Category Archives: central europe

The foot in the customer’s door: don’t let it start to hurt.

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On all our Central European markets, we are newcomers. From the Hi-Tech energy-cost saving nozzles that are used by wise companies, and the high quality pneumatic tools that we have introduced on the market, first customers represent 20% to 70% of our turnover depending on the market. In our business, the “customer” is an abstract term: in larger companies, we always have several users and deciders who function sometimes very autonomously.

We know the expression “putting your foot in the door”. My definition of it is that you have done a first sale at the customer’s, although the share of your products compared to the total purchase of similar products is marginal.

I always welcome a foot in the door. I welcome a decision carried out by the customer to buy something from us. It’s the difference between thinking about doing something and actually doing it.

The thing with the foot in the door is that it can start to hurt, because you are actually supposed to go through the door, not to stay stuck in the middle.

Many salespeople consider the job done with the beginning of the first sales. They consider that the hardest part has now been achieved, that the products are referenced, and that the urgency on this customer can be lifted in order to focus on new potentials. That in fact is rarely the case.

What you achieve with a foot in the door is the right to pursue your efforts. It means you are “tolerated” at the customer. You are not a member, but you’re allowed to look around through the partially opened door.

Through that partially opened door, the salesperson can take a better look inside the customer, see new people, listen more closely to customer needs, understand how everything works, who’s using, who’s deciding, who he/she should be talking to. If not, at best the salesperson stays in that uncomfortable place of the marginal supplier, selling little but needing to deliver generous conditions in the hope of bigger sales. And hope alone never generated any revenue.

In the end, frustrated, the salesperson takes the foot away only to see the door slamming back shut and requiring a renewed effort to reopen, but without the visibility and access to people he or she had.

A salesperson should use the opportunity of the half-opened door to push it wide open and close it on the nose of the competitors outside. And that means using the limited access gained by being a supplier to obtain as much info and contacts as possible.

I ask our people to be able to “map” their customer. A salesperson should be able to draw on a piece of paper a schematic view of the organization chart there. The salesperson should identify the places of use of the products, the key people and their motivations, and the potentials in all these places. And I insist on the organization chart even if schematic: Knowing 20 people working side by side in the same office or production area is great, but they simply cannot open new places of opportunity if they have little contact with other potential users of your products.

So the first sale is always something to celebrate with the salesperson. It is a great achievement, but it can get painful if we don’t move on.

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Leadership: do not panic as your technical skills are surpassed!

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It passed by without me noticing it, but it now has been two years since I was given the responsibility to take the lead in the troubled Bratislava office.

I have recruited all but one of the people I have trusted to develop our sales. They all have made tremendous progress as I watch the month of February come to an end with a new record and an outstanding month of January.

I am beginning to work with people who know more things than me on the technical level however: they understand better how the tools work, they know where the switch for changing this setting or this setting is, they know the power output of the nozzles and can assess on the power of the previous customer installation…I fold as their concrete experience has grown and turned them into skilled sales technicians.

Smoking a cigar at home the other day, I wondered how someone like me needs to envision the coming months or years to keep the organization tidy, functional, and successful as my output no longer includes higher technical knowledge or experience.

In general, the manager needs to bring something more to the table than simply a more detailed knowledge, or info, or capacity to do a higher discount.

Here is how I prepare my complimentary cocktail:

1) I stand by the company and my upper management any minute even when I disagree with their paths. Once something is decided, it needs to be applied. I explain and we go ahead. Playing any other game might make you sympathetic to your team when the decision taken is unpopular but it does not help leadership at all. On the contrary, you look like a “loser”.

2) I take decisions quickly and explain my reasons to the team member when a situation arises. I take full responsibility for it and should it be a mistake or should that decision be challenged by my upper-management, well so be it. Once I am convinced, my team can take my decision to the bank.

3) I encourage personal responsibility and return many of their requests to their own personal judgment.

4) I encourage them to review the situations they are in from a different perspective and share experiences I have had in the past. I tell many anecdotes of my work experience, of my business relationships, of my personal readings and research and my “gut feeling”. In short, I try to help them see things through a “people” perspective.

5) I am not afraid to keep my rules valid. It is not because a salesperson starts to be successful that that person can play outside the rules of the firm. You still come on time, you still help out your colleagues, pick up the phone, take down the bin to the container (and I do so myself as to set an example) and there is no eating in the office outside of break hours. Actually for the last one, I wish that was 100% true, but I still have to raise my voice.

There are no guarantees in this business, and you can always be challenged. Perhaps one last thing I see important might be discutable. I work with the opinion leaders of the team and always try to have them as ambassadors and help them understand the reasons of doing what we do. More generally, it is important to listen to each and every one. As a sales manager, you are still selling them the motivation to do their job well, the promising rewards of personal and permanent self-improvement, and the potential enjoyment of working with you and their colleagues. And we all know selling is listening first.

In one word, perhaps one of the pillars of leadership is to demonstrate you care: you care about the company and you care about the people you work with and you want the best for both. And you demonstrate that every day, with your own personality, your own life experience, and your own dreams.

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Let’s put “soul” and “care” in customer attitudes

Family-owned companies try harder

In May, I took a group of Slovak entrepreneurs on an “Armagnac”, “Wine” and “Cognac” tour in Southwestern France. We enjoyed great wine, great small hotels and great restaurants.

I took my friends only to small places, well rated, but not at the top “Michelin” level. And often, we asked the locals where we could go for lunch or dinner.

There is something about these small family owned restaurants. They want you to feel at home, they talk with passion about the special of the day, they offer you a last drink “on the house”. And they were genuinely honored to host Slovaks (many places for the first time) and they made it felt.

It showed the benefits of small operations when it comes to customer attitude. Like others, small entrepreneurs also make mistakes, but it always seems to matter less somehow because they are not just doing a job, they are living their lives.

Customer attitude needs “soul”

I like procedures when it comes to customer service because it helps, especially the newcomers in an organization, to understand how to materialize customer service.

That being said, “soul” is what is the most missing in customer/supplier relationships. The customer is just behind someone doing a job, and following some procedures.

You cannot train “soul”. This comes more or less naturally. You can tell an employee that the customer is important, that the customer brings money in the company, that it’s the customer’s money that is used to pay salaries. All of that is fine, but there is no “soul”, there is none of that committment that is going to result in a real customer/seller relationship.

And worse of all, it stops working as soon as there is the slightest problem.

“Soul” does not equal communication

I have seen many “communicating with customers” trainings. Companies that seeked to improve customer satisfaction worked on communication. Countless programs were invented, countless employees were subjected to speeches, role plays and what not in a very theoretical customer relationship policy.

In the end, and even in large firms for which we expected better, communication with customers just became a training on automated and pre-chewed responses to customer inquiries and remarks. No organization can really improve its customer service if it only thinks that it’s just a technical issue with communication.

Do not get me wrong, communication will work, but if there is something to communicate.

Do the employees feel that the customer is a respected person in the organization? Can the organization renew itself and admit when it is wrong? On what does the organization focus when talking internally to its employees, how does top management set the example, and how are concrete cases debriefed internally and learned from?

Does of any of this exist? Let me blunt, in some companies that thrived from their dominant position, noone even thinks about the above because as long as revenue comes in, it must mean that customers are happy. And if revenue does not come in, it’s the fault of the employees who do not communicate well. Let’s train them with the most expensive firms on the market.

And in the end it does not work. Surprised?

It’s all about care

In those small restaurants I was talking about in the beginning, “soul” is there because people own the place. It’s their creation, they want it to work, they want it to be successful, and they make no charts about it, they go with a feeling.

And the employees follow suit, because they feel part of the family.

That family is bond by the commitment of the owners to make the small operation a success. The owner is also very present, cooking, serving, talking to customers, making those small decisions such as offering a second round of coffee or a drink. Employees see that, they relate to that, and for the most part they start to understand how much the owner cares, and how much it is important to provide to customers the experience that they need.

In such firms, there is no hiding behind some customer satisfaction charts or an empty speech.

What firms need is an exemplary message from top down showing great care about the customer experience.

Given the challenges shown in the latest “Global Competitiveness Report, it is more than time to rethink how we are going to give to every customer a great experience and modernize our customer approach with fresher and more critical thinking.

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Comrades and Business owners!!! Unite for competition!!!

I am quite interested with Orange and T-Mobile not wanting to pay the fee to the Slovak telecommunications regulator for the extension of their license because they see it as too expensive. To be honest, I have no idea how it should be priced, but I found one of the arguments given by Orange Slovakia very interesting.

Orange claims in today’s (August 25th) edition of Hospodarske Noviny that  it is unfair that o2 (the newest competitor in Slovakia who started operations in 2007) paid 8 times less a couple of years ago when it acquired the license. It considers the measure discriminatory.

From where I stand it looks fair: you use more bandwidth, you pay more. It will be interesting to see o2’s reaction when their license comes up for renewal, but until then, it would have been outrageous to ask for a comparable cost for the license. It would have also been a blow to a free market system.

Competition is the cornerstone of our economies. It is competition that leads to innovation, to better customer experience, and to lower prices that benefit the entire economy in return. Competition is only a problem for companies seeking revenue by doing none of the above.  I am not discarding the need for firms to have strong financial results and reward shareholders (I am one myself), but a free market system must be associated with a strong competitive environment.

As there are now the first heated discussions in our four party coalition about next year’s budget, there are some talks on lowering payroll taxes in regards to keeping Slovakia labor costs competitive.

There should be in fact discussions about maintaining or strengthening Slovakia’s competitivity, but not without taking a broader look at all factors leading to increased costs for firms in this country.

Labor costs have been influenced by a rise in salaries (especially in western Slovakia) that was out of control until the first financial crisis of 2008. And these salaries are being pushed up by high real estate and mortgage costs, food costs, and gasoline costs. The best potential employees are on the lookout for better salaries because they need them for their families, and this drives costs for companies up just as much as the payroll taxes.

Let’s take the example of gasoline costs in Slovakia. I tank in all of Europe for my job and Slovakia’s prices never cease to amaze me. Data confirms (according to the webportal natankuj.sk) that even without counting taxes, Slovakia has 0,9 Eurocent more expensive gasoline than the EU average, and 2,6 Eurocents more expensive diesel fuel. Each time I fill up now, employees of the gas stations started giving me window tissue wipers. At current gasoline prices, I feel I would be eligible for stock options to be honest.

In conclusion, I don’t want government controlling prices. We should ask however that our governments (and the EU) make it as easy as possible for new players and innovative ideas to take hold in our markets. And in the case of Orange in Slovakia which finds its license expensive compared to that of a newcomer, well so be it. A market is not some organization’s property.

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Miškov’s road show

I was reading in “Profit” that Juraj Miškov, Slovakia’s Minister of the Economy, was sending Slovak representatives on a roadshow in Germany to seek out potential investors capable of bringing more Hi-Tech to Slovakia.

In all the turbulence that engulfs Slovakia in the daily works of a four party coalition, I was quite impressed by the minister’s clear view on the steps that Slovakia should take to promote investment. Finished the time in which printing a brochure would be enough, finished the time when Slovakia’s officials thought that the country was so attractive that people would come alone here and just try out their luck.

I worked last year on SARIO’s matchmaking fair with French firms. I believe that when this project was launched, SARIO was given by some French officials outrageous promises it could not in any way guarantee. As I struggled on my side to get French investors to seek out potential partners in Slovakia, it was clear that despite the personal efforts of SARIO’s team, it was unrealistic to believe that French companies would put up with travel expenses and a complex trip (the project was taking place in Nitra!) , especially just before a three weekend holiday, and with very vague promises of interesting partnerships from the Slovak side.

So seeing the situation reversed in which it is Slovakia that is going to promote itself pleases me very much as I find that Slovakia is being more pro-active in attracting added value investments.

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Scapegoating the PIIGS?

A caricature in today’s (August 10th) “Hospodarské Noviny”, Slovakia’s largest economic daily newspaper caught my attention.

A raft carrying 4 well off men drinking champagne floats on some sea called the Eurozone, while a hand and a ragged sleeve sticks out of the sea. “Slovakia” is written on that sleeve while the on the raft are listed the names of four countries that have made news recently: Greece, Italy, Spain and Portugal.

The debate if Slovakia should participate in the European safety net for debt stricken countries has been raging ever since the first aid plan. Slovakia’s people have made tremendous personal efforts during the post communist reforms: skyrocketing prices, unemployment, a struggling health and education infrastructure with a breakdown of what was in the past a very conservative society.

It is understandable that being asked to pitch in a State guarantee of almost 4,5 billion EUR makes people pretty angry. As was said at the time of the first bailout, Slovakia is a poor country, and has no resources to spare for countries that have not been able to finance themselves in a reasonable way.

That would be forgetting two important things: Slovakia is issued generous funding from the European Union for its development, infrastructure and education. 11,5 billion EUR are pre-allocated to Slovakia for 2007-2013 (for which 2,2 billion have been paid), and it would be unfair not to count it in the global European package, even if EU does not mean Eurozone.

The drawing does make me uncomfortable. Showing privileged fat guys drinking champagne on their boat while you drown does point towards the idea that the people on the raft are to blame for your demise. Firstly, I don’t think that nations that need the EFSF are “drinking champagne”: they are facing severe recession and high unemployment. They are probably going to live through the same hardships Slovaks went through: no-one remembers it as drinking champagne (a part for a bunch of well-connected moguls).

Now don’t get me wrong: I am as angry at politicians having mismanaged their economies for political gain than at the financial institutions that went bankrupt because of poor judgment. People who have elected politicians without thinking of what their promises were costing the country do need to tighten their belt as they are responsible for letting this happen. But let’s remember that the only reason Greeks managed to drown themselves in debt is that some people lent the money to them. Sounds familiar?

If the recession that has hit us since 2008 leads to a resurgence of nationalist finger pointing, the EU is in much more danger than I previously thought. This crisis is not so simple, and we need to overcome as Europeans, united and in peace.

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Car prices in Europe: evolution and differences between member states: Slovakia prices in free fall, for best deals shop in Hungary

The European Commission has released its car price survey for last year.

The report focuses on pricing differences between EU member countries by comparing price lists of cars in member states, and adapting major equipment differences.

This study has been issued on a regular basis since 1993 and has strongly influenced manufacturers to narrow the price differences of cars between EU member states or face (unwritten) a totally liberalized market.

Major differences occur often in pre-tax prices, since in countries where cars are heavily taxed, competition between manufacturers often drag fully taxed prices down. With the Euro, gaps have been considerably reduced as currency variation could not explain differences any more, and that price variations between countries became more visible to consumers.

Slovenia shines as one of the cheapest markets of the Eurozone after Greece. In the small car, it is the least expensive Eurozone country for 7 models out of 30. When it is more expensive, difference rarely reaches 5% difference with the nearest country.

As for another Euro country, Slovakia, the most important information is that according to the report, prices of new vehicles have dropped more than 17% when average prices in Europe dropped only 2.5%. It is no surprise that the used car market suffered as it did. I recalled on my website some used car professionals talking about sales prices going down one third.

We know that the Czech and Polish markets are highly competitive. The report shows it as the Czech Republic is cheaper than any Euro country for 7 models out of 20 from the small car segment and for 6 models out of 20 for the lower compact segment (Škoda Octavia…). It is to be said that this result is achieved even though the Czech Crown has appreciated against the Euro 3% between January 2010 and January 2011.

But the palm of attractive car prices is Hungary: in the small car segments, it shines as the cheapest country in almost half of the most selling models. In the lower intermediate segment, Hungary is the cheapest market for 5 out of 20 models.

Read more at> http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/921&format=HTML&aged=0&language=EN&guiLanguage=en

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