon)
  3. E-Marketplace: On this type of site, people browse thousands of products, shop, and buy online (Zazzle and Etsy, for example).

Now that you know who your customers are, let’s talk about how you’re going to meet them.

Making Customer Contacts—Composing Your Inquiry

When a large-volume customer, such as an overseas wholesaler, contacts you or you contact him either by snail mail or over the Internet, always respond promptly and completely. Include the following materials and information:

  1. A cover letter: It should establish your credentials as a reliable and reputable supplier in the industry. I always suggest e-mailing a scanned, signed copy of the letter and then sending the original via airmail, especially if you have attractive letterhead and marketing materials. (If snail mailing, attach your business card.)
  2. Product specification and pricing sheets: These should provide enough information for the customer to make an intelligent decision as to whether or not he wants to continue communicating with you. Your letter to the customer might look like this:

    Dear [Name of Customer]:

    Thank you for your interest in our _______________ product line. We have enclosed product catalogs and special export pricing for your review. Additional information can be found at our Web site called _______________, located at _______________, on our Facebook page at _______________, on our LinkedIn page at _______________, and on our Google+ page at _______________. You can visit us on Twitter, too: ______________________.

    Our company was established in 1974 and has been serving customers worldwide with quality products since then. We have the manufacturing capacity to keep up with demand. In addition, we only require a fourteen-day lead time to produce any quantity you might wish to order.

    We look forward to your reply and the opportunity to do business with you.

    Sincerely,

    [Your Name]

Your goals here are very basic: to identify yourself, to reference the inquiry, to provide the information requested, to establish yourself as a solid, reputable institution, and to respectfully express your interest in entering into a relationship with the company. A lot of this information might already be featured on your Web site, but when it comes to specifically tailored information, such as pricing, it’s best to respond directly and with a personal touch.

I’ve already discussed a number of sources from which you are likely to obtain lists of likely customers in the course of your market research. Start e-mailing inquiries to the customers on your lists and keep adding new names. Meanwhile, the following are some high-powered services and activities that can put you directly in touch with people who are actively seeking products like yours.

Next, I’ll cover some valuable US Department of Commerce’s International Trade Administration programs that help companies succeed in export markets around the world.

Gold Key Matching Service

Start with the most useful program: the Gold Key Matching Service (http://export.gov/salesandmarketing/eg_main_018195.asp), a US Commercial Service.

For a small company with a reasonable budget, the Gold Key Matching Service (GKMS)—which is run by the US Department of Commerce, US Commercial Service—is one of the most efficient ways to meet with prescreened potential cross-border business associates, whether you are seeking an agent, distributor, or joint-venture partner. The service arranges individual meetings, most taking place at the US embassy in the host country. Many companies say that this is a wise investment because you pay only for your airfare, lodging, and entertainment and have a series of productive meetings already set up.

Many businesses could benefit from learning more about the GKMS. Every year, the US Commercial Service helps thousands of national companies navigate the challenges of exporting goods and services worth billions of dollars. Located in 109 cities across the United States and in US embassies and consulates in more than seventy-five other countries, its global network of trade professionals opens doors that no one else can. First and foremost, it can connect US companies with international buyers worldwide. After all, isn’t that what you are after: finding customers the world over?

The GKMS will also help you with:

  • Creating custom market reports and industry briefings to target the best trade prospects and opportunities with the help of trade specialists
  • Conducting market research that pertains to a specific country and examines cultural issues, analyzes market potential and size, and includes market-entry strategies for your product or service offering
  • Performing due diligence on foreign competitors
  • Setting up appointments with prospective trading partners in key industry sectors
  • Conducting effective debriefings with trade specialists and assisting in developing appropriate follow-up strategies
  • Booking international travel, accommodations, interpreter service, and clerical support
  • Arranging participation in trade shows sponsored by state and federal agencies

image Tip  If you are operating on a shoestring budget and cannot afford to travel internationally, the GKMS also offers a video service whereby you can receive all the same benefits but you meet your potential business partners via videoconferencing instead of in person. Inquire.

Gold Key Service in India

Let’s say you are interested in visiting India with the intention of eventually doing business there. (In 2012, the United States saw exports of nearly $42 billion to India, an almost 8 percent increase over 2011.3) First, you would need to brush up on India (to do this, you could go to http://export.gov/india/doingbusinessinindia/index.asp) and then review the “Frequently Asked Questions” and look at “I am an American company and want to export to India. Where do I start?” (http://export.gov/india/frequentlyansweredquestions/index.asp). Next, you would get in touch with the Gold Key Service for India (http://export.gov/india/servicesforu.s.companies/goldkeyservice/index.asp), which will assist you in identifying attractive opportunities tailored to your business and arrange appointments with prescreened key players in the Indian market.

The service can help you set up appointments with your choice of agents and distributors; importing wholesalers in your industry; key governmental officials; service experts (e.g., bankers, consultants, and lawyers); potential Indian partners’ trade associations; joint venture specialists; and major end users. It’s up to you and what your business needs are. GKS makes it easy to enter the market and does most of the work, if not all, at a modest fee.

Fees vary depending on company size and the scope of service, but for standardized services they typically are as follows (the prices are as of 2013): $700 for a small- to medium-sized company; $350 for small- to medium-sized new-to-export companies that are using the service for the first time; and $2,300 for a large company.

Other Helpful US Government-Sponsored Programs

The Gold Key Matching Service isn’t the only useful program. Here are some of the others.

The US Export Assistance Centers

The US Export Assistance Centers (EAC; http://www.sba.gov/content/us-export-assistance-centers) are staffed by professionals from the Small Business Administration (SBA), the US Department of Commerce, the US Export-Import Bank, and other public and private organizations. They can provide the help you need to find reputable distributors to compete in today’s global marketplace.

Trade Leads Database

The Trade Leads Database (TLD; http://export.gov/tradeleads/index.asp) contains prescreened, time-sensitive leads and government tenders gathered through US Commercial Service offices around the world. You can search leads and receive notification when new leads are posted.

Platinum Key Service

The Platinum Key Service (PKS; http://export.gov/salesandmarketing/eg_main_018196.asp) allows US companies to take advantage of longer-term, sustained, and customized US Commercial Service assistance on a range of issues. The service can include a range of issues including but not limited to identifying markets, launching products, and developing major project opportunities. Ongoing service is available for six months, one year, or a specified time frame based on the mutually agreed upon scope of work.

International Buyer Program

The International Buyer Program (IBP; http://export.gov/ibp/) recruits thousands of qualified foreign buyers, sales representatives, and business partners to US trade shows each year, giving exhibitors an excellent opportunity to expand business globally.

International Partner Search

International Partner Search (IPS; http://export.gov/salesandmarketing/eg_main_018197.asp) will put its trade specialists, located in more than eighty countries, to work finding you the most suitable strategic partners. All you do is provide marketing material and company background information, and IPS does the work!

Business Intelligence Companies

No matter what business you are in, you will benefit tremendously from studying your competitors and working to lure their customers by offering better products or services. The following business intelligence companies offer searchable trade databases, covering international trade activities throughout the world, for a fee. They are a fantastic source of tracking what companies are exporting and to where.

As you review these sites, you must know what to look for. For example, if you want to export refurbished computers, study your competitors to find out: Are they growing? Do they have websites, blogs and other social media platforms? Do they make the news? Are they global? This doesn’t mean copying every move they make. It means analyzing what your competitors are doing and then understanding why they are doing it so that you can tap into lucrative opportunities just as they are—but with a better, stronger, or new-and-improved version.

Find out where all their exports are going. You can either steal away business from them by exporting to the same location, provided you have a competitive advantage or a better value proposition (vastly improved quality, design, or price on a refurbished computer, for instance), or you can predict where they might go next and enter that market before they do. (Tread carefully here because you are on your own, carving out a new unproven market—can you do it profitably?)

If you duplicate a competitor’s strategy, tweak it to accommodate your strengths and then execute it better. And don’t forget to utilize the transparency of social media and social networking. See what people are saying about your competition. If there is a thread of discontent, capitalize on it with a new product or differentiate an existing product in the market where the competitor is weak. Two critical key points: Find out what works, and do it better. Find out what doesn’t work, and avoid it. A few good sites to review your competitors and their strategies are the following:

  • PIERS: ( http://www.piers.com). Whether you need to conduct market research, generate sales leads, or find buyers, PIERS is a comprehensive source of US waterborne import and export trade data online.
  • Datamyne: (http://www.datamyne.com). This site provides real-time data about US exporters and export movement.
  • Import Genius: (http://www.importgenius.com). This site provides real-time data on containers that enter the United States.
  • Journal of Commerce: (http://www.joc.com). The JOC provides trade data and offers everything from a listing of the top hundred US exporters (including the top ten states exporting to China) to import/export trade leads and international trade news.

image Tip  Revisit Chapter 12, because all the market research resources I list there can also help you find customers—from the Small Business Administration, to world trade centers, to American embassies. All you need to remember is to ask: “Help me put together a list of potential customers for _________________ (fill in your product or service offering).”

Other Ways to Snag Customers Worldwide

You can do all the social networking in the world to find potential international buyers for your product or service offering, but one surefire way to corral people to one central location in person is to exhibit at a trade show. You can do this either locally or internationally.

Domestic (Local) Trade Shows

A good first step and a low-cost way to generate international sales—for both the large volume customer and Everyday Joe—is to exhibit at a domestic trade show in your industry that offers an “international buyer” exhibit area. This will allow you to keep your transportation expenses to and from the show low. If the show’s local, you can even drive to it and sleep at your own home each night.

It may sound counterintuitive to make international sales without leaving the country, but the fact is that international buyers are attracted to large trade shows in the United States. And let’s not forget the draw of Las Vegas, Chicago, Miami, and other big trade show venues.

For example, many years ago, I exhibited at the International Home & Housewares Show in Chicago, where I am based, to tap into its international buyer audience and number of global member benefits. Afterward, I was able to use the directory in order to prospect customers.

After you generate national interest and sales success, you can think about exhibiting overseas at a show that brings in worldwide buyers in your industry. From there on, and as discussed in Chapter 10, others in your industry will expect to see you there every year as long as you’re in business. If you exhibit once and then disappear, they’ll think you gave up on the market or went out of business.

For a listing of domestic trade shows, many of which will be within driving distance of your city, visit the ExpoPromoter Web site at http://www.tradeshowsusa.com/.

International Trade Shows

When you decide to exhibit internationally at a trade show, you incur transportation, food, hotel, and exhibition-related expenses. Yet those additional costs are often more than offset by the potential of finding customers on the ground from all over the world.

Many big international trade shows offer a US Pavilion, where the actual cost of the exhibit is subsidized by our government, offering a substantial discount from the regular exhibit rate (inquire with your state’s US Export Assistance Center). The pavilions are strictly for the American exhibitors. Market experts from the US Embassy are typically on hand at the show to help national firms makes connections and further establish themselves in a new market.

For a listing of international trade shows, try these sites (but also conduct a web search on your industry—automotive, technology, or food, for example—to find out when and where the next overseas trade show will take place):

image Tip  The US Commercial Service has what is called a trade fair certification program. It is a cooperative arrangement between private-sector trade show organizers and the US government for the purpose of organizing a US pavilion. The goal is to increase US exports and expand national participation in overseas trade shows.

Government-Sponsored Trade Mission

Trade missions serve US firms that want to explore and pursue export opportunities by meeting directly with potential clients in their respective markets. They typically offer one-to-one meetings, networking events, site visits, briefings, and media coverage.

Certified Trade Missions (CTM; http://export.gov/ctm/index.asp) are overseas events that are planned and organized by private- and public-sector export-oriented groups outside of the US Department of Commerce. They are designed for new and experienced exporters to establish sales and set up representation abroad at a low cost. CTMs typically bring representatives of US companies into contact with potential agents, distributors, joint venture partners, licensees, local businesses, and government contacts.

Binational Societies, Councils, and Trade Associations

As I discussed in Chapter 12, it is important to search the Internet for local binational groups that will put you in touch with customers in the country where you’d like to do business. The National Association of Japan-America Societies (http://www.us-japan.org/), the US-China Business Council (https://www.uschina.org/),  and the US-India Business Council (http://www.usibc.com/), for example, all promote bilateral trade between the United States and their respective countries and also provide a stimulating social forum for people with common interests. In addition, they can help with prospecting for export customers. You just need to ask.

Check with your state to see if it has an export promotion agency, or a foreign relations or export council. Organizations like these usually assemble at least once a month and offer a forum for discussion about how to better facilitate international relations, expand trade, and acquire new customers.

Contacts made through business colleagues and associations can often prove invaluable to exporters. Find someone who is successfully exporting and doesn’t compete with you, and buy her lunch and pick her brain. Many states offer associations—such as The International Trade Association of Greater Chicago (http://www.itagc.org/), Monterey Bay International Trade Association (http://www.mbita.org/) and Miami Valley International Trade Association (http://www.mvita.org/)SPI_AMP#x2014;that focus strictly on promoting world trade. Check with your local chamber of commerce to see which of these associations have chapters in your area and sit in on a meeting—then sign up.

All of these are ways to scout for new, promising customers in export markets and each can be a valuable source of knowledge.

Tap Local Clients for Their International Reach

One of the easiest ways to quickly enter a new foreign market is to partner or form an alliance with a company (it could be a client—Brother International, IBM, or American Express, for example) who is more powerful than you and is already conducting like-minded yet noncompeting business in that market. Before you consider this avenue, I caution you to consult with tax and legal advisors to learn what type of partnership you should form, if you form one at all, what compliance issues need to be addressed, and whether or not you will be required to file tax returns in the host country. Please note that not all partnerships need to be formalized. Sometimes a trusting relationship and a handshake is all it takes to get started.

Most companies decide to partner because they sense that there is great synergy between two specific companies—a mutual need and a desire to share risk in achieving a common objective. I’ll go into more detail about partnerships and alliances in Chapter 17 when I discuss methods of exporting, but for now I’ll just say that partnering can open doors to new markets by enabling the acquisition of export customers at a faster rate. Inquire with your global clients. Ask for an introduction to the individual who heads up the in-country office. Take it one country at a time.

CASE EXAMPLE: PARTNER WITH A DOMESTIC CLIENT THAT HAS A GLOBAL PRESENCE

When I first started exporting foodstuff, I contacted one of the largest Japanese trading companies in the world: Mitsui & Co. The company had a local office in Chicago and did a significant amount of exporting to Japan. I approached the company about piggybacking my products with those it carried. Since I had the suppliers and the company had the established distribution channels and customer base, it was a good match. By combining my company’s gourmet food items with Mitsui’s beef products, we were able to provide extra value to customers throughout Japan. We went on to export container loads of product every month for many years. That experience taught me the importance of partnering in growing a business internationally—especially for small businesses!

Find Customers Through Advertising

If you’ve done a good job of marketing your business by implementing a variety of tactics over a long period of time and have placed a strong emphasis on organic search engine marketing, the world will find you. If that’s working, you should not have to spend money on public relations or advertising—a far more costly way to market your business. However, if those Everyday Joe customers are not beating down your online door, here are a few options for profitably acquiring customers through advertising. Note that these are merely a sampling of what’s available.

  • Search engine ads: Focus on search engine marketing by purchasing ads on search engines. All companies have the possibility of using the same tactic. Thus, you are competing against everyone else who wants to spend money on advertising to get customers. For service providers, try Google AdWords, Microsoft adCenter, and Yahoo Search Ads.
  • Affiliate and performance-based marketing: If you have a product or service that others want to promote, get your constituency base involved by asking them and explaining how you can reward them with each visitor or customer they bring to you through their efforts. This can be affordable, scalable, and controllable. For affiliate programs, try Commission Juncture, Google Affiliate Network, and LinkShare.

image Caution  No amount of money spent on advertising will make up for a poor customer experience.

  • Retargeting: This process works by keeping track of people who visit your site and then retargeting your ads to them as they visit other sites. This advertising only works for sites that already have traffic, so if you already have visitors and want to leverage and increase traffic, give it a try.

    Here’s how it works: Let’s say an individual visits your site to buy a special Irish bracelet. She stays for a bit and then leaves to look elsewhere on the web for a similarly styled bracelet at a better price or better quality. When that person shops other sites on the web for Irish bracelets, your retargeted ad will appear on their screen showing the Irish bracelet with a special discounted offer. If this sounds a bit complicated, work with a vendor to provide you with a marketing solution that fits your needs. For retargeting providers, try Criteo, Fetchback, AdRoll, and MediaForge.

  • Display ads: This type of ad allows you to target a specific demographic, extend your reach, and build your brand. It can be a video, banner, wallpaper, company logo, or other similar graphic. For display ad providers, try Google AdWords, Burst Media, AOL, and Yahoo.

image Tip  Many social media and networking platforms have targeted advertising programs in place to help you acquire new customers for your business. Facebook claims you can reach more than 1 billion people with its targeted advertising and will help you choose the right ones. LinkedIn offers targeted self-service ads as well, where you can pay by clicks or impressions and control your ad campaign from beginning to end. Inquire.

Summary

Finding customers for your export product and services can be easily accomplished through a wide variety of methods, including but not limited to social media and networking best practices, government-sponsored programs, trade shows, trade missions, and related trade-networking services. You can even advertise to acquire customers. But it’s not simply one tactic that will bring export customers to your door. It’s several different things in combination, and each part must be done exceptionally well.

As a result of your diligence, you will get customers. Now, we’re on to the easy part—determining your best export-sales strategy. How will you serve your customers?

1 Theodore Levitt, The Marketing Imagination (New York: Free Press, 1983).

2 Dan Harris, publisher of the China Law Blog, www.chinalawblog.com; used with permission.

3 “Doing Business in India—the Second Fastest Growing Market in Asia,” export.gov, last modified June 10, 2013, http://export.gov/india/doingbusinessinindia/index.asp#P10_896.

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