Finns going international

At the beginning of the 1990s, Reijo Karppinen commissioned a European market survey on the expansion opportunities for his company. The results were crushing. According to the consultant’s report, there were no markets for hydraulic equipment in Europe.

At that point, Dynaset Oy, whose story began in Karppinen’s garage, had been operating for less than five years. From the very beginning, however, Karppinen had had a vision of there being international markets for hydraulic equipment. He decided to trust his instincts. “I decided that I would attend a fair in Stockholm as soon as I could afford a stand.”

The trip to the trade fair became a reality and gave Karppinen faith in his company’s internationalisation opportunities. “Even with no language skills, I managed to make a few sales, although their value didn’t even add up to the price of the stand. I realised that there were no markets for hydraulic equipment, but the markets could be built. That is our task as a pioneering company.”

A multicultural sales team

Today, Ylöjärvi-based Dynaset Oy is a globally successful manufacturer of hydraulic generators, power washers and compressors. Over 80% of the company’s sales originate from abroad, and it has customers in more than 60 countries.

The design, sales and production are still based in Finland. The family enterprise’s sales are now the responsibility of Reijo’s daughter, Anni Karppinen. She is specialised in Chinese and Asian trade, and worked at Dynaset’s office in China for a while.

The sales team includes a total of 12 people. In addition to Finns, there are a few French employees as well as one employee each from Germany, Portugal, China and Russia. Having an increasingly international sales team has been a conscious decision.

“When a guy goes and meets customers in his own native language, he can open many more doors. The customers will take him more seriously, and conducting business will be easier for them. The salespersons are also genuinely interested in their areas,” Reijo Karppinen says.

However, he adds that the company must have sufficient exports and the language area must be large enough in order to make it profitable for the company to hire a native speaker.

Dynaset has increased its linguistic capital little by little. At the beginning, the first trips to trade fairs were made by a man who only spoke Finnish and made gestures with his hands.

“My language skills were so poor that I could barely manage abroad. I made up for them with my knowledge of the products and industry as well as my enthusiasm. I was forced to draw on paper and show with my hands, but poor language skills also had a benefit. I had to think and decide how to underline the strengths and get the message across.”

A part of the international sales team of Dynaset: Hugues Lambert (left), Nicolas Denoncin, Anni Karppinen, Volker Städter and Sergei Melnikov.

Decide on your focus

Dynaset has made independent progress in the international markets. When exports to Sweden started going nicely, the company continued southwards. Obtaining customers required lots of legwork. “I packed up the car and set out to tour Europe, attending various fairs. My goal was to open the door of twenty customers every day. When I got to the hotel in the evening, I studied the places I would visit the following day and marked them on the map,” Reijo Karppinen says.

Today, a company planning to go international can receive help from the Team Finland network, for instance. This is an umbrella organisation for state-funded internationalisation services. The network provides companies with information on, for example, the market and political situation of individual countries, expected changes in the business environment, business opportunities in various areas and even sales leads. Team Finland involves experts from Finpro, Finnvera and Tekes, among others.

The problem with Finnish companies is often said to be the inability to sell. Finnvera’s Titta Mantila disagrees.
“The biggest problem of companies going international is a lack of focus. Without focus, neither the financial nor personnel resources are enough.”

As regards funding, Mantila notes that while the costs of product development are easier to budget and present to investors, the same should also be done to sales and marketing expenses. “Sales and marketing are part of the company’s need for working capital and, therefore, also covered by funding.”

Sales through networks

Finpro helps companies in the various stages of going global. Some companies may be heading abroad for the first time, and others are considering launching new services in a familiar country. Finpro aims to bring companies together at the same table, regardless of whether they are rookies or highly experienced export professionals.

Seppo Orsila is a partner in Modulight, a company that has been involved in international sales from the very day it was established. Specialising in medical equipment, the company now operates in Silicon Valley, since the US market offers the greatest growth potential. Even though Modulight has been selling its products in the United States for a long time, Finpro’s contacts helped its business reach new heights last year.

Orsila says that a company going international should not hire local staff right away. He personally flies from Tampere to Silicon Valley once or twice a month. “The customers want to do business with a decision-maker. The company management must fly in from Finland, learn to know the people and then make themselves known. You can’t do this by hiring a sales manager and waiting for a deal,” Orsila says.

Aarikka has also made use of Team Finland’s services, such as guidance. For example, Finpro’s South Korean contact person provided the company with information on where the locals buy their consumer products. “The proportion of TV and online shops is large. While this information is important, it is still a big step to set out and achieve sales and find partners for your own product,” says CEO Anu Vauhkonen.

Aarikka has been involved in Team Finland’s Lifestyle Asia programme and taken part in export promotion trips with other Finnish brands. The company has also benefited from the contacts offered by the network. One Friday afternoon, Vauhkonen received a phone call from the Team Finland contact person.

“I was asked whether I would like to meet a Chinese gentleman in our Esplanadi shop. I was working in the warehouse and first said that I wasn’t really dressed appropriately. But I’m happy I went and met the gentleman, because his company is now an important customer for us,” Vauhkonen says.  Aarikka’s export efforts have yielded good results. Last year, the proportion of exports increased from about 5% to 15%.

Cultural differences are not an obstacle

Anni Karppinen says that foreign customers are now expecting more and better support materials. This is something on which Dynaset has paid particular attention. “It used to be enough to offer a solution to the customer. Nowadays, you need to provide more support materials and they must be high-quality things, such as 3D models.” The appearance and design of the product family were also revamped in the course of a year.

A Finnish company involved in exports is also bound to face various cultural differences. Anni Karppinen advises people to adopt a relaxed approach to these. “Culture is important in its own way, but if you have good manners in general, that’s enough. When you are polite, which hand you shake doesn’t matter so much.”

Seppo Orsila of Modulight says that the most conspicuous cultural difference is how things are managed. Things do not proceed as fast abroad as in Finland. “I have done business in 70 countries, and rather few of them are as straightforward as Finland. Here, customers may say directly what they want, but elsewhere the salesperson needs to do more work to find out what the customers want,” Orsila says.

Salesperson as a conveyor of information

In Dynaset’s case, new sales still require spreading the word about the opportunities offered by hydraulics. Indeed, when the salespeople first go to a new market area, their primary job is to distribute information.
“There’s no point in looking for a retailer for a new market unless there are customers. We have also noticed that customers start buying products in areas in which we’ve been spreading information in person, even if we haven’t contacted these exact customers. So, word does get around,” Reijo Karppinen says.

“People often talk about how you should approach the customer through the executive management. However, we more often contact companies at the grass-roots level: middle management and engineers,” he continues. This approach requires the salespeople to have in-depth knowledge of the products. “At our company, every new employee is first familiarised with production. Even salespeople assemble a few products before they start selling them,” Anni Karppinen says.

Follow through on the deal

Doing business also requires understanding the fears of customers. Reijo Karppinen gained personal experience in this when he was starting sales in the Japanese market.

“We attended a trade fair and found an enthusiastic retailer in Japan. They bought a few pieces of equipment, but I required that they must install one on an excavator before I come and train them.”  Things stretched on and on. Reijo Karppinen kept asking the customer if they had installed the equipment already. Finally, he got a green light from Japan, flew in, travelled 500 kilometres on the train to the customer and found out that the equipment was still lying on the workshop floor. “They were afraid that the excavator would break if they installed the equipment. This marked the beginning of long and detailed negotiations. Time passed, and I finally told them that we had to start installing the equipment now because my train would leave in exactly 24 hours.” Karppinen was allowed to help the mechanics, but the Japanese office workers stayed put in their office. The installation was finished on schedule the next day. “When we started the excavator and everything worked, the office door opened and my negotiation partners were overjoyed. If I had been satisfied with having closed the deal and done my share, there wouldn’t have been any further deals. A deal isn’t worth anything until the equipment is in use and the customer benefits from it.”

Photo: Janne Ruotsalainen
Translation: Lingoneer Oy

The article was first published in Finnish in Myynti & Markkinointi (MMA) -magazine, you can read the story in Finnish here.