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This article was written by Mr. Jeffrey P. Graham in April 1999 and it originally appeared in InterTrade and Investment Magazine. ©InterTrade & Investment Magazine. All Rights Reserved. Qualifying sales and/or trade leads generated by a website on the World Wide Web is a very confusing and often frustrating experience. Simply put, most of the trade leads posted on the Internet are of little value. E-mail allows would-be entrepreneurs and wannabe types to write very interesting inquiries and to present themselves as being very credible companies. Many executives are frustrated by this fact and therefore reluctant to become involved with the Internet. They reason, justifiably so, that valuable time will be wasted if their employees are using their time to determine what is and what is not a genuine lead and then how they might best respond to it. First of all, it is very important for top business executives to understand that the Internet is here to stay and that their companies will have to adjust their strategies accordingly. There are several very good reasons why this has become a recurring theme of mine. By far the most important reason is that most small and medium size companies are not yet properly organized to work in the Internet environment. Up until now, the Internet has been populated by huge corporations with already well-established brand name recognition and very small, usually home-based businesses that are now being popularized as “micro-businesses”. The lack of organization, in most cases, is quite understandable. Many of these small and medium sized companies have not adopted a brand name marketing strategy because their products are sold on a business to business basis. Also, many of these SME’s are selling products that would not easily lend themselves to the colorful and fast paced environment of the Internet. So how does one go about qualifying a trade lead generated by the Internet? The first step involves what I like to call the lead categorization process. Most leads will fit into one of the following categories: · Generalized trade offers. This is normally a company that is either trying to sell your company something that it might need, suggesting that it might act as your company’s representative in their country or is allegedly a part of a larger tender offer that would seek a price quotation for a long list of products. · Joint venture offers. This company seeks your company’s cooperation in a joint venture in which your company will supply the products and it will provide you with a list of possible contacts for sales as well as providing “other assistance” to assist your company in penetrating certain very difficult or complex foreign markets. · Agents, brokers and distributors. This is the traditional middleman concept that is often dressed up to look like a legitimate trade intermediary. · Requests for quotation and general procurement offers. This company is trying to procure a product, either as an intermediary and/or as a direct buyer. Of the above categories, the last two are the normally the most important: the good old RFQ (request for a price quotation) and the inquiry by a domestic or foreign trade intermediary. The single most important aspect of this categorization process is the amount of specific information about the product/services required, proposed terms of sale and delivery dates along with a detailed description of the inquiring company including complete contact information. As a general rule, requests for quotation, if accompanied by specific information, should always take priority over other requests because there is the possibility that there might be time restraints. After that, requests by legitimate trade intermediaries are the second most important category. All other requests should be labeled general inquiries. Once you’ve completed this process, you will then want to qualify the company’s identity as follows: 1. Is this company easily identified and confirmed? Can you easily find this company’s name in buyers’ guides and importers directories? Is this company a member of the local chamber of commerce or similar business organization? Does the commercial attache of the company’s country confirm the existence of the company? Does the company have a DUNS # and/or credit reports available? Even though this company found you via the Internet, you should attempt to confirm its prior existence outside of the Internet. 2. Does this company respond to contact in a normal and professional manner? Is your e-mail message answered? Can you reach the person listed as the contact person via telephone during normal business hours in their country? If you do call and leave a message, is your phone call returned? Are requests for more information handled properly? 3. Does the inquiry make sense to you? If you can confirm the company’s prior existence, but it is making a request disproportionate with its reported size, you should be alarmed and act with caution. Do not be afraid to ask for a clarification. 4. Demand trade and banking references. Before the facsimile machine and e-mail were standard office equipment, most companies who did business in global markets listed two banking references on their letterhead. Any legitimate trade intermediary with the facilities and experience to engage in an international business transaction would be quite accustomed to providing this information. Categorizing the lead and confirming the company’s existence should not require very much time. If it does or is very difficult, a red flag should pop up in your mind and warn you to proceed with extreme caution. The final process, actually responding to the trade lead with a price quotation, pro forma or similar offer is very simple if you remember some very basic rules. · Limit your contacts to people who can make a buying decision. One aspect of international trade is that transactions that might occur rather quickly in the US, often require substantially more time. Do not be confused by the urgency of the initial inquiry. However, if a buying decision is being made by a group, as is sometime the case, you want to attempt to be in contact with somebody of equal or greater status than yourself or your designated employee. · Never send e-mail, faxes and/or letters in which you officially invite anybody to a meeting in the US. If this request is made, politely decline it, unless you have been given written assurance by a member of the US Foreign Service Corp. that the persons in question are well known to them. This is especially true for countries in dangerous regions, whether or not the country itself is neutral or politically friendly to the US. · Do not feel obligated to spend $7,000 in travel and lodging in order to secure a $600 order. Some newcomers to international business are acutely sensitive to offending foreigners and therefore go to outrageous lengths in order to not appear to be the ugly American. Be polite and fair-minded but be firm. · Do not play the sample game. Require prospective buyers to pay for samples and then give them an appropriate discount on their first order. · Before you prepare an actual price quotation, send prospective buyers enough information to make a buying decision. Be precise in providing clear and specific information about prices, availability and delivery schedules. Do not promise what you can not deliver. · Be prepared to translate or have translated into a foreign language your product information and even your personal correspondence. · If a buyer proposes a change in the terms of sale, seek advice from the letter of credit section of your bank’s international department or when necessary an international law firm. Remember that qualifying trade leads is a process and a practice. Establish measured guidelines for yourself and your employees and then follow them. |
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