How to grow exports in a smart and cost-effective way

In a situation where exports decreased by 15 percent year-on-year in May, while the export of goods produced in Estonia decreased by more than a fifth, as Äripäev on 10 July writes, one of the clear challenges for Estonian companies is to open and grow new export markets and volumes. There are several ways to do this resource-efficiently and smartly.

First of all, in export development, it is necessary to make a strategic plan and an action plan for which markets and with what value proposition do you offer your goods and services. In other words, what is the reason why people want to buy my products and prefer them to competitors. The management and the people who are actually involved in the export development participate in making the plan, so that both the authority and the responsibility of making the plan are balanced for those who are going to implement it.

The customer may simply have a better price as an argument for the export purchase decision, but usually there are three or four elements in the value proposition together that lead the customer to the purchase decision. For example, in the case of one South Estonian woodworking mill, it was thought that a cheaper price would bring customers. However, during the research it was found that instead, as the most important element of a good service, customers buy quick response to fill the so-called gaps in their production processes, niche quantities and quality, and are even ready to pay more than the currently asked price.

In addition, the reason for the purchase decision may be the pleasure of doing business with these people or this company, reliability (familiarity) of trusting one's money, speed, flexibility, accuracy, ease of digital business, but perhaps on the contrary, a preference for personal business typical of Old European companies - a preference to talk on the phone instead of e-mail and meet physically face-to-face. The basis of the purchase decision can also be the origin, that I am buying from Estonia and not from Poland, the suitability of the specification, sufficient volume, and there are certainly more of these reasons. I have also seen a situation where a purchase decision is made to consciously support Ukrainians working in Estonian factories.

Secondly, people and relationships are critical - those who export and those who make purchasing decisions in the target market or intermediaries who lead to buyers. An action plan is needed on how to reach decision makers and how to create and maintain relationships with foreign client’s decision makers. It is worth making an objective review of which industry segments, current and future areas are suitable for the client. Also, which segments can be expected to make faster positive decisions and which activities are more long-term with the potential to be realized in a year or more.

Of course, it is necessary to know how to create and maintain relationships both in all business activities and in personal life. When establishing export relations, I have advised Estonian small and medium-sized companies to check their databases to see if they have pre-existing contacts but for some reason the transactions have not yet taken place.

Thirdly, it is cost-effective to review marketing and sales channels and diversify them where possible. In practice, it happens that contacts from trade fairs and road show visits from previous periods have remained partially or completely unprocessed, but there are also contacts for whom the timing was not suitable in the past, but now it may be just the right time. Many companies have also been helped by the way of thinking that they already know someone and where there is a reference at hand, which again creates trust in the current era of noise, information abundance and digitization.

For example, a manufacturer of environmentally friendly cleaning products has the freedom of choice whether to focus on the retail segment through chain stores or instead on the business customer and develop large packaging for the office cleaning segment. In the case of Estonian modular house manufacturers, for example, it can be seen on the market that in some cases the architectural creations of small houses of large factories work as so-called door openers, which the potential developer likes architecturally. Real estate developers always have projects of different sizes and time perspectives, and one product suits one and, for example, an apartment or town house for another.

Fourthly, it is necessary to review the marketing and sales tools with which to offer goods and services to foreign markets. These include, for example, sales materials and images, as well as the presentation of exporting team on social media - the way and what is communicated must support the company's value proposition and also educate the potential customer about developments in the field. It is definitely not possible to change everything at once, it is worth starting from what is realistic and feasible now and what needs to be included in the action plan in the future. It is worthwhile to use international networks, business diplomacy and trade platforms, in which registration and participation allow you to reach new markets and segments.

It is important to analyze the possibilities and resources suitable for the specifics of your company and act accordingly. The goals you set must be specific and it may be reasonable to review them together with the core team once a week during difficult times. An open, sincere and kind sense of cooperation is an important source of motivation. It pays to be brave and self-confident, to believe in yourself, your company and potential customers.

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