Business Lessons From Thailand
I am writing to you from a deckchair in sleepy Chiang Mai. I have been here for two weeks with my better half, who will return to Brisbane tomorrow to take on a new job. I’ll continue travelling and working from my laptop for another two weeks.
Prior to spending this time in Chiang Mai, I had visited Phuket for three weeks last year. I love the Thai people, their culture, and their beautiful land.
As I soak up the culture and the sun, I also take note of the business. It’s unavoidable, really.
In a land where competition for tourist Baht is incredibly fierce, I have noticed some very clever, and simple, business and marketing strategies that are employed by the best (and copied, to varying levels of success, by the rest):
1. Charge a low entry fee and then upsell
Upon landing in Chiang Mai, we didn’t even have to exit the airport before we were approached by a taxi driver. He said he would deliver both of us to our guesthouse, about 20 minutes away, for 120 baht (approx $3.85). I could have bargained that down, but it was cheap enough (in fact, we ended up tipping him). During the ride, he made small talk with us, and asked us our plans (of which we had none).
With great pride in his town, he told us about the various attractions, and one in particular that he considered quite special: a temple at the top of a mountain, and then up a further 306 steps. He told us that most tourists don’t visit Doi Suthep at night, and he showed us a photo from its look-out. He was right: it was spectacular. By the time he dropped us at our guesthouse, he had given us a flyer for the temple, and told us that he’d take us the thirty minutes there and then back again for 800 baht ($25) and we could stay as long as we liked.
The next day I called him and set it up.
This is the same technique used by multi-millionaire online entrepreneurs. They will offer you something dirt-cheap first, and then upsell you later. The initial fee is usually just enough to cover their advertising costs, and once you’ve bought from them, you’re on their highly targeted mailing list. Once there, they can start building rapport and promote higher ticket items.
2. Use testimonials to establish credibility
A tourist wandering the streets of Chiang Mai will walk by plenty of Tuk Tuks (similar to taxis). If you look like a wandering tourist on holiday, they will offer their services to take you around their city to view the attractions, usually at a very good price. 40 baht to see the temples? Sure, why not. So after temple #3, I’m presented with a notepad of testimonials, flipped open to two signed by Australians, and told that they were written by those who had employed him for his full-day tour.
The tailor that we visited also presented us with testimonials – as soon as we’d entered the door. In this particular case, we had been referred to this tailor by a New Zealand university teacher who was adamant that this place was the best in Chiang Mai for tailored clothing.
Quite by chance while we were there, the teacher arrived to pick up his new tailored jacket, and it did, indeed, look good.
I would give them big points if that was staged.
3. Attract your audience and then pounce!
It was actually quite by chance that we had stumbled across the tailor to which we were referred. We hadn’t gone looking for it that day. We weren’t even going to go in that particular day, but there was a free map outside the shop and I needed my bearings.
As soon as we approached, a sales girl rushed out to help us with our map-related query. I decided to ask where the post office was, and Vanessa was shown in great detail. Once that was sorted, we were then invited into the shop, “Just for look.” From there, it was assumed that we wanted tailored clothes, and we were presented with fashion books from which we could have anything made.
Half an hour later, Vanessa was measured for a suit jacket, skirt, and pants; and I had agreed to try one business shirt at a discounted rate. That afternoon, we returned for our fitting, and for the first time in my life I had a shirt that fitted me, and my short arms, perfectly. I ordered two more and two casual pants.
Another example is the cafe that I frequent in Chiang Mai for its free wireless Internet access. It baffles me why they don’t promote it. I found out about it quite accidentally, but it meant that I kept coming back and ordering more food and drinks while I worked away on my laptop in blissful air conditioning.
4. Focus on one quickly- and easily- replicable product or service
Thailand is a place where a street vendor can and will specialise in one thing only. Sports socks, for example. You wouldn’t pick it, but apparently there is money to be made selling ankle-high sports socks, and only ankle-high sports socks. Oh, there is variety in ankle-high sports socks: you can have Nike, Adidas, or Reebok, and all the different colours and designs but, at the end of the day, they’re just socks.
The pancake (“rotee”) vendor makes only pancakes, too. Different flavours, but they’re all just pancakes.
In the same vein of beautiful simplicity, there is a book shop down the road from our guest house that sells used books, all for 99 baht. All books, all 99 baht. How simple is that?
One of my favourite Thai restaurants is Just Khao Soy, whose main dish is – you guessed it – just Khao Soy, a noodle soup served with your choice of meat, and accompanied by about eight different condiments to change the flavour as you like.
5. Establish business alliances (How Tuk Tuk drivers and tour operators really make their money)
Just as the Internet moguls make their real money from back-end sales, Tuk Tuk drivers make a significant portion of their money from commissions. The tourist factories make their sales because Tuk Tuk drivers and tour buses bring tourists to them. So, as an incentive, they pay a commission for every tourist who spends five minutes or more in their shop or factory. It’s a bit like pay-per-click advertising (e.g. Google AdWords), but off-line.
The more advanced operations pin ‘gifts’ to your shirt on arrival. These gifts are usually a coloured flower identifying you to your tour group. If you then buy something, they can assign a sales commission to the right tour operator. This is akin to Clickbank and other online affiliate programmes.
6. Put your customers on a buying pathway
While in Chiang Mai, we visited an elephant training camp where we saw an elephant show and took a ride on an elephant. While we had already paid our tour fee, there was always an opportunity to hand over more money. At the show, we bought bananas (40 baht) to feed the elephants; and during the ride, we were told on four different occasions that the elephant was hungry (and thus that it was time to hand over another 20 baht for more food).
This is another example of upselling, but my point is that as customers we were on a pathway set by our tour guide. Furthermore, we weren’t just given the option to buy more, it was guaranteed that we would. Were we going to deny the hungry elephants their food to save 20 baht? No way!
To see an example of a Brisbane-based retail pathway, visit Photo Continental in Mount Gravatt.
And here are a couple of extra, quick observations:
1. Smile and your customers smile with you
Most Thai people work hard and for long hours, and yet most smile more easily than a waitress in a comparatively cushy Coffee Club job. Those who smile on my approach and treat me well get my repeat business.
For those of you who have staff serving your customers, make sure your staff are friendly and happy. Whether I’m in Brisbane or Chiang Mai, I don’t return to a cafe or restaurant whose waitress couldn’t even muster a smile, and clearly wanted to be at home, instead, watching Sex in the City.
2. Sometimes a small difference is all it takes to tip the scales in your favour
Whilst looking for a Thai cooking school, Vanessa and I visited a tourist office where we were presented with three different brochures. I couldn’t get a clear answer out of the assistant as to which one was best, but after a few questions, we had established that “Thai Chocolate” offered essentially the same service as the others, but were more flexible. They also had a more professional-looking brochure than the other two, and that inspired the confidence needed to tip the scales in their favour.
Here’s wishing you happiness and success in your endeavours – business or otherwise. If you get a chance, take a break and visit Thailand!
— James Quinn-Hawtin is a multi-award-winning web designer with 10 years of experience. His passion is learning about, teaching, and consulting in the area of e-business. He is the E-Commerce lecturer at Queensland University of Technology (QUT) in Brisbane, Australia. His website can be found at http://www.webnerd.com.au.
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