Eleven Savage Strategies for your Mexico Business
The opportunity for you to do business in Mexico is alive and well. Mexico needs you. You need Mexico. Don’t wait for the governments to move. You move. I will give you eleven of my own personal Savage Strategies that have helped me to do business in Mexico.
In Mexico, these eleven Savage Strategies apply to you whether you are a small, medium or large company. I invite you to become a Savage Strategist. Let me tell you what I mean.
If you are a small business, you can penetrate the Mexican market without massive marketing budgets, using your time, energy and imagination.
If you are a medium sized company, you will have a moderate marketing budget, but will still have to rely on your wits and savvy.
If you are a large company, you will have to take a hard look at your corporate culture, and figure out how to instill Savage Strategies throughout your organization.
I will show you how to succeed in Mexico, no matter the size of your business.
Do you need to speak Spanish?
Most Mexican professionals speak English. Many have gone to university in the USA. You can always find a translator to help you.
But be clever. Find a way of doing it differently. Instead of acting like the average “gringo” and running around with a translator, how about learning the language? Sound scary? It’s really not that hard. If you are really serious about doing business in Mexico, it would be useful to take a one-month immersion course with Berlitz or another language school. Thousands of United States businesspeople have done this successfully. Go to Mexico and refuse to talk English for a month. Immerse yourself. At the end of 30-days, you will be doing quite well.
I was lucky because my father and mother lived in Ecuador while I was growing up. I learned Spanish as a child. However, I had to learn Portuguese a few years ago when we opened up Brazil. I did exactly what I told you. Thirty days of total immersion. I lived in Brazil for a month. No English except a 5-minute phone call to my wife every night. Nothing but Portuguese. In a month, I was making sales calls, speaking Portuguese reasonably well.
Thus, Savage Strategy #1 is to learn the language. You can do it.
It is useful to poke fun at yourself and not take yourself too seriously. Often I break the ice by asking,
“What do you call a person who speaks two languages?”
“And what do you call a person who speaks three languages?”
“And what do you call a person who speaks one language?”
Typical gringo mistake
Insight: Do not refer to yourself as an “American” or a “North American.” It’s OK in almost every country, from Guatemala to Argentina, but not in Mexico. A Mexican is just as much an American as you are. And a Mexican is also a “North American.” Thus the North American Free Trade Agreement (NAFTA), which includes the three North American countries: Canada, USA and Mexico. It’s better to call yourself simply a “United States Citizen” or, in Spanish, an “Estadounidense.”
“En México, todo se puede.”
In Mexico, there is a phrase, “En México, todo se puede.” “In Mexico, you can do anything.” For some Mexicans, that means you can do anything if you are willing to bribe someone. For others, it simply means that if you have patience and are willing to play the game, you can eventually do anything. I go with the latter view. A Savage Strategist does not bribe.
In my years of doing business in Mexico, I have been able to do just about anything I wanted. And I have never bribed anyone. For one thing, I do not believe in bribery. And further, United States law states that any United States citizen who bribes someone in a foreign country is a criminal and is subject to jail time. That threat keeps my morality on the straight and narrow!
My father was a Baptist missionary in Ecuador. I had the good fortune of growing up in Latin America, learning the language and immersing myself in the culture. Dad felt bribery was a sin and refused to budge, even when a simple five-dollar bribe could have gotten him what he wanted. There are some things Dad taught that I no longer believe. I like to drink wine and dance, both considered sinful by my father. But I think he was right about bribery. Buying-off is corrupt. A payoff weakens everyone who participates. Subornment debilitates a nation. If you bribe someone, you might speed up the process, but you will weaken everyone’s character: your own, the person you bribed and the economic system itself. Do not do it. Ever.
Thus, Savage Strategy #2 is “Do not bribe.”
The Battery Scam
Let me tell you a funny story that happened to me back in 1989. This will give you a feel for situations you might confront. I hope it will help you relax, chuckle a bit and move through the Mexican bureaucracy with patience.
We imported 1000 flashlights to give away as prizes to our customers. The flashlights were valued at $2.00 and cleared customs with no problem. Total value was $2,000. We paid 30% of $600. (That was back in the pre-NAFTA days when tariffs were high).
A few months later, we imported another 1000 flashlights. This time they did not clear customs. We thought they were the same flashlights as the first order and had declared them as such on our import forms.
We called customs to find out what was happening. Our operations manager, Miguel Carvajal, was put on hold for 35 minutes. Finally, someone came on the line:
“Sr. Carvajal, you have filled out a fraudulent import form.”
“You are trying to smuggle 1000 batteries into Mexico.”
“What are you talking about?”
“Your form says 1000 flashlights. However, these flashlights have batteries. You did not declare the batteries.”
Miguel was astonished and terrified. He had never been accused of fraud in his life. The picture of life in a Mexican jail flashed through his mind. Sweat formed across his brow.
“But these are the same flashlights we ordered last time,” he stammered.
“No, these have batteries,” the customs agent intoned morosely.
The customs agent was right. The first batch of flashlights came without batteries. The new batch had built-in batteries.
As I said above, “En México, todo se puede.” We did not have to bribe. We simply had to wait. And wait. And wait. Finally, enough supervisors examined the bill of lading to put their signatures on it, we had to pay an extra $200 import duties and we got our flashlights.
I found that charm always worked better than threats. In this case, I intervened to help Miguel. I talked to the customs supervisor in soothing tones, using his title “Licenciado” with great respect. “Licenciado Domínguez, thank you for checking into this for me. I really need your help. We thought we had ordered the same flashlights, but the company sent us a new model. We thought we were doing the right thing, but it is clear we made a mistake. Can you help us clear it up?”
This kind of question must be worded carefully. If I asked him, “What can I do to clear it up” he would think I was offering him a bribe. But when I put the question to him, “Can you help us clear it up?” then he knew it was up to him. He grunted and complained and lectured me, “You must get these forms correctly in the future.”
“Yes, Licenciado, I apologize for the extra work we are imposing on you and your staff. I know you are all overworked already. But we have many people waiting for these flashlights as a gift and we would deeply appreciate your help.”
In the end, we gave away 10 free flashlights to the people in the customs office. Total cost to our company was only $20. This was not a bribe, but a gift. We did not give them away until AFTER they had cleared the shipment. Thus, it was not an inducement. But the small gift made them more receptive the next time there was a problem with customs. They liked us and treated us well. We also treated them well, with courtesy, patience and the occasional gift, given only AFTER they had done their job.
The key is to keep your sense of humor and not get mad when these things happen to you. Picture yourself as a stand-up comic and relate what happened to you as though you were standing in front of a crowd. That will ease your own tension, make you laugh with a quiet chuckle and insure that you enjoy Mexico.
Thus, Savage Strategy #3 is to laugh a lot.
Relationships instead of huge marketing budgets
A Savage Strategist in Mexico does not rely on huge marketing budgets, but on his or her time, energy and imagination. In Mexico, business tactics often work better than in the United States.
A Savage Strategist thinks of the individual rather than the masses. In Mexico, this concept is even more important. You will find that an individual needs to be treated with respect and friendliness. You will rarely do business solely by direct mail or the telephone, even though both these techniques will be huge assets for you. In the end, you will see people face-to-face, at breakfast, lunch, dinner or in the office.
Savage Strategy #4 is to think in terms of relationships more than sales. In Mexico, this is truer than ever. As you get to know a person, a level of trust builds. When the person feels that you are his or her friend, and can be trusted, the door will be open and you will do business.
Many Business Strategies often Work Better in Mexico than in the United States.
Savage Strategy #5 is to use your proven methods that work in the USA before modifying them for Mexico.
In my business in the United States, we relied a great deal on direct mail. We were always happy with a 2% response.
When I went to Mexico, I suggested to my Mexican colleagues that we try a direct mail program. They advised against it. “No, Steve, it won’t work in Mexico. The postal system is terrible and people won’t trust what you say even if they get the mailing.”
I mulled it over, then suggested quietly, “Well, let’s just do a test. Let’s try 1000 letters.”
We did. What do you think the response rate was?
The lesson here is: don’t assume anything and test everything.
Hit the streets
To do business in Mexico, you must hit the streets. Don’t expect to go to Mexico, sit in an international lawyer’s elegant suite in Mexico City’s dazzling World Trade Center and expect to figure out Mexico. That’s how most traditional companies start. It’s the wrong way.
Savage Strategy #6 is to “wander around.” Walk the streets; see what’s going on. Walk into businesses that are selling your competitors’ products. Check out similar products. How are they being sold? What kinds of displays? What are the prices?
Mexicans are more open to sales calls
Mexicans are unfailingly courteous. It is usually easier to get in to see a corporate officer than it is in the United States. It is also easier to knock on doors and get into homes. Often they will offer you a cup of coffee and listen politely to your sales presentation.
I had a business in the United States that sold products to schools. For many years, I trained the United States sales force on the best way to approach school principals and superintendents. It was doable, but not easy.
Then I went to Mexico to set up the same business. I was amazed at how polite the school principals were. Even the district superintendents received me with courtesy, never with the sense of hurry and brusqueness I usually experienced in the United States.
Mexican Ambivalence towards the United States
Poor Mexico! So far from God … and so close to the United States!
- Octavio Paz, Mexican author, Nobel Prize for Literature 1994
Most Mexicans have a love/hate relationship with the United States. They still resent the fact that we took away half their territory in 1848. I often joke with my Mexican friends not to worry, because they are gradually taking it all back! There are now over 30,000,000 people of Mexican descent in the United States.
Seriously, however, it is a problem. The United States has invaded Mexico way too many times. And every time a McDonald’s opens, some Mexicans, especially the academics, see it as another invasion. Yet, they flock to McDonald’s!
Thus, when you take your products or services to Mexico, you will find a huge market, a vast opportunity. But you will probably meet resistance along the way.
Thus, Savage Strategy #7 is to be humble, be a good sport and be patient.
When we sold our products to the schools in Mexico, for fund raising campaigns, there were usually two or three parents on the PTA (Parent Teacher Association) board who were very negative. They felt that we were a big Yankee company coming in to exploit the poor families, manipulating their minds with beautiful prizes, selling them something they didn’t need, and in the end taking all the money out of Mexico.
None of this was true, of course, but it was a perception we had to overcome.
The most important thing you can provide for Mexico is jobs. When you go to Mexico with a marketing plan that provides even one or two jobs for Mexicans, you have opened the door. If you have a plan for 20, 30, 100 or 1000 jobs, the door opens wider and wider.
Savage Strategy #8 is to create jobs.
One of the interesting results of NAFTA (North American Free Trade Agreement) is that BOTH Mexico and the USA have developed more jobs. It was the fear of the trade unions in both Mexico and the United States that NAFTA would take away jobs. Yes, jobs have been lost, and many people have been hurt in the United States, as factories have moved south. But new companies have arisen, and the overall impact has been positive for both economies.
Thus, when you go to Mexico, your company in the United States will grow as you develop a support operation for your Mexican business. But Mexico and Mexicans will win because you will open up jobs for them as well. Everyone wins.
One Mexican phrase you may as learn right now is “Fuentes de trabajo.” “Sources of work.” “Jobs.” Or more colorfully, “fountains of work.” That’s what we bring to Mexico. Use the phrase “fuentes de trabajo” over and over. The doors will open quickly. “Yo traigo fuentes de trabajo.” “I bring jobs.”
When the United States sneezes, Mexico catches pneumonia
Mexicans often joke, “When the United States sneezes, Mexico catches pneumonia.” The United States recession of 2001 cast a severe pall over Mexico. 80% of Mexico’s exports go to the USA. Many companies in Mexico had decreases of 20% to 40% during 2001. Many laid off thousands of workers. Many went bankrupt.
Before September 11, when the United States economy was faltering, Mexico was already limping. After September 11, when the United States economy went into official recession, Mexico staggered.
Mexico hates to be so dependent on the colossus to the North. But it is a cold hard fact.
Mexican cultural tips
Mexican people are warm and loving. Treat them with courtesy and respect and they will shower you with affection.
Quite quickly, you will experience the Mexican hug, “the abrazo.” It is different for men and women. I used to think a big bear hug was the way to hug a Mexican man. But a Mexican friend of mine clued me in. The bear hug is OK for a man and a woman. However, for two Mexican men, the hug is a three-step process, a light minuet:
First, you shake hands.
Then you move to your right and hug him lightly with your left hand on his right shoulder and your right hand on his left ribcage.
Then you back off and shake hands again.
My friend told me it developed back in the days when Mexicans carried guns. As you give him a gentle embrace, you check to see if he is carrying a gun! Well, no one carries guns in Mexico these days, and the embrace is simply a warm and friendly courtesy, an acknowledgment of trust.
Women always kiss each other on the cheek.
When a man and a woman first meet, in a business setting, it’s a handshake. After that, a light kiss on the cheek is almost always in order for both hello and goodbye.
Savage Strategy #9 is to watch what they do and copy it.
A Savage Strategist assumes nothing and tests everything
Savage Strategy #10 is to assume nothing and test everything.
When you start out in Mexico, many assumptions need to be dashed. One of my Mexican advisors told me we couldn’t ship our merchandise, because the Mexican transportation system was unreliable. He said we’d need our own delivery vans. Not only would we need a driver for each van: he insisted we’d need a second person to sit in the van to guard while the driver delivered the package.
I cringed in horror. I could imagine a fleet of trucks all over Mexico, with a padded payroll and a huge bureaucracy. That was not my Savage way. We couldn’t make it in Mexico if those were the ground rules.
Again, I quietly suggested, “Let’s do a test.”
We tried a variety of Mexican transportation companies. Many of the bus companies, like Greyhound in the United States, were good at shipping. DHL was entering the Mexican market and offered service to most Mexican cities. We tried them all. We found a few good companies. We lost a few packages, but the cost of the losses was miniscule compared to the cost of a fleet of vans, drivers and guards!
I repeat: don’t assume anything and test everything.
Another assumption we had to overcome was the Mexican reaction to our business. We produced products for schools to sell for fund raising programs. In the United States, this is common. Nearly every school sells stuff to raise money. In Mexico, it was a novelty.
“No, it will never work here,” my Mexican advisors insisted. “The schools get all their money from the government and the parents will never sell anything to raise money.”
Again, I quietly suggested a test. “Let’s try it at a few schools and see what happens.”
In the United States, our average sale per school was $2600. In Mexico, our first 60 schools averaged $5,300. A year later, one of our schools in Mexico sold $200,000, a figure that has never been matched anywhere in the school fund raising business, not in the United States, not in the world!
If you come to Mexico as the great know-it-all, you will meet intense resistance. If you listen with respect, and offer your suggestions humbly, you can always do whatever you need to do.
Thus, Savage Strategy #11 is to listen with respect and then do what you need to do.
In closing, let me summarize. Choose your line of attack: Export, import, strategic alliance or setting up a business. Then apply the eleven Savage Strategies. Mexico is the hottest market in the world. Join the fiesta. Come and dance.
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