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March/April 2003 INsight excerpts

Turning A Contact Into A Sale: Selling Overseas
Generic Industry Promotions: The Reverse Trade Mission
Director's Corner
Required Documentation: Branded Claims Reimbursement 
Quick Country Facts: Canada
Upcoming Events

May/June 2003 INsight excerpts

Turning a Contact Into A Sale: Selling Overseas

You’ve gone to the trade show and met the potential buyers. They seemed interested in your product, so why haven’t you heard from them? Many U.S. companies are discouraged when they discover that closing an international sale requires a great deal of persistence. However, by following the right steps, you can turn a contact into a productive long-term business relationship. The steps to international business success include knowing the market, building relationships, and keeping culture in mind.

The bond between U.S. companies and foreign trade partners starts before the initial contact. Before attending a trade show, research the market you will target. SUSTA Generic Program Director Tiffany Landry emphasizes that research is key for businesses trying to break into international markets. Investigate trends, demographic patterns and values within your target market to determine the demand for your product.

The Foreign Agriculture Service’s GAIN reports can aid with this type of research. The reports give the current business climate, market structure and trends, exporting outlook, and recommendations for success depending on local business customs. Visit www.fas.usda.gov/scriptsw/attacherep/default.asp for access to GAIN reports and other country data. Country Commercial Guides (www.state.gov/e/eb/rls/rpts/ccg) provide trade statistics, market conditions and economic trends, financial information, travel tips and other valuable information for doing business in foreign countries. Also, www.fas.usda.gov/scriptsw/bico/bico_frm.asp offers export statistics according to country or product.

Additional Internet Sources:

www.ers.usda.gov (includes agricultural research reports and trade data
www.cia.gov/cia/publications/factbook/ publications/factbook (useful for country information)
www.ita.doc.gov (trade analysis and statistics)
www.census.gov (go to “Foreign Trade” for codes and statistics; go to “International” for country data)
www.nmfs.noaa.gov (National Marine Fisheries Service for Aquaculture/Seafood Statistics)
www.tradeport.org (more country analysis and market research)
www.euromonitor.com (read press releases online or order data and reference products).

In addition to gathering market information it is important to build relationships for distributors and entities, such as banks. Sometimes U.S. companies do not gather enough background information about a foreign company and may later realize the product does not fit the market. Rather than getting discouraged, companies can contact their local Small Business Development Center or their state’s International Trade Office. These resources can help small businesses find out about foreign companies and figure out which questions to ask and what to look for in prospective distributors. To find your local Small Business Development Center, visit www.sba.gov/sbdc or www.asbdc-us.org.

Use the market research and the information you gather to develop a long term marketing plan. Evaluate your goals and growth potential. Look to market studies and export data for details on carrying out your plan. The SBA Guide to Exporting (www.sba.gov/oit/info/Guide-To-Exporting/index.html) contains worksheets for creating an international business plan. SUSTA’s “Basics of Exporting” handbook (www.susta.org/export) also has helpful hints.

Also, consult a local international banker about payment options available for international sales. Open accounts can be risky, according to Landry. Other possibilities include advance payment, letters of credit, documentary collections or drafts, or consignment. (SUSTA’s “Basics of Exporting” covers these topics.) Talk to your banker to decide what is best for your company.

Breck Myers of the Alabama International Trade Center advises companies to figure in freight costs when giving buyers price quotes. Clients like to know total cost ahead of time. “I would say that it is very important to address the foreign buyers’ financing needs and share some of the risk,” he says. “International firms are better at offering different payment options. This is a dark area for many U.S. businesspeople, who are more comfortable with wire transfer and letters of credit payments. I’m not saying do consignment in a foreign country, but be flexible and look into your options.”

Companies should also investigate the contract laws in each country to ensure agreements are not signed prematurely. Some international laws are strict about allowing parties to get out of a signed contract. Find a legal advisor that is comfortable dealing with international trade.

Attending trade shows is important, but following up with the contacts is crucial. Pursuing potential buyers is often necessary to establish a bond. Reply quickly when clients contact you, and contact those who don’t respond before you give up on them. They may later decide they are interested in your products or see you at another trade show; it helps to stay in touch.

The time frame for an international sale is longer than for domestic sales, requiring more relationship building and some patience. Follow-up sales from a trade show or trade mission can take six months to a year or longer. To follow through with potential buyers after making contact at a trade show, set up appointments for the next few days. Spend some additional time in countries you visit to follow up on leads.

After the initial sale, follow up with buyers to ensure that the content, delivery and packing of your shipment were satisfactory. “You can lose a sale with a late delivery or inferior product,” says Myers. “I think that the lowest quote will get you in the door, but you have to be able to deliver.” Reinforce the client’s trust by answering questions that arise and providing customer service.

When aiming for international business success, remember the importance of cultural consideration. Myers stresses the importance of being proactive. He says that some foreign companies may be more comfortable receiving an introductory letter or fax than receiving an introductory telephone call. However, after making the initial contact, it is important to stay in touch. According to Myers, successful companies send out e-mails or call to tell clients when they will be at an event, or they set up appointments to meet while in a foreign country. “Face-to-face meetings are much more important [than in the U.S.],” says Myers, who suggests taking notes to remember a contact.

Myers recommends that companies pay attention to cultural differences when doing business abroad. “Knowing a foreign language and trying to use it comes across well. Having an appreciation for other cultures helps to clear up the ‘ugly American’ stereotype,” he says. A company should research business norms and customs before traveling. Business practices differ greatly, and acceptable behavior varies from country to country. “A Basic Guide to Exporting” (www.unzco.com/basicguide/index.html) provides some cultural factors of which business travelers should be aware, such as promptness:  “Romanians, Japanese and Germans are very punctual, whereas people in many of the Latin countries have a more relaxed attitude toward time.” By reading travel guides and searching websites like www.exporthotline.com/index.html, you can learn more about business protocol throughout the world.

Keep in mind that your foreign clients should be treated with the same respect and attention as your domestic buyers. “One of the biggest complaints by foreign buyers is that their business is not appreciated,” says Myers. “They often feel that U.S. companies do not address their concerns, say, as much as they would a domestic buyer. Catering and even pampering goes a long way to solidifying a business relationship.”

The next time you find yourself wondering why you have not heard from the foreign buyer who was so interested in your products at a trade show or a SUSTA Trade Mission, ask yourself if you did market research, built a relationship with the buyer, and learned about the buyer’s culture. Practicing these elements do not guarantee a sale, but they may bring a company one step closer to making a deal with a foreign buyer.

– Article by Mary Beth Wesdock

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Generic Industry Promotions: The Reverse Trade Miss