By Lisa Bergson My customer looked at me sadly, his eyes imploring. It was hardly the type of encounter I was hoping for during my Asian sales tour. We were in the Shanghai division of a semiconductor company that had made a sizable investment in 15 of our gas analyzers, all of which now needed routine service and recertification. "We'll take care of you," I assured him.
But I wasn't sure how. We have service centers throughout much of Asia, but getting products to them from China is costly, complicated, and time-consuming.
Like many other small companies doing business abroad, we rely on independent sales representatives to sell our products. Ideally, these same reps would handle our customer service, but some charge way too much and take too long to do the work. So for two years we've been seeking partners we can train, equip, and commission to conduct maintenance and repairs for a fixed hourly rate. Quotes and billing come from the Pennsylvania office. Some of our sales reps accept these terms; other times, we contract with third-party service providers.
Finding a partner in China was proving to be a special challenge. Our local rep said he would work with us only if he could control estimates and billing. He argued that customers would only pay in Chinese currency, knowing that the Chinese government hadn't authorized us to issue invoices in local currency.
Fortunately, many free services are available to help businesses like mine. The president of our industry's trade association in China explained that transactions in U.S. dollars were common. We could indeed bill from the U.S. and offer service through a local company.
Thanks to a contact, I found a Taiwanese-managed startup offering high-quality tech support on behalf of foreign companies in China. When I visited, the director -- call him Eugene -- was eager to work with us. The facility was clean and modern, with plenty of capacity.
I guess it was just too easy. After adjusting our labor rates to local standards, we e-mailed Eugene our standard contract. No reply. A second in-person visit, with my regional sales manager and service manager in tow, revealed that Eugene wanted wages similar to what we pay in Dallas, among other things. We haggled well into the night. By then we were exhausted, and Eugene kept repeating himself.
Just as I thought it was hopeless, my service manager managed to change Eugene's mind. I planned to stop by his facility and sign the documents on my way to Japan the next day.
That morning, as I finished packing, I downloaded a message from Eugene. We had blown it. "Hard negotiation at the beginning stage causes me doubt about the future," he wrote. He cited several issues I thought we had resolved -- including a dispute over his team's expenses while in the U.S. -- as the basis for his decision not to sign the contract "at this time." Thinking of my customer with the 15 analyzers, I replied that I had no choice but to grant our local rep -- the one who insisted on handling billing and quotes himself -- the right to provide service. Dejected, I spent a woebegone weekend in Kyoto.
A few days later, while still in Japan, I received another e-mail from Eugene. He hoped I would "reconsider" his candidacy to handle our service in China.
I'll never know what changed Eugene's mind. Perhaps it was my genuine willingness to walk. But soon we had a signed contract. I e-mailed my customer the good news.
Lisa Bergson is president and CEO of both MEECO Inc., a 35-person manufacturer of trace analytical equipment, and its spin-off, Tiger Optics LLC