Are you listening to what the customer needs?

9 09 2007

I have been involved in a series of meetings with business owners regarding problems in their companies. 

Declining sales and market share due to international competitors, inability to compete or a decline in the entire industry sector are some of the reasons mentioned.

Solutions that were discussed and debated including cutting costs of raw materials, increasing worker efficiency, lowering logistics costs, streamlining the administration and related costs, government intervention and protection, outsourcing and even forming alliances with the international competitors.

What struck me as incredibly odd was that not once were the customer’s needs mentioned.

Not once did anyone mention creating new ideas, products or services for the customer.

There was no discussion of investing in new technology because “things are difficult now”.

There was never a comparison made between the marketing and promotion, branding or image of the competitors versus the company’s marketing, promotion, branding and image.  Why not? 

Every comment or observation focused on lowering production and logistics costs to the customer, never on increasing the benefits to the customer.

All that mattered is “how can I sell at a lower price”.

That’s right.  The entire future of these companies, and in some cases entire industries are focused on how make their products for less.  How to beat the Chinese, Indonesia or Brazil or whatever developing country has access to cheaper raw materials or labor. 

Common sense tells us this is not a viable, long -term solution.

Each of these companies has stated in their publicity, website and in their mission statements that their focus is on the customer and on customer service.  Why aren’t the customer’s needs and future needs part of the search for solutions when sales are declining?

If the customer really truly cares only about price, your product is a commodity. 

If the customer only cares about price, they don’t care about your company’s service, advertising and promotion, attitude or participation in their business.

If you really think that the low price will guarantee the sale, cut out the customer or technical service.  Take away financing.  Take away delivery and logistics.  Forget environmental and worker protection.  Reduce your inventories.   Standardize your prices and order sizes.   Cut down on sales and promotion. 

Call me when your sales skyrocket and the money pours in. 

I suppose it’s normal when sales fall, to attack costs, and costs are a fundamental element in being competitive in certain goods and services.

It is not the only element.  It may not even be the most important one for your customer. 

It probably is the easiest area to change quickly, and requires no investment.  People like easy solutions that don’t require investment. 

The relationship with your customer, the ability to meet their needs with your product or service and allow them to make a profit is what makes business click.

How well do you know your customer? 

What problems are they facing?

Is your contribution to their product important, significant or fundamental in their success?

Do they see you as simply a supplier of a commodity or an integral part of their supply chain and future?

Have you explored how you can work with them to make them more competitive?

Once this has been accomplished, bring the results to the boardroom and start the discussion of how to aid declining sales and deteriorating margin.

Don’t stop with the easy solutions.

Look for the difficult solutions, the ones that require compromise and long-term commitment.

Look for solutions that require investment of resources; time, money, and ideas. 

These are the solutions that the competitor focused on cost is not interested in. 

These are the solutions that will provide confidence and mutual opportunities for growth.

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Using positive reinforcement to win customer loyalty

22 02 2007

We respond positively to positive feedback, recognition, and reinforcement of our behaviour and activities at work or home.

We get angry or lose interest in an activity, goal or organization if we don’t receive this “pat on the head” or “cheer-leading” on a continual basis.

Our customers also need reinforcement and recognition in order to maintain their motivation and good feelings toward your company or products.

What are you doing to make sure they get it?

Does the customer feel like you are just “going through the motions”?

Does it feel real?

Are you really showing that you care?

What sets you apart from your competitors AFTER the sale?

Related Links

27 Great Leadership and Management Ideas

The power of something extra

What defines an exceptional leader





Mexican politics – what business people should know

22 11 2006

In order to begin to understand Mexican politics (an impossible task), it’s important to learn some fundamentals of the political system in Mexico.

  • There is no re-election for political officials for the same post in Mexico. Current office holders can sit-out a term and run again for the same office, or they can run for another political post.
  • The political parties control the selection of party candidates who run for office, at Federal, State and local levels. Political parties, and their leaders are very important.
  • In order to be remain in politics one must please both the party and the electorate.
  • The term for the President of Mexico is for 6 years, with no re-election.
  • The term for State Governor is 6 years, with no re-election.
  • The term for Senators is 6 years, with no re-election for a consecutive term.
  • The term for the Camara de Diputados (similar to the House of Representatives in the US) is 3 years, with no re-election for a consecutive term.
  • The term for local mayor is 3 years with no re-election for a consecutive term.
  • The term for State representatives and local elected positions is normally 3 years, with no re-election for a consecutive term.
  • Changes in the Mayor, Governor or President, cause major reshuffling of bureaucrats and administrative officials. This causes a slowdown or “unofficial” shutdown of some government offices between the election date and the date of the new administration start-up.
  • The lack of re-election encourages and favors the current politicians and parties in power to seek out projects with short term visible benefits. They are pushed to show successes, infrastructure projects or other tangible benefits during their term of office in order to get promoted and elected to future political posts.
  • In the Mexican states with stable, well defined political party tendencies and majorities, there is more focus on medium and long term projects and planning as the benefits can be attributed to the party.
  • If selling a long term project to the government, it should include short term benefits, or tangible results, so that the politicians involved can claim credit.
  • Never try and initiate the sale or negotiation of a major project to the State government during the last 6 months or year of a Governors term. It will be stalled, and you will have to “resell” it to the new administration.
  • Get to know as many local and State and Federal political officials as possible, in 3 to 6 years they are all sitting in different positions of power and influence in the government.

Related Links

How to do business in Mexico, Politics and Political Parties

How to speed up business decisions in Mexico

Patience, chaos and doing business in Mexico

Official websites of the Mexican states

Best States for business in Mexico – World Bank Report 2007





Sourcing and supply chain strategy – Mexico

16 11 2006

Purchasing from Mexico and Mexican suppliers?

Don Gringo at Catemaco News and Commentary brought these items to our attention.

Sourcing in Mexico gets easier.  The article points out that doing business with Mexico is easier than in the past.

  • The proximity of Mexico to the US markets impacts communication, logistics, costs and time factors.
  • Mexico has a history of dealing with the US, and are familiar with competitive manufacturing techniques.
  • Relationships are critical to success.
  • Beware of stereotypes.
  • Take the time to find the “right” partner.
  • Do’s and don’ts for doing business in Mexico

Does your supply chain strategy include Mexico?  It should.  Al Brown president of SupplyMex writes that Mexico offers:

  • Logistics infrastructure, highways, rail and port system that has been improved over the past 10 years.
  • Free trade agreements with 42 countries.
  • Global production and quality standards.
  • Stable political and economic environment.
  • Skilled workforce.

Thanks Don.
Related Links

Purchasing.com

Why you should pay attention to free-trade treaties 

Maquiladoras in Mexico

Industrial and Business Parks in Mexico





How to speed up business decisions in Mexico

13 11 2006

When doing business in Mexico, one of the fundamental complaints I hear from non-Mexican business people is the speed at which business in transacted.

They say there are 5 speeds to the Mexican economy, I believe they also apply to negotiations in Mexico.

1. Slow.

2. Slower.

3. Stalled.

4. Going in reverse.

5. Dead.

It can be quite frustrating, but it is part of Mexican business culture.

There are several options available that may help speed up the decision-making process in Mexico.

  • Make certain you are both working for the same goal. Write it down, discuss it, and determine that everyone is seeking the same thing. There should not be any hidden agendas.
  • Set fixed and specific dates when the data or information must be available or the decision will be made. Get personal commitments from the other participants. Don’t settle for vague answers, get them to agree in public to bring the specific data or make the decision on a specific date. Personal, not institutional responsibility.
  • Does everyone have all the information required to make the decision? Write down what is missing and assign responsible parties and dates for completion.
  • Follow-up with phone calls and written communication and verify that everything is running on schedule. You will have to dedicate more time to “motivating” or “prodding” than you are used to in your own country.
  • Don’t get angry. If there is no decision it is because of a reason you don’t understand or hasn’t been verbalized. Anger is seen as threatening, and not part of a good relationship, it will hurt you more than help you.
  • Be patient. It always takes longer than you think it will.
  • Keep up the communications, in fact increase them. Contact all the team members involved, try and discuss the project or decision informally (outside of the office or work environment).
  • It might be the money. When everything looks perfect, and still no decision, it might be due to money (or lack of it). Try and discuss this privately with the head decision-maker.
  • It might be the risk or control involved. Bring the subject out in the open and discuss the risks and control issues involved for both sides. This is best done informally with the team members, one on one.
  • It might be NO. Mexicans do not like to say no or give bad news in certain situations. They believe it is impolite, and many times will not respond or will allow the situation to continue until it fades away without a “yes or no” decision being made.

Related Links

Patience Chaos and doing business in Mexico

Doing Business in Mexico – cultural tips

How to negotiate with Mexican business people

How to do business in Mexico





World Corruption Perception Index 2006 – Transparency International

7 11 2006

Interesting look at perceived corruption worldwide.

Transparency International has released their 2006 index of corruption perception on November 6, 2006.

Mexico lands at number 70 on the list, which puts it close to the middle of the pack out of a total of 163 countries.

Since 1995, Transparency International has published an annual Index of perception of corruption ordering the countries of the world according to “the degree to which corruption is perceived to exist among public officials and politicians“. The organization defines corruption as “the abuse of public office for private gain. ” – excerpt from Wikipedia Corruption Perception Index.

As this index is based on polls, the results are subjective and are less reliable for countries with fewer sources. Also, what is legally defined, or perceived, to be corruption differs between jurisdictions: a political donation legal in some jurisdiction may be illegal in another; a matter viewed as acceptable tipping in one country may be viewed as bribery in another. Thus the poll results must be understood quite specifically as measuring public perception rather than being an objective measure of corruption.

Statistics like this are necessarily imprecise; statistics from different years are not necessarily comparable.” – Wikipedia Corruption Perception Index.

Related Links

Internet Center for Corruption Research

Corruption Perception Index – 2006 (EXCEL)

Transparency International

Wikipedia





Use of business titles in Mexico – Doing Business in Mexico

3 11 2006

The use of business titles in Mexican business life is important.

Most people with professional degrees are addressed using their professional title. This is especially true in written communication. Failure to do so can be seen as lack of education and offensive.

Until you get to know a person, always use the professional title or full name, never address them by their first name until it is clear that they are comfortable with this.

You can ask how they wish to be addressed if unsure. It’s better to make a mistake on the side of formality.

Some titles are general, and when in doubt regarding the professional title, you should use these:

  • Joven – refers to any young man from birth to adolescent.
  • Señor (Sr.) – refers to any male older than an adolescent.
  • Don – a term of great respect used to recognize older males.
  • Señorita (Srta.) – refers to any unmarried female. Once a woman is above a certain age, she is referred to as Señora, even if unmarried.
  • Señora (Sra.) – refers to any married or widowed woman.
  • Doña – a term of great respect used to recognize older females.

Professional titles

  • Doctor (Dr.) masculine, or Doctora (Dra.) feminine – Refers to anyone with a PhD. or Medical Doctors degree.
  • Licenciado (Lic.) masculine, or Licenciada (Lic.) feminine – refers to anyone with a law degree (most common usage) or Bachelor’s Degree.
  • Contador Publico (C.P.) – refers to anyone with a public accounting degree.
  • Ingeniero (Ing.) – refers to someone with an engineering degree.
  • Arquitecto (Arq.) – Refers to anyone with an arquitectural degree.
  • Diputado (Dip.) masculine, or Diputada (Dip.) feminine – refers to a publicly elected official equivalent to Federal, State or Local representative in the USA.

Related Links

Doing Business in Mexico – Cultural Tips

Patience, Chaos and Doing Business in Mexico

How to do business in Mexico

Criticism – how to do business in Mexico

Meeting people in Mexico

How to negotiate with Mexican business people

How to call Mexico from the USA