Is your sales team ready for the EU?
Matt Lynch is national sales director of LYNKA Promotional Products. John Lynch is president of LYNKA.
Poland's accession to the European Union includes not only opportunities for your company, but also risks. Enlargement will increase the European market by over 20% to more than 500 million consumers, and experts believe that that the benefits for the country could be substantial. Conventional wisdom suggests that with membership, we can expect faster growth and improved standards of living. That means more money to go around.
On the flip side, there will be challenges on operating in a very open and competitive market. As the country enters the EU, the only Polish firms that survive will be those that operate better and smarter than before. And the same is true for their sales forces.
In 2001, we gathered 15 members of our management team to discuss our future business strategy. We held a traditional SWOT (strengths, weaknesses, opportunities and threats) talk and focused much of our attention on issues involving EU entry. Interestingly, our management team found Poland's entry into Europe as both the biggest opportunity and our biggest threat.
How will EU integration affect your company and your sales organization? Here are the many questions you should consider: Will your company survive in an increasingly competitive market place? Will an entirely new class of potential clients emerge as traditional SMEs are forced to become more competitive after entering the EU? Will western competitors finally recognize the opportunities in central Europe and try to set up shop here and go after your business?
You should consider the following issues when devising your own EU entry strategy as well as making sure you maintain or grow your domestic market share:
Multilingual sales reps and customer service. It seems obvious, but you can't expect French companies to speak Polish or even (gasp!) English. Your reps will have to be able to communicate clearly in different languages. As you hire new sales and customer service reps now, you should look for people who are at least bilingual. And look for diversity in language skills. Don't hire English speakers only.
Approach EU opportunities as a series of regional markets. The leading EU markets are Germany, France, England, Spain and Italy. Most domestic companies do not have much international experience, while a large percentage of EU companies have successful operations in multiple countries. The experience learned from setting up abroad gives EU companies an advantage over their Polish counterparts. Don't expect to have one plan for EU entry, but a separate plan for each market you enter.
Target customer segments that you already know. If your company has a strength in servicing pharmaceutical firms or FMCG companies, then make this your plan of attack in Europe. Even better, use the client relationships you've developed in Poland as a platform to expand into Europe. Multinational companies have multinational networks - so take advantage of them. This is how most consultancies, accounting firms and ad agencies expand internationally, on the backs of their existing clients.
Start attending relevant conferences and industry trade shows in each country. This is the most immediate and least expensive research you can do on EU markets. Chambers of Commerce and the commercial section of your embassy should be able to provide you with information on when these take place. These events will give you firsthand information about the markets, competitors and local business regulations.
Know your competitors. It's hard enough to understand your competitors here, so it will be a real challenge to keep track of your new EU competitors. You may want to partner up with a local firm that can research and provide market data as well as answer the important questions you'll need to know before proceeding.
Sales staff considerations. In some industries, increased salaries may be necessary to keep talent from relocating for better pay conditions. This is, of course, always the case. But as employees have more opportunities to move and work abroad, it may become more expensive to keep your stars from leaving. At the same time, your EU competitors starting operations in Poland are going to need sales reps, and the first place they are going to look is your sales force. Make sure you have non-compete contracts in place. Get legal advice in this area if you need it.
Pricing and invoicing. Preparing offers and invoices will have to be in euro. This sounds easy, but once you take into account transportation and handling costs, as well as currency fluctuations, not to mention the added costs of international customer service, it becomes more complicated. International clients want to know your price - now. If you don't have a euro price list, make one now. Keeping abreast of currency fluctuations and adjusting your prices to reflect this will be more important than ever.
Don't forget opportunities in the East. Because of Poland's prime location, your company should explore the opportunities in the East as well. There may be advantages for the country that lead to export opportunities in the other direction. EU expansion isn't over - it's just beginning. So depending on your company's offering, eastern opportunities may be more attractive than western ones.
Finally, companies need to be committed to long-term market development. Selling in EU countries is not going to be an overnight success. And it won't come cheaply either. Most domestic companies are not prepared for EU accession; however, with a little research and a sound strategy, they have an incredible opportunity to compete on this new expanded playing field.
