For U.S. defense companies seeking to enter the international market, one of the most important steps in securing international defense sales is to hire a good foreign sales representative. Today I’ll discuss why you need a foreign representative, and in a future post I’ll share some tips for how to identify a good rep.
In some countries, retaining a local sales representative is a legal requirement for doing business in the country. But beyond complying with local law, hiring a local rep is beneficial for your business, since they will dramatically increase your chances of successfully completing sales in their country.
Foreign sales representatives help you navigate the local business environment. A good rep will help your company identify potential sales, connect with decision-makers, and navigate local regulations.
- Identifying potential sales: A good local representative will have a general awareness of the armed forces in their country – their equipment capabilities and needs; their funding availability and budge cycles. The local rep should be aware of potential military deals before the bid comes out, and should be able to work proactively with the military and civilian leadership to develop projects.
- Access to decision-makers: The local representative should have some connection to military and civilian decision-makers in their country, or be able to make those connections.
- Compliance with local regulations: One of the biggest differences between doing business overseas is the regulatory environment – and often, the instability of the regulatory environment. When I worked in Ecuador, local regulations were not only burdensome, but seemed to be constantly changing. The process for government procurement changed from year to year. A local rep should have a good understanding of how government procedures work in their country, and if they themselves are not a lawyer, should be able to contact a lawyer to ensure that your company complies with all local laws.
- The intangibles: Finally, the local rep will understand the intangibles of doing business in their country. How do you request a meeting with a government official? Are gifts or invitations to meals appropriate? When you’re meeting someone new, is it appropriate to “talk shop” right away, or do you need to build the relationship over pleasantries? The local rep will be clued in to local cultural norms and be able to forge connections with customers.
While it may seem that sales can be conducted at a distance – over the internet or with regular travel – hiring a local representative might seem an unnecessary expense. However, a good local representative more than pays for their commission by helping you navigate the local business environment — and land sales!
How has your experience been in working with foreign reps? Have they helped you bridge cultural differences to work more effectively?