Thai Biz 101 - Doing Business in Thailand

Developing a strong marketing plan helps to identify and clarify priorities for your business. It is equally important to consider Thailand-specific factors when writing your marketing plan.

In general, a marketing plan can be separated in to four main sections:
1. Setting of goals and objectives
2. Reviewing the current situation
3. Formulating the actual strategy
4. Allocating resources to undertake and monitor the plan

Whilst you shouldn’t take months to complete your marketing plan, it should also not be the product of one person’s work in a single afternoon. Involve important stakeholders in the process and even involve team members.

But what Thailand-specific factors should you consider when writing your plan?

1. Political situation - first and foremost, you need to consider where the country is heading politically. It is almost impossible to predict, but that in itself tells you that the uncertainty needs to be incorporated in to your marketing plan. Committing millions of Baht to large scale date-specific events may be money wasted if protests begin again at that time - include terms in your contracts whereby you are entitled to refunds if this is the case. This instability also means you need to set realistic objectives.

2. Don’t underestimate the importance of your brand / message - the local market in Thailand is very brand conscious. Creating a buzz around your brand, through online media or others, can result in excellent sales.

3. Be ready to offer promotions and flexibility - if there is one thing Thai’s like, it’s a promotion! We see them all over Bangkok and some shopping centres seem to roll from one promotion to another. The reason for this is simple - it brings customers through the door.

4. Find accurate sources of market information - for every expert claiming the economy is growing, there is one saying it is stagnant. Find sources of information for your industry and market that you feel are the most realistic.

5. Be realistic when reviewing your competition - it is a common flaw in Thailand to underestimate the competition; look closely at their offering and see how it compares to your own.

Thailand is currently very unpredictable. Your marketing plan must take this in to account - if you need assistance, seek marketing help.

Retention is a key issue for SME’s in Thailand. Preventing that top sales person from defecting to a bigger, multinational competitor is a tough task, but not an impossible one. How can an SME on a budget provide employees with suitable benefits, with the goal of retaining their top team members?

• Launch an employee benefits program: your team need to know that they mean something to the organisation. This can be done cost effectively. Key is to improve benefits as employees are promoted, and in line with their time at the organisation.
• Be creative with your benefits program: you don’t need top of the line health care, pension plans and champagne at staff birthday parties. Here are the types of benefits you should be offering:

1. Company pays for lunch on Friday
2. Everyone leaves work early on Friday
3. All staff birthdays include a card signed by all employees, and cake
4. Staff trips are organised every year – remember, in Thailand this does not have to cost a fortune. A couple of minibuses, a trip to a waterfall or beach, lunch and some dinner can easily be done by under Baht 700/person with a little bit of planning.
5. Basic annual bonus plan: equivalent of 3% of monthly salary goes in to a savings account and is paid as a bonus at the end of the year.
6. Pay mobile expenses for employees that need it for business purposes
7. Provide basic health insurance for middle/senior staff; basic plans from AIA start from just Baht 2,500/year/person.
8. Launch employee of the month and employee of the year awards – be creative with what these might be. For employee of the year, Baht 5,000 cash is great, but a return flight to Chiang Mai, free hotel night and some spending money is much more exciting
9. Make staff loans available at fair interest rates
10. Get yourself on training company email lists and look out for cost effective programs –send your staff on training where required. Some government sponsored courses can be as cheap as Baht 3,000 for 4 days! This is valuable for your employees AND for your organisation as these new skills are applied to operations.
11. Increase annual leave over time as employees are with you longer.
12. Have sit down meetings with employees to discuss potential growth within the organisation, and your expectations of them before they can achieve this.

Follow through with your benefit program and budget accordingly. Don’t miss an employee of the month award! Do not forget staff bonuses or a staff trip! Your commitment to the program will sell it as much as the 12 items above; it must be something you do willingly and gladly, not begrudgingly.

Written by Stuart Blott, CEO, Fusion Business Concepts - Member of the Sutlet Group

Disclaimer: Please note that regulations in Thailand change from time to time. The information above was correct at the time of publication, but we recommend that you always consult with an expert for the latest regulations.

Written by Stuart Blott, General Manager, Sutlet Group Co., Ltd.

From the most casual of sports fans, to NBA fanatics, “The Decision” was hard to miss last week. LeBron James, perhaps the greatest basketball player of this generation, and a Cleveland native, left the Cleveland Cavaliers to play for the Miami Heat, joining his good friend (and fellow superstar) Dwayne Wade and another star in Chris Bosh, who left the Toronto Raptors to be with the Heat. Following 2 years of deliberation amongst fans and interested parties, and a variety of potential suitors for LeBrons talents, the Heat ‘won’ and the three friends form what is potentially one of the most devastating 3-person groups ever to play together in the league.

To add further intrigue, instead of announcing his decision quietly, LeBron announced which team he was joining in a live, one hour special, billed as “The Decision”, but that has already been called “The Mistake”. Additionally, his former boss, Dan Gilbert, published an incredibly vindictive letter moments after the decision labeling James a coward, amongst other things.

The move has been commented on in every conceivable way amongst sport websites, publications, blogs and I’m sure has provided Twitter with serious need to review its current bandwidth. What has not been considered by anyone, as yet, are the incredibly interesting HR issues that this entire situation and series of events bring to the forefront. This article will discuss some of these.

Retention

The Cavaliers could not retain LeBron James, despite being able to offer him MORE money that their competitors. Despite 7 years of employment, not only did LeBron leave them, but hurt them in the worse possible way by announcing his decision on live TV. In Cleveland, fans burned his jersey and openly wept as the decision was shown on live TV. The bottom line though is that Cleveland did not do enough to retain LeBron James.

This demonstrates a serious issue in today’s workplace. Retaining key staff has never been more important, and it does not come down purely to money.

In Cleveland’s case, they lost LeBron because they did not build a contender around him, and provided only an average level supporting cast that could not carry the load when LeBron was ‘off’. In organisations, the provision of a ‘supporting cast’ can be applied to the provision of Employee Benefits.

Without a unique, creative and valuable Employee Benefits Program (EMP), employees feel less valuable and are provided less ‘ties’ to the organisation. An EBP cannot just include cash bonuses, pensions schemes etc, it must be more creative. Why not plan for team building events, off-site training to address specific needs, consider support for dependents of employees, provide staff loans at reasonable rates, plan staff events that will build unity and trust. It should be a holistic approach that takes in to account personal needs, not just financial needs.

Long term planning

The Cavaliers had 7 years to build a team around LeBron, but instead of applying a long term mentality to their moves (trades, acquisitions), they always went for the ‘home run’ summer whereby the team could win a championship immediately. If, 6-7 years ago the team had started to put the pieces in place around LeBron slowly, allowing a young team to grow together, the Cavaliers would have most likely become a championship-caliber team.

The short-termism of the Cleveland management team hurt them in the long run.

In HR, the same applies. At all times, senior management must be considering the needs if it’s team, and the growth of the team, not just this year but 3-5 years from now. Only then will employees feel a since of progression and be able to visualize the way the company is moving forward.

Recruitment

As much as Cleveland lost LeBron, Miami won by recruiting him… and recruiting him hard. Led by superstar in waiting Wade, a Miami hero for the past half decade, and Team President Pat Riley, regarded as perhaps the smartest and most creative executives in the sport, LeBron received the pitch from Miami, as well as 4-5 other teams, and eventually selected them.

Now, we don’t know what the pitch contained exactly, but it highlights the importance of having a strong recruitment policy, and ‘pitch’ for prospective employees.

In any interview, it is well known now that both parties are being interviewed. The employee needs to be impressed by the organisation as much as the organisation needs to be impressed by the employee. But how many organisations actually act upon this?

Every organisation needs to look at itself from the perspective of a prospective employee and ask itself honestly:

1. Why would I want to work for this company?

2. What would stop me working for this company?

3. How does this company compare, as an employer, to its competitors?

The answers to these questions are important. Even if you are a (on the surface) relatively boring organisation managing accounting services for clients, this doesn’t mean you have to be a boring employer. Why would an employee choose you over your competitors? What are the benefits that might sway their decision? Can you effectively communicate the benefits of being employed at your organisation to a prospect? Consider your benefits program, corporate culture, emphasis on HR planning, plans and growth of the company, the interesting and fun teams, exciting elements of the work, responsibilities, opportunities for creativity and investing ideas. Do your pitch to the prospect during the interview.

Balance

Have Miami done something brilliant or ridiculous? Every organisation has a budget that they wish to stick to. In the NBA, this is made more formal via the application of a salary cap. Teams cannot spend more on salaries than the salary cap figure, un less it is resigning current players, and even them they are to pay what is called a luxury tax. In today’s climate, most teams are working very hard to keep spending below the salary cap.

For Miami, to sign these three top players has taken the vast majority of their available ‘cap space’ or budget. Given that a team MUST have 15 players under contract, the Heat are left with the problem of filling the gaps and not having much money to do it with.

Time will tell whether 3 superstars can win a championship with 12 low cost role players and rookies, and it will be interesting to see the results from an HR perspective. For SME’s especially, there is always the temptation to break the bank and hire a superstar General Manager to manage the business, and trust that this one person can carry the load of the Managing Director, and handle marketing, operations, HR and sales. Sure, maybe they can, but if that budget was instead spent on hiring 4-5 lower cost managers in each department, would this provide more stability and a better structure. What happens when your superstar decides to leave (or for the Heat, gets injured)?

Stakeholders

Whilst we may look at HR as an internal issue, it should be remembered that there are greater stakeholders in the mix too. Look at Cleveland fans, who cried and shouted and screamed and were silent after hearing the decision. Yes, in sports this is more relevant, but organisations also need to consider the effect on other stakeholders when managing their HR function.

As an organisation, hiring and firing effects employees yes, but also families, competitors, customers, suppliers and more. Consider the relationships you have in place with these stakeholders, and how a staff addition or replacement might affect these groups. In the end, the best business decision needs to be made, but sometimes the best business decision is also one that takes in to account factors not directly related to business itself.

Greater good

What the Miami Heat have done especially well is create a team spirit already. Their two superstars, and star, have all accepted LESS money than other teams could have paid them in order to ensure they could play together and build something special. This seems like an alien concept in today’s “I want” economy. Accepting less for yourself, in order to achieve the greater good for the team.

This can come down to corporate culture. The best organisations can retain their employees without having to break the bank. By creating an interesting corporate culture where success is recognised and rewarded, politics are minimised, hard work is prevalent and fun is had by the team, employees WILL stay longer for less money. Looking back at Employee Benefits Programs, these should enhance benefits for employees over time, thus keeping the employee looking forward… “just 2 more years until my bonus plan doubles”… “wow, in 6 months my department gets free tax planning training”.

Conclusion

The HR issues that come from “The Decision” are interesting and provide a slightly different view on the entire event.

Written by Stuart Blott, General Manager, Sutlet Group Co., Ltd

Sutlet Group is Thailand’s leading provider of business services and solutions, including accounting, visa and work permit management, HR, legal services and marketing solutions. See www.sutletgroup.com for more information on how to start up, development, support, management and grow your business in Thailand. All the HR issues outlined above can be addressed by the Sutlet Group.

Cost effective ways to run your small business in Thailand (part 1: Marketing)

Competition in Thailand for consumer Baht is high, and so no matter what industry you are in or where you operate, you must market and promote your small business in Thailand effectively.

Unfortunately, the easiest thing to do when you’re promoting your business is to spend money! Marketing agencies, advertisements, print publications, radio and TV spots, fancy new websites etc… they call cost serious money. As an SME in Thailand, you may not have the resources to engage in these traditional marketing activities.

The good news is that there are a multitude of promotional options available that a) do not need to cost a fortune and b) are equally, if not more, effective than their traditional counterparts. Below, we will present a selection of these based on our experience running small businesses in Thailand.

*Before you start promoting your business, make sure you have a strong idea of what your organisation stands for, why it is the best in its market, and that you can concisely explain WHY a customer should choose you over the competition. If you need help with this, talk to us.

Use every opportunity to get your business name, and brand, out there.

Make sure that your business cards, letterhead, email signatures, outgoing faxes, receipts, invoices, brochures, company presentation, folders, and anything else you can think of has a consistent design, logo, slogan, message and includes your website address. It might not seem like much, but this presents your business in a very positive, professional manner and also, you never know who will come across one of the above… it could very well be your next customer.

Create a formal referral process with your current customers

The chances are that you have plenty of satisfied customers in your target market, and perhaps all over Thailand. Combine this with the fact that we all know people are more likely to believe something if they hear it from someone they know and trust. What does this tell us? That referrals are a HUGE promotional channel, and often under utilised.

Step 1: What can you offer your current customers in exchange for qualified referrals? A discount on their next purchase/spending? Great, do that. But try to be creative about it. For example, Sutlet Group in Bangkok offer their customers a special leisure-themed gift (such as a 50% discount on dining at Up-scale Restaurant X in exchange for a referral. All that took was a simple conversation with the restaurant manager, who was happy to welcome new guests to his venue.

Step 2: Communicate this referral opportunity to your customers, and remember to provide them with the tools to ‘sell’ your product or service to their contacts.

Step 3: Ensure that new referrals are also offered a special privilege/discount for signing as a referred customer, even if it means losing your profit on their first part of the relationship. Think long term.

Online marketing

More and more customers are using the internet to search for your service and your competitors. Many companies have learned their lesson about online marketing and know now that the key is being found in search engines. This does not need to cost money.

To effectively market your product or service online, you need to consider three separate elements:

1. Your website – keep it simple and clean and focus on ‘selling’ the benefits and competitive advantage of your product or service, rather endlessly talking about ‘what you do’. All a prospect wants to know is a) can I trust these guys? and b) why should I choose these guys?

2. Social networking – it may seem strange to have a facebook page and a blog for your tailor business or your cutlery distribution company, and it is! The point is that the more you post online about your company, wherever this is, the more chance there is that Google and other search engines will pick you up when someone in Norway or Argentina searches “forks and spoons in Thailand”.

Additionally, this like blog article, we may have someone comment on it, thus creating a personal relationship between Sutlet Group and that individual. Now that is excellent marketing.

Social networking resources to review include: Facebook, Twitter, Blogs (eBlogger and Wordpress), Flickr, Youtube, Google Buzz, Digg, Hi5 and Linked-In. Whilst you don’t need to utilise all of them, consider how you might use them creatively and intelligently.

To effectively post, blog and upload you need a very dedicated schedule that allows for little flexibility. It is something that you need to start, and continue, and continue and continue, without missing a week or missing a response/comment from a user.

Blog about anything related to your business or your industry, but try not to make every single blog a 1,000 word advertisement for how wonderful you are! Keep it a few hundred words, and keep it interesting!

3. Get listed on free business directories - There are literally dozens of free business listing and directories in Thailand. Google them and get the same business profile listed on ALL of them. It’s a day’s work and will increase your online presence x30. Remember to keep a record of all the listings, and your usernames and password for accessing them. Ad you grow, launch new services, win awards etc, you should update your profile everywhere to maintain consistency.

4. Post free press releases – Similar to posting a regular blog, post a free press release on prlog.org or freepressreleases.com every week. You may post about a new employee, new product, new service, new website, new event etc – think of something that your prospective client base will be interested in. Keep a log of PR ideas as they come to you, to make sure you have something ready each week.

With anything you post online, including blogs and press releases, make sure you in clued keywords related to your business, and to Thailand. This will assist relevant searches to find you.

Write articles or speak at seminars on your topic

Positioning yourself as an expert in your chosen field is a great way to promote your business and to attract prospective customers. Magazines, newspapers and others will accept articles on topics of interest within your industry. Do some research and see where you can find ‘guest articles’, including online. Write something about your industry, trends etc and try to keep you company out of it until closing off the article “for more assistance or information on this topic, contact COMPANY NAME at email@email.com”. You’ll see this at the end of this article too!

The same goes for speaking engagements. Within Bangkok, there are many groups who organize speaking engagement and training for other people. If you have the confidence to be a recognised leader in your field, contact them to see if you can help. Alternatively, set up and promote your own speaking engagement or presentation.

Create a marketing partnership

Creating a promotional partnership is simple. Find a company that is willing to distribute your own brochures or business cards within their marketing materials and that you would be willing to do the same for them, and go to work! Additionally, could your brochures be placed in reception areas of a restaurant, hotel, office or other location?

Alternatively, find a complementary business and carry out a joint promotion with them to share advertising and cut costs, whilst simultaneously generate business for both of you.

And, don’t forget to blog and post a press release about the partnership!

If you must utilize traditional promotional channels, really consider the ROI.

Magazines, newspapers, TV channels will throw a variety of figures at you to amaze and baffle you in Thailand. There may even be a graph or two and a testimonial from a client who tripled his sales because of advertising in newspaper A. Magazines here in Bangkok will dazzle with incredible circulation figures (often fabricated). The reality is that as a consumer, do we really even notice traditional, impersonal advertisements anymore?

Before considering anything like the above, really consider what ROI you can expect. How many customers do you need to generate from the advertising to make it worthwhile, and over what period of time. How realistic to you think it is to expect someone to see one advertisement and decide to utilize your company? It is a big expenditure and requires a big decision, especially for a small business in Thailand.

Summary

The ideas above are just a selection of the options available to small businesses in Thailand. The key is to be creative, utilise new promotional channels and to think outside the box a little. Importantly though, you also need to spend some time every day on promoting your business.

For more information, contact the author Stuart Blott at stuart@sutletgroup.com