Global Sources invited me to speak to a group of suppliers in Foshan, a few weeks ago.
Most Chinese exporters try to push their products in the hands of anybody who will pay… And that’s a big mistake on their part. They need to identify what their “ideal customer” looks like, and then avoid selling to customers that have a very different profile.
Here is what I told them.
There are different types of customers:
- Some want basic products, with the lowest price;
- Some want quality and responsiveness first;
- Some want the ability to order small quantities, with a quick turnaround time;
- Some want strong engineering/design capabilities, to develop complex/creative new products;
- And so on.
A big mistake to avoid: if you try to appeal to all types of customers, you appeal to no one.
How to find your ideal customer?
1. Look at your current customers, and try to identify three of them that share these characteristics:
- They are happy about your offer (quality, lead times, product mix…);
- Your pricing is OK for them;
- You have kept them for at least 2 years, or you think you will keep them for a long time.
(Don’t think of your biggest customers. Just your best customers. If you find a lot of them, you will be doing great business.)
2. Look for commonalities:
- Do they come from the same country?
- Do they have the same type of business (e.g. retail chains, or internet sellers…)?
- Do they develop new products with you, or do they expect you to propose designs?
- And so on.
If two of these three customers share several characteristics, that’s your “ideal customer profile”.
3. What are your ideal customers looking for?
There are other importers like them. You need them to find you!
So the two questions to ask are:
- How have they found you? (If they use mostly one channel, focus more on that channel.)
- What do they value in you? Why are they happy with you? (To find similar customers, you will need to show in an obvious manner that you can offer these advantages.)
For example: they might be happy to work with you because:
- You are the right size (about 300 employees);
- They are a third-party seller on Amazon, and you offer the right product at the right quality level and at the right price for that marketing channel;
- You have enough designs in your showroom for them to find something suitable to their needs;
- They have direct contact with the sales manager when there is something sensitive to discuss;
- They don’t care whether you are a trading company or a manufacturer;
- You genuinely make efforts when a deadline is tight.
Here are a few other examples of such targets:
- Customers that want to buy standard items but want a lot of choice;
- Customers that want to develop complex new products;
- Customers that are looking for a very experienced manufacturer with good & quick communication.
So, how to focus on your company’s natural strengths?
Advice for manufacturers
Most buyers think this way:
- If we work with a supplier that is too large relative to our orders, we will be quoted high prices and given poor service.
- If we work with a small supplier that cannot produce the quantities we order, they will be forced to subcontract production and we will probably be in for a disaster.
If you are small: emphasize arguments such as “quick reaction”, “management cares about every order”, or “small orders accepted”.
If you are big: mention your famous customers, your number of engineers, or your certifications. But also show videos of your factory, if it is very well organized.
Advice for trading companies
Most buyers think this:
“If a supplier shows a very wide range of products, it means they are a trading company.”
At the beginning, it is very important to FOCUS on one product category and one factory. It will help you have a higher success rate on customer inquiries:
- Faster response from factory;
- Better product expertise from salesperson.
On a trade show, show only 1 type of product (the one you really want to push). You can also have a thin catalogue with complementary products, and explain that you buy them from other factories you know well.
What other piece of advice would you give Chinese suppliers?