Mike Clark is the CEO of Canalta Controls – a company from Red Deer that manufactures industrial control and measurement equipment for the oil and gas industry.
You can learn more about their export success here.
1. What was your first export sale?
Our first export sale was into Texas in approximately 1998.
2. How did that sale come about?
This came about after initially making contact with American companies at various exhibitions. This one likely came as a result of the Calgary Global Petroleum Show.
3. What do you know now that you wish you knew then?
The biggest thing is the importance of building and maintaining customer confidence. You have to put your best foot forward in terms of your price, delivery and presentation and then remember to always think longer term. For us, it means you have to be prepared for a little give and take, flexibility, and negotiation when you’re dealing with overseas customers. Each region and company has unique requirements and expectations and so you have to understand and accommodate that, within reason, of course, because it strengthens your ability to pursue the opportunities that will follow. We learned that the hard way — you get into a sticking point on something and in the end, it could cost you a lot of future business.
It’s also important to build regional capabilities to support your products after the sale. That’s a key building block for building customer confidence. That weighs heavy on the mind of regional customers when considering buying from a new, foreign supplier, especially one based in a different time zone. They want to know that you’re going to stand behind what you’re selling and that was something we didn’t quite understand the importance of initially. We do now.
4. How has the trading world changed since you started in the business?
Probably the biggest thing I’ve seen is the rise of the internet and advancements in global communications. That has dramatically flattened the playing field for those who want to participate in global opportunities, both in terms of sales and expanding supply chains. Certain regions are also establishing domestic manufacturing and knowledge bases for items and services that previously were only available from Western companies. The days of simply bringing overseas components and materials to the West, assembling them and re-selling the products back into those same overseas market at significant mark-ups are coming to an end. Other countries also have some strict local content requirements and you have to consider that in your offerings. We try to think globally while engaging locally, and this applies to not only our sales effort, but also our supply chain efforts. In some cases, we purchased the overseas supply chains. For example, we own the foundry in India and we run our own machine shops and quality inspection facilities in South Korea. That sort of thing enhances our ability to sell into those areas and also back into North America.
5. What is the No. 1 thing SME’s should know about exporting?
The top thing I would say is the importance of building and maintaining a close relationship with a trusted local partner in each region. That’s No. 1. Those partners lobby on the ground for active opportunities, they help you to understand your competition in the region, and they assist in getting you onto the approved vendor lists. They also introduce you to the end users and buyers, which is really important in building trust. They not only understand the needs of the customer and how your company can offer a competitive advantage, but they can also help you understand and mitigate the risks of playing in “someone else’s sandbox.” In exchange for these services, you need to give them the marketing and promotional tools, quality products, good delivery and service, competitive value, and the margins required for them to land work and be profitable themselves.