A thousand miles journey starts with a single step

Often assignments from foreign principals are very interesting. One gets the opportunity to experience differences in business cultures and business views.

In this case I was instructed to build a market presence in Western Europe. My principal was based in London. The semi-products originated from Eastern Europe. Logically these products were supposed to be marketed in Western Europe, especially into Germany.
The strategy used appeared not working successfully. Based on the principle of taking giant steps towards fast results, the entire production capacity was sold into traders. Although the capacity quickly was sold, later on the process stagnated. The end-users appeared to be reticent towards the volumes offered.  A prompt change in strategy followed. However the direct consumers approach didn’t show immediate success. Very little progress was made. As usual new entries were more than welcome to have influence on price levels, however these prospects mainly remained just prospects.

First sell small before big, so quote big before small
Commodity traders are used to think large volumes of standardised product, but the end-users have to deal with dozens of customers who do order minor volumes. Even more there with sufficient reliable suppliers, suppliers with reputations, western origins, bespoke product specifications, nobody was awaiting a new entrant.

The sales call at a German prospect was going well. The MD, Frenchman, replied on numerous questions I asked. He gave me essential details about purchase, planning. All quite important aspects but even more important I asked him a lot about his customers, what they wanted, how they ordered what he had to do for them, which products, what the implications of all these requirements were, how his co-workers dealt with it, which procedures and what that meant for his suppliers. I also asked what he personally thought was important.

At a given moment we discussed order sizes. I told him I really preferred minimum order sizes of 400 metric tons. I deliberately mentioned this quantity which corresponded with the former trader’s approach.  For the size of the customer, with 3 production locations, it was not even that huge. But nevertheless such an order, valued over 700.000 euros, was still something rather scary.
Then I proposed to supply one load of 20 tons against a premium price. Relieved by this proposal he accepted the deal.  But I insisted to be personally present at the (trial) production out of the material. Six months later the customer happily bought monthly volumes of 600 – 800 metric tons on quarterly agreements.

The aim was reached by offering the customer what he needed. Not by delivering what he required. What this client really needed was the trust from his operators in his choice of supply. My presence and attention at the trial production helped very well. Of course the test went OK. After the persuasion came the motivation to establish a good relationship. According to Lao Tzu:  ‘A thousand miles journey starts with a single step’.

Do you know what your customer requires or do you know what he really needs? Do know how you to help him? Is it the same as what you offer?

Klaas Meekma.

Latest columns


 
 
social-twitter   social-twitter

Contact information

  • Adres: 1a, Baakhoven
                  NL6114 RJ  Susteren
                  Netherlands
  • Tel:      +31 46 449 7346
  • Mob:    +31 6 2279 6617
  • Email:  This email address is being protected from spambots. You need JavaScript enabled to view it.
imonkeys seo webdesign li