10 Things to Keep in Mind while Selling to Indian Traditional Businesses
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If you are reading this, it's most likely you are trying to understand the Indian market. It is observed that Indians rank "trust and value for money" above everything. The challenge for any business who is trying to enter the Indian market is to understand how an organization can sell the product or service in the Indian market.
India is a vast market where you see a lot of diversity in buying habits. Indian consumers are considered to be value driven and they also tend to be loyal to a brand if it gives good customer experience. For an Indian customer, a good customer experience means having a trustworthy and reliable relationship with the business.
In order to build this successful relationship between the consumer and business, I have listed the 10 key findings based on my experience of selling enterprise software to Indian SMEs:
10% Cost 100% Performance
100 for 10: Indian consumers are considered to be a spend thrift since Indians are not the most exuberant spenders and this very behaviour also gets carried over to the business spending. Indian businesses are looking for 100% performance at 10% the cost. You will always have cost pressures. Make sure you keep your cost in check and the operations as efficient as possible.
The Scale is the Key (Margins will be thin; the volume will give more profits)
If you can't scale, you can't survive. Being a price sensitive market, the margins will always be under pressure. Be prepared to sell more (volume) for less (lower price).
Architect your system for scale. Build scalable process; standardization is the key. Engineer your process and standardize them. SOP's [Standard operating procedure] will be of great help.
Give Free Features
Indians like free stuff. Instead of charging for features upfront give them for free initially [helps in getting your product stabilized and tested] and in return ask for references. (No SME in India would like to pay for a new feature, hence I go to my customers with new features and offer them for free, in return I take references, and references have a shorter sales TAT and higher probability of closure)
Have a Kill Switch
Decision cycle is fast, but payment cycles are slow (You seriously need to have the shutdown button in your hand to make sure u get paid on time every time). Penalize them for late or no payments. Indian businesses are lousy when it comes to payment deadlines. Incentivize early payments with discounts.
Be Prepared for Hard Negotiations and Bargains
Indians are hard bargainers; Bargain and negotiations are a must, even if your price is low (Usually this is done by purchase managers who actually are involved in purchasing Raw materials, etc. they have a habit of negotiating,)
Top-Down Approach for Sale
Going from the Top is the fastest way to sell (Even if an HR head is super happy about the product, the final decision will be taken by the CEO or MD in SME unlike corporates where HR head finally takes the call, so better reach out to the owners instead of Department heads)
Digital is Great but SMEs need a real person to Talk and Negotiate
Orders will be given to Humans and not machines. SMEs will like to see someone before giving an order, they will not subscribe online, so have a distributed sales force or you will have to travel. Create a partner network. Even Google had to setup a partner network.
Leverage the Regional Languages
India is hugely diverse when it comes to languages. Having a Sales team with multilingual capability can help in winning over new customers in different segments. Being fluent in regional languages is a huge plus during sales; helps to bring down barriers and creates a trusted environment.
Offline Payment Mechanism
Although internet banking and digital banking has been around for more than a decade, SME's still rely on the age-old checks and money orders. Keep a service for managing the time and cost for these kind of payment channels.
Localize your Product
A lot of start-ups are looking and replicating products or business models from the developed world and it's a great way of leveraging a tried and tested system; however, make sure you have made provisions for on-ground realties. Tweak your products and business models for Indian customers (E.g.: - Uber accepting cash payments, or Myntra offering Try and buy service)