One definition of sales is ‘the transfer of enthusiasm’ about a product or service that your SME is trying to sell. An SME expanding in to Emerging Markets is going to have to figure out how to make their target customers enthusiastic about its products and services. Some products and services sell themselves. With enormous pent-up demand for products like KFC and Scotch Whisky in Asian markets an SME may simply have to make a product or service available to win in a new market. Whilst everyone can live without fast food and alcohol, for a while at least, almost no organisation can survive without an accountant and a good one at that. So how should a clever SME owner sell to Emerging Markets? Know your market.
Many SMEs in developed economies thrive in a highly regulated, predictable and stable marketplace where randomness and volatility have been suppressed. We are living in a rapidly expanding world that, in some industries, changes exponentially. Disruption is the new ‘buzz word’ for game changing and emerging markets provide an additional opportunity for this. Existing SMEs in emerging markets are used to managing volatility, randomness, uncertainty, disorder and asymmetry. Finding the right processes, tools and models when it comes to the international expansion of SMEs into emerging markets can be done through research, alliances and related business modeling innovation, but it can be a minefield.
Cultural Intelligence (CQ)
One way for an SME to expand and win in Emerging Markets is to understand the cultures it is facing. Most people are familiar with IQ an EQ. The ability to adapt across cultures, Cultural Intelligence (CQ), is an innovative strategic tool for SME owners. It can be applied to selling effectively across cultures in Emerging Markets. CQ is a psychology based approach that has four dimensions.
CQ-Drive is a person’s interest and confidence in functioning effectively in culturally diverse settings. A highly motivated sales team will drive your SME business forward. Creating a highly motivated sales team requires hiring sales executives with a personality suitable for selling, letting them get on with the job, then recognising and rewarding them appropriately. Intrinsic interest, deriving enjoyment from culturally diverse experiences, is one sign that your sales executive is a real sales person. They will love your product and service and exude this passion to their customers with consistent and persistent selling. Extrinsic interest, gaining benefits from culturally diverse experiences, is shown by sales executives that respond positively to cultural challenges on sales visits. Maybe a ‘white face’ is better to sell to an MNC in Asia than a local person and this sensitivity must be managed effectively so as not to make local sales staff feel less valuable. Self-efficacy, having the confidence to be effective in culturally diverse situations, can keep a sales executive going when faced with a stream of rejections or unreasonable or unethical requests. When a large sales order is received then a sales manager should respond with financial rewards in a money culture like China or extra days off or a company sponsored holiday which may be more suitable to other Asian cultures.
CQ-Knowledge is a person’s knowledge about how cultures are similar and how cultures are different. It includes business, knowledge about economic and legal systems, and which products and services that can and cannot be sold due to taxes, customs clearance and changes in regulations. Interpersonal knowledge about values, social interaction norms, and religious beliefs can have significant influence on sales ranging from ethical practices and how to approach a high-ranking or VIP customer to when not to visit a client during a series of religious holidays. A new expatriate sales manager should spend time before and after coming in to post learning in depth about the cultures they are working in. Socio-linguistics, knowledge about rules of languages and rules for expressing non-verbal behaviors, influences sales with the use of buzz words that will make your products and services more attractive to the customer. Western luxury products have been sold successfully in Emerging Markets in part because of the ‘Face’ value they give to consumers eager to show they are affluent and international to the peers or family members.
CQ-Strategy is how a person makes sense of culturally diverse experiences. It occurs when people make judgments about their own thought processes and those of others. It includes awareness, knowing about one’s existing cultural knowledge, and what is acceptable and unacceptable behaviour in a certain country, planning or strategizing before a culturally diverse encounter which will help to determine the business goals that a sales person wants to achieve before arranging a sales meeting, checking assumptions and adjusting mental maps when actual experiences differ from expectations. Having no expectations is a great way not to be disappointed and working on the wrong assumptions may make an ass out of your sales staff or your SME. Some simple cultural strategy such as playing golf with a series of CEOs at their favourite golf club, then informing your other customers about it, may help an SME access new sales business.
CQ-Action is a person’s capability to adapt verbal and non-verbal behavior to make it appropriate to diverse cultures. It involves having a flexible repertoire of behavioral responses that suit a variety of situations. It includes modifying non-verbal behavior such as gestures and facial expressions to relate better to your target customer. Modifying verbal behaviors involves changing your accent or tone of voice to be more persuasive or more assertive or to empathize better with your target customers. Flattering a customer or showing that you really care about them and the product or service you are selling can lead to good sales results. How a sales person does this effectively can vary from culture to culture and a good SME sales manager must train their team to know what works and what doesn’t.
Some markets in Asia such as China may thrive on ‘Face’ where a buyer is willing and able to spend a large amount of money on a luxury item to show their success to their peers. In Japan, as in many other countries, consumers may prefer a Japanese brand to a foreign brand and so improving the Cultural Intelligence of your SME’s sales leaders and team will increase the chances of product acceptance and raise sales volumes. Simple strategies can be effective but an SME owner must know their markets and understand their targets preferences across different cultures.