Economic Crisis for Those Who Don’t Know How to Sell
“Depressions, recessions, don’t matter. There’s $15 trillion in the (US) economy. You’re allowed a piece of it.” - James Altucher
“What does not destroy me, makes me stronger.” - Friedrich Nietzsche
Do you think it is the right attitude to place blame on the global financial crisis for your company’s bad export performance? Think again.
It is sure that global financial crisis that started in U.S. in September 2008 had tremendous negative effects on entire world economy and it still does. However, some countries have managed the crisis better than others. It is the same thing for companies.
I would like to share with you my experience in a small size company on export strategy in the period of economic crisis.
Starting from Nothing
Not long after the financial crisis had emerged in 2008, I started to provide export marketing services to a small manufacturer company located in Istanbul, Turkey. The factory had been serving almost only for a few big buyers; one was from Russia, one from Ukraine and one from Kazakhstan. As the crisis hit these economies severely, these buyers couldn’t place orders with satisfying quantities as they did before. So, as a direct result, manufacturing activity almost came to a standstill.
Exploring Prospective Markets
CIS (The Commonwealth of Independent States) is pretty huge and flourishing market. But, obviously, it was not wise to insist that we should sell only to these markets which entirely collapsed during that time. The first thing to do was to change the company’s conventional target market definition. It was like changing a bad habit. Therefore, it was not an easy task.
So I directed my energy and sources to search new potential markets for our products. Luckily, I didn’t need to go far away. I realized that our price and quality were meeting the expectations of customers in many Balkan countries like Romania, Serbia, Croatia, Bosnia, and Hungary. Poland that managed the crisis very well was also another good market for us. Additionally, in Balkans, we didn’t face strong competition with low prices of our Chinese competitors as we did in Russia.
Diversifying Customer Base
In the process, we established cooperation with numerous buyers from diverse countries. It provided us an awareness of all different expectations and tastes. Consequently, we understood the need to diversify our product range and rethink on our product quality and how to improve it.
Defining True Value of Small Buyers
This time we didn’t put all of our eggs in one basket. Instead of a few big customers, we had now numerous small customers. Risk was minimized.
If you have already big buyers, it is certainly a good thing. However, big buyers always tend to kill you by closing the deal for very low prices. Moreover, you have to accept the terms they bring to you. The worst part is that you fall into zero point when they cease to work with you, especially if you don’t have a fair contract.
To me, small is good. I always like to work with small buyers. I treat them well and they treat me back like I am king. I didn’t have any difficulty to negotiate with them on price and terms.
Another good thing to deal with small buyers is that it helps you develop your communication skills and further understanding of the market dynamics.
I know that operation cost will be a little bit higher when you work with small buyers, but it’s worth it.
Here are some rules I concluded:
- If you are a SME, you should focus probably on a few target markets. That’s right. We have restricted sources. However, always try to save time and energy to explore other markets as well.
- Keep sensitivity to the needs of customers from diverse cultures and countries. It will improve your view of product quality and doing business.
- Dependence on a few big buyers can kill your business.
- Never neglect or underestimate the importance of small buyers. They can bring life to your business.
- Consider crisis as an opportunity to develop and go beyond your boundaries.