What I Learnt from a Self-Made Multi-Millionaire

I got the honour of spending 4 days with a self-made multi-millionaire from Taiwan. With over 95 countries under his distribution network, it is no surprise that he is one of the smartest businessmen I've ever met. What makes him stand out from the crowd is his knowledge in marketing. He is also a voluntary invited speaker to MBA courses in Taiwan universities. The following are some business concepts that I learnt from him during my brief encounter with him:

1) Find the right customers

There are some hotels that charge $100 a night and others that charge $1,000 a night. There is no point arguing which rate is reasonable because the value is determined by the guest. Guests that stay at the $100 hotel value a no-frills hotel, whereas guests at the $1,000 hotel value comfort, service, security, class, hygiene, etc. Instead of spending time, money and energy into converting one type of guest into another (sales skills involved), it is more efficient to use those resources into finding more guests of that same type (marketing skills involved).

Commentary: I wrote an article earlier explaining sales vs. marketing. As an analogy to the paragraph above, sales is like trying to convert a person from one religion to another, whereas marketing is finding a location where the people are free-thinkers and trying to convert them. Directing your resources into marketing, followed up by sales, will make your business more efficient.

2) Have a strategy - and maintain it

You have to acknowledge that you cannot satisfy everyone. If 80% of your current customers share the same characteristics, you must be aware that your current business strategy is catering to their needs. There will be criticisms coming from the remaining 20% and you will be tempted to change your strategy for them but bear in mind how it will affect the 80% majority. If you will lose customers from your majority to cater for the minority, then it is not worth doing. Keep doing what you are doing right.

3) Capturing the city

When asked why he picked Chile in South America as the first country when expanding overseas, he replied,

"The biggest market is the USA, but as in the art of war, you do not attack a main city head on because it is the most heavily fortified. To capture the main city, you first take on the weaker surrounding villages. After you have captured the surrounding villages, it is easier to take on the main city."

4) Show concern to your customers

Showing that you care for your customers will add value to your product, especially important for a product that is competing in the premium range. This is why his company's motto is "Care about your products, and show concern to your customers". The company encourages their distributors to find a low cost way to show customers you care even though there is no transaction, using the example of an optometrist cleaning your glasses for no charge even though you do not buy from them.

5) Have a strong competitive advantage

Being the only brand from Asia of his category in one of America's largest distributor is not an easy feat to achieve. These are his competitive advantages to stay ahead of the game:

• One stop shop - His brand has the biggest range of products so his customers do not need to look for other brands to find what they are looking for (example of doing thing better)
• Ahead of the game and continuous improvement - His products are always the trendsetter and continuously improved in quality because the company invests heavily into research and development (example of doing things faster and better)
• Great quality products at a reasonable price - Because of continuous improvement and strategically located, his products are cheaper (not cheapest) than comparative products in the same quality (example of doing things cheaper)
• Unrivalled marketing knowledge - With 30 years of experience and a wide global distribution channel, the company can provide advice and recommendations to new distributors on how to increase their sales volume (example of doing things better and faster)

6) Get a "lost leader"

This is a marketing concept which supermarkets use a lot. They advertise one product at 30% off to draw you to their shop with the idea that a shopper will end up buying more than just that 1 product on sale. When trying to widen his distribution network, the businessman made it a point to sell at least ONE product when the distributor has no interest in any of his products. Even having only 1 product on his shelf has a chance, however small it may be, for a re-order. If you leave empty handed, you get ZERO chance for future business. That 1 product on his shelf may open doors that might otherwise be impossible.