Sales Rep Hired Gun - PowerPoint

							Selling to Asian OEMs


      Ed Benjamin
             Why Asian OEMs?
Most LEV manufacturing is now done in Asia due to
   several factors:
1. The large markets for electric bikes in China, Japan,
   and soon India have created economies of scale on
   all component parts and production.
2. Low wages combined with good technical skills in
   vehicle assembly, electrical components, batteries
   and motors expertise.
3. Excellent manufacturing infrastructure, and
   process is available.
4. Most components are made in Asia.
5. Most Western LEV product is made in Asia.
    Opportunities at Asian OEMs
Production of LEVs in China in 2008 should
  exceed 22 million pieces.
China, SE Asia, South Asia, Japan, and the Island
  nations NEED Light Electric Vehicles.
China is the “factory floor” for this type product
  for the world.
Asian companies are, often, very professional
  and interested in long term win / win
  relationships.
 Challenges in Working With Asian
               OEMs.
• Communications often a problem, for language, time of day,
  and cultural reasons.
• Business practices are different. Assumptions are usually
  wrong. Cultural issues are sources of trouble – often.
• Fraud and near fraudulent practices are common.
• IP is at risk, copies are rampant.
• Quality issues are normal. Perception of quality is different
  between cultures.
• There is no practical resort to legal recourse.
• Easy to create a poor relationship, or to have a good
  relationship deteriorate.
• Sales approach must be different!
                   How to…
Identify an appropriate customer, develop a
  relationship that will result in an opportunity
  to sell inside a profitable relationship.

Here is some insight…
   Identify Potential Customers in
            Several Ways…
What Markets can you serve especially well?
What companies serve those markets?
Who are the bosses of those companies and
 what are their needs and priorities?
Who are the designers and product managers at
 those companies?
Where and how is the competition affecting
 your list of potential customers?
  Boil the List Down to Individuals
         You Need to Meet
Once you have a list of the people you need to
  meet….
You need an introduction…
Introductions are not a simple matter.
In many Asian cultures, to introduce someone is
  to also take some responsibility for that
  person’s actions, honesty, etc.
        How to Get Introduced
• Work your existing relationships, or hire
  someone with existing relationships to work
  your way into your list. Usually, you know
  someone who knows someone who can
  introduce you (if they choose to do so).
• Be famous, give speeches, go to many events.
  You will meet many people.
• Cold calling does not, usually, work. At all.
           Send Important People
• It is normal to hear an Asian say he wants to know the boss of
  a supplier before he will do business. The real boss, not the
  hired gun or the salesman.
• Hired staff change jobs, salesmen and sales mangers have
  limited authority.
• If the relationship will be truly big and successful, then a
  decades long relationship will be needed between the real
  bosses of both companies.
• This is not easy for busy bosses on different continents. Nor is
  it happy news for sales teams. But it is reality to the Asians.
• A VP who is long term, and does have the authority, and is a
  significant share holder can substitute.
Friendship and Mutual Self Interest are
    More Powerful Than Contracts!
• Create a relationship where you both benefit
  from each other’s success.
• Become and be friends.
• Help each other, really, and on several levels.
  (Help his kids get into a US University, host his
  relatives when they visit Las Vegas, etc.)
• The difficult times are the true test of the
  relationship, and the time when it is most
  important.
 Making Friends in Another Culture is
             Not Simple
• Everyone that wishes you to give them money, or
  help them make money will assure you that they are
  your friend.
• Just getting drunk together does not mean that you
  are friends.
• Trust must be developed. And tested, and shown to
  be real.
• A good fight, successfully resolved, is a good test of
  the relationship. But keep them few and seldom.
  Be Prepared – “I’ll get back to you
   on that” can be end of chance.
Some points to consider:

1.      Does the product fit the legal requirements of your target customer?
2.      What will be required to make it fit? (or to homologate it?)
3.      Does this product already exist in the market?
4.      Is it an infringement of someone else’s IP? How to explain your IP?
5.      Is it large enough, strong enough?
6.      Is the fit and finish acceptable to your customers?
7.      Is the reliability adequate?
8.      What warranty can be offered?
9.      What is the standard packaging?
10.     How would warranty be serviced?
11.     Is the product sold to others in their market?
12.     What agreements can or cannot be made to limit sales of this product to others in your market?
13.     How honest and reliable is this customer?
14.     How can you demonstrate your own honesty and reliability?
15.     How much quantity and what schedule of purchases will work for both parites?
16.     Are there alternative suppliers?
17.     Who will register marks, create owner’s manual, attend to warning labels, etc.?
18.     What is your price? Shipping cost? Taxes or duties?
19.     How will you handle sticker shock or other price objections?
  Account Reps Do the Work, Get
           Good Ones!
• Once the bosses have opened the doors, the
  daily work will fall to the lower level staff.
• That staff must be able to resolve problems
  and get things done across cultural, time zone,
  and geographic barriers.
• Long term people, with language and cross
  cultural skills are necessary.
• Culture is OFTEN a source of conflict and
  problems. Do not underestimate this.
      Bosses Agree, but Staff Finds
              Problems…
• It is normal for the big bosses to easily come to an agreement
    – in principle – on the big picture.
It is also normal for the account rep, or technical staff to find
    many, many issues that must be worked through. Often
    seemingly in violation of the agreement between the big
    bosses.
Asians expect this. To them a “handshake” or a contract is the
    start of a process to get to a working agreement.
They know and expect the details (including price) to be worked
    out at a lower level, and probably with some pain.
      Be Cautious About Money
• Extending credit may be necessary.
• Extending credit may be dangerous.
How you handle this issue can be critical.
Really knowing your partner / customer is vital.

And…which currency you use and what plans
 you (mutually) have for currency fluctuations
 are important issues.
            Technical Support
• You can expect that your customer will not be
  as sophisticated as you hope on technical
  issues. However, they may surprise you.
• Your technical support rep is as important a
  person as your account rep. And they need
  similar expertise in communication, cultural
  issues, and language.
• Your tech rep will probably spend long periods
  living in Asia. They need to be ready for this.
     Engineering Communications
• There are always mis communications on
  engineering issues.
• Translators that are expert on the issues and
  vocabulary of the LEV business are needed.
• Working with the same software (usually Solidworks)
  is necessary.
• Thoughtful awareness of major differences in the
  background, education and skill sets of Chinese and
  Western engineers is necessary.
• A cautious, everything has a backup, test it and test it
  again, approach is needed.
  Have the Ability to Diagnose and Test in
          House and in the Field
• There will be quality and technical problems.
• You will need the ability to identify, describe, and
  communicate each way the issues and necessary
  changes.
• Be ready to make changes. Resistance on this point is
  usually not in your best interest.
                Warranties
• A warranty, which must include details on how
  it will be executed…is louder than words.
• Expect the Asian company to pay close
  attention to your warranty promises and how
  you handle them.
  Be Sure What The Customer Ordered Is
            What They Get!
• Be at the customer at the time your goods are
  received. Be ready to react to mistakes or
  misunderstandings quickly and clearly.
• Get their reps to be at your plant during assembly
  and testing of their goods. Be sure what goes into
  the box and into the container is what they wanted.
• Language, tact, and determination will be tested
  during these events.
• Handling them correctly will save you enormous
  money, time, and trouble.
    What is “Qualifying a Customer”?
A prospective customer should be examined for:
1. Communications capability. Do they understand you? Do
     you understand them? What backup or third party do you
     have to rely on?
2. Product Development Resources – can they develop the
     product?
3. Sales Capability – can they sell the prodcut.
4. Business practices. Are they honest and consistent? Are you
     both on the same page about the myriad details of business
     relationships? Do they pay their bills?
5. Do they need you? Can you satisfy their needs for
     predictable volumes?
6. Can you resolve problems together?
         Unqualified Customer
• There are customers who want to buy, but will
  fail in the market. Or fail with you.

Don’t make the deal. Back out in a way that
 leaves the door open.
     Chinese Electric Bike OEMs as an
                 Example
• More than 360 “manufacturers”.
• Most are actually “kit assemblers” of product made by others.
• Only a few have true manufacturing capabilities – maybe 40-
  50.
• Of those, only a handful 10-12 want or need export business
  at this time.
• Of those, only 2-3 have good English skills in their top
  management, and a history of good quality and good business
  practices.
• Of those, most are very busy and have customers in the most
  desirable markets.
• What seemed to be a generous supply of prospects boils
  down to a handful.
   What About Trading Companies?
• A trading company’s role is to be a
  communication conduit and a trouble shooter.
• If they are doing their job, they are worth the
  extra cost they create.
• Most trading companies do not have the skills
  necessary to be effective in LEV business.