When the economy slows down we feel pressure to put on the brakes. Limit costs, limit traveling and spend less on marketing activities.
Now is the ideal time to do a couple of things.
- Improve your relationship with existing customers and increase market share as your competitors reduce their marketing efforts.
- Expand your market.
After your own staff, the most valuable assets you have are your clients. It takes 10-50 times more effort to create new customers than it does to keep the ones you have. You don’t want to lose even one in the downturn. Make sure you keep in continuous contact with them. Ask them how you can improve your business with them. Treat your business as a partnership with your clients.
With focused effort and good planning, you can attract new customers and enter new markets. If you have not already started, now is the time to gear up.
By spreading your risks over more clients and more markets, you are less vulnerable to what is happening with your existing clients and your domestic market.
It takes anywhere from 18 to 70 months of activity to enter a new market (before a good return on investment) depending on the market and your product lines.
Some key points to consider:
- Select the markets and key clients you want to attract.
- If you want to harvest you have to plant the seeds. It is an investment in the future.
- Remember that the marginal cost to increase the production and sales is very small but the profit can be huge.
- Remember too, that this is not an investment for next year, but for the next 10-20 years.
Which markets and clients should I aim for?
Naturally, you look for those with growth potential. Also look for other customer groups.
Perhaps your main customers are in the automotive field, and so is your competition. Nobody is really looking into the manufacturing sector. Perhaps you should. There is less competition and most likely less sensitivity to pricing. As “nobody” is after them, they may be more receptive to new suppliers.
Perhaps 90% of your sales are to the domestic market. What export markets would provide a fast result?
Where should I go?
Go to markets that are in the same technical cycle as your domestic market for products or those who are just entering that stage.
Geographic distance is not that important. What’s more important, if you are a newcomer to the export business, is selecting a country that is “mentally” close to you, i.e. you do business in the same way. So if you are a Swede or a Dane look at Norway. If you are German, look at Austria or Switzerland, and if Italian look at Spain and Portugal; also look at the Latin American market, where they are very close in their way of thinking.
If you are American, your first step should not be Japan or China. The way they do business and their culture is completely opposite and it will take you a long time to get results.
How to get advice?
It is always good to take advice from people who know and have experience in international business. Please make sure you get advice about the specific country you want to enter. It is low cost insurance to minimize your mistakes and create results much faster. Read our book “Export & Import – Winning in the Global Marketplace” ISBN 978-0-9681148-1-0
So start your engines, tackle new clients and markets, but do your homework first. Remember, your time and effort invested now will sow the seeds for a future harvest.
Export Pro Inc. www.exportpro.com