Different cultures provide wide ranging sales challenges
Edward Queffelec, Tim Barber, Andrew Pearce, Peter Dahm, Mike Hamlin, Rene Cardona, Gabriella Somerville, John Hopkinson, Jay Mesinger, Larry McElyea and Jolie Howard have a lot in common. They are among aircraft sales specialists who have built up techniques over the years to ensure they take different cultures as well as individual needs properly into account.
Peter Dahm worked from January 2005 to build up the helicopter team of Avinco Ltd, a company created in 2004 with the focus on trading with commercial aircraft and helicopters.
Dahm says: "This involved both buying and trading in and reselling as well as remarketing, brokering, consulting, organising and managing major retrofits. On the helicopter side Avinco has a formal and very close cooperation relationship with the Eurocopter group, although there is no link on the shareholder side."
He says: "Of course there are different spirits and cultures depending on the location of a client which can vary from being a commercial operator in Europe to an oil and gas operator in Malaysia. We, for example, have a team of young people who have worked in various parts of the world for several years."
Potential upsets range from unexpected technical problems popping up during a client's inspection to financing being delayed or collapsing. Dahm adds: "With the need to support and 'get it redone,' stress is certainly part of a real salesman's life."
Andrew Pearce, regional director of the Innotech-Execaire Aviation Group, confirms: "Of course you are dealing with different individuals from different nations who have varying cultural views and methods of doing business. The contrast between the requirements of say a Russian and an Arab is marked. Beyond that each transaction has a seller or buyer with different expectations and needs. These differences will drive the nature of the negotiation and this is where the skill of the aircraft broker comes in.
"Problems can vary enormously from a sudden family bereavement or unexpected exchange rate fluctuations to over-sensitive lawyers. However, the most common event or 'gremlin' can be a finding in the pre-purchase inspection which is of an airworthy nature. Even the smallest item that is easily repairable or fixable can often un-nerve the buyer who will then go and look at an alternative aircraft."
Pearce says: "Personally I enjoy the variety of dealing with different individuals, different cultures, different aircraft types, time zones and locations. It is what makes the job very interesting. Depending on the nature of the deal and your clients' needs and expectations, it can indeed be very stressful. Your days going through a deal can be a rollercoaster ride of emotions. There are great highs when things are going well and deep lows when it seems a deal is struggling. However, you have to be philosophical and find a solution to ensure a successful conclusion is reached."
Rene Cardona, an aircraft sales representative for Duncan Aviation, Inc, says: "There are lots of intricacies present in the pre-owned aircraft market and you need to be able to understand those and work hard for your clients. If you can do that, you can be successful in this business. In addition to English, I am able to speak Spanish and Portuguese. This multilingual ability has been instrumental in numerous international transactions. And aviation has certainly grown internationally over the last several years, not just in Europe but in South and Latin America as well."
Cardona adds: "The bottom line is that selling aircraft is a relationship business. If I know my client well, know what they want with and in an aircraft and understand their preferences, I can develop a long-term working relationship with them. That means that when they are ready to upgrade to a different aircraft or add another aircraft to their flight department, they are familiar with me and my work ethic and I am their first call."
Customers in different countries do have different expectations and negotiate in different ways. Cardona says: "One of the primary differences is in the buyer's or seller's relationship with their acquisition or sales agent. The buyer out of Europe, Asia or South America is more predisposed to do the transactions themselves without the assistance of an agent. This leaves them in a weaker position as they may not know the ins and outs of aircraft transaction process."
Cardona concludes: "The successful aircraft salesmen live a relatively good lifestyle, although it is a somewhat stressful career. The ones that have been doing it for a long time can more than likely be deemed successful. Therefore they have been able to balance how they deal with their clients, and have learned to come to terms with the industry's ups and downs."
Gabriella Somerville says: "Cultural awareness plays a major role within the aircraft sales arena. The art of negotiation is to understand your clients' DNA: that includes their emotional, behavioural, cultural beliefs and patterns. Successful communication is key to securing the relationship between the client and broker, the broker can then position their approach and tailor their strategy – making the seamless transition and conversion.
"Multiple chains create hurdles which slow down the whole process. The deal can be lost in the brokers negotiating room when everyone is positioning their cut – before you know it the buyer has disengaged. We need to be less greedy, learn to negotiate quickly on terms of engagement and unify to create a seamless transition for the client."
Somerville advises: "As a broker we have to remain sensitive to the client: he or she will give clear indicators throughout the course of the engagement, allowing the broker to understand when to put the pressure on or ease off. Timing is everything in sales. The lifestyle can be excellent dependent on how good you are – and the stress levels can be reduced if you take your foot off the accelerator and enjoy the journey."
Jay Mesinger says: "As we all explore and work to gain the awareness of many of the emerging markets, we as sales professionals must also learn and understand how to work within the cultural differences. I am in the people business. It is incumbent on the sales professional to keep emotions at bay and keep both buyer and seller and all of their representatives focused on the successful outcome."
John Hopkinson of John Hopkinson & Associates Ltd confirms clients in different countries do have different expectations, especially on the future maintenance status.
He says: "We frequently run into pilots looking for commissions under the pretence of being a broker, when in fact they don't have the broker experience, background, or source of support necessary. The second most common gremlin, which is becoming a deal breaker in the United States and in Europe, is the extensive authority given to lawyers in preparing aircraft agreements and making decisions on these. A good purchase agreement is necessary for an aircraft acquisition or sale, and in fact a requirement by many corporations. However, lawyers now after properly and purposely creating these documents wish to be involved in the closing, to a point where they interfere frequently with a transaction, and create excessive fees. This is not a problem with established aviation attorneys who have a loyal, successful following."
Michael Hamlin, md of Hamlin Jet, says: "In northerly latitudes a deal is viewed as being a compromise that both parties agree with. In these circumstances an email or verbal agreement almost certainly means the sale will go ahead. However in more southerly latitudes this is not always the case. Here a sale negotiation is regarded as more of a machismo contest that must be won – and this can lead to goalposts being moved at the last moment. A different approach is needed depending on the cultural background of the buyer.
"My biggest problem has always been with a buyer using a property or commodity lawyer to deal with the contract rather than an aviation lawyer."
Hamlin adds: "In a good year life is great and in a bad year it is like trying to fish in a dried up river bed. Sometimes it only takes one good deal to make a year – and the salesman lives a life of stressful neurosis worrying that he might miss that 'one important call this year'."
Jolie Howard, a director of business development with TAG Aviation, says that different cultures hugely affect the sales process but lack of flexibility is often the greatest barrier to completing a deal.
Larry McElyea of World Aircraft Trading confirms that knowing what to expect from each country is essential in dealing successfully in a variety of different countries. "The deals are actually very similar but if you are not prepared for the subtle nuances which make a huge difference, they could destroy the deal," he warns. "Mexico is vastly different from South Africa and neither is like negotiating with Europe."
McElyea points out: "Getting aircraft out of different countries can add one to three months to a closing. Getting aircraft into countries can be lengthy and can add over a year. The longest process for me has been 18 months with a CRJ. The shortest was four days on a Citation CJ1."
McElyea says that if either the buyer or seller is suspected of not being honest, this will end a deal quickly. "If I suspect this and confront the party with as much tact as possible and it isn't corrected, it is best to walk away before anyone invests large amounts of money in the deal. Life is too short to spend time in court rooms as it keeps you from making a living selling aircraft."
He adds: "If the seller has been honest, yet corrosion or damage history pops up in the pre-purchase inspection, then it can bring everything to a halt. If this is dealt with early on in the sales process, then it will not be a surprise and the deal will continue."
McElyea says that the sensible approach is to balance health and income. "When I first started my own business, I worked 16 hours a day and made good money.
"I noticed this was affecting my health. My blood pressure started going up, heart rate increasing and fear about the future was eating at me. I decided my approach would make a nice sum of money that someone else was going to spend. I made changes and while I might not get as many deals done, I am much happier and healthier."
McElyea says most clients do expect a test flight just prior to the pre-purchase inspection. "I usually try to get the buyer's pilot to ride on the flight to the pre-purchase site, and this will usually satisfy the requirement. If the owner needs to have a demo flight, and some simply will not buy an aircraft without one, then this is carried out just before the pre-purchase inspection as well."
He advises: "Being open and honest with your clients will bring repeat business. About 85 per cent of my business comes from repeat customers. It's been working for the past 20 years and I suspect it will continue to work for the next 20 years."
Language skills can be crucial in helping to establish rapport with an international client base, according to Tim Barber, md JetBrokers Europe. "Each nationality has its own way of conducting business so it smoothes the process if we can demonstrate that we're willing to try and adapt to the national culture," he says. "Speaking to them in their own language can help reduce some of the anxiety that may be associated with a significant sale or purchase like an aircraft."
The company supports operating in different countries by offering a multi-lingual website which provides information in English, French, German, Italian and Spanish and has a team that can support deals in each language.
"There's no real reason why a deal can't complete in days rather than weeks but this rarely happens," Barber reports that in the current economic climate the marketing process can take months and buyers sometimes hear of another deal even after they have made a commitment to your aircraft, which means the whole process can take much longer than is necessary. "We've begun talks with some buyers who then find another deal, yet come back to us six or nine months later as they still haven't found what they've been seeking," he says. "Other reasons for deals to stall include issues discovered during the pre-purchase inspection, and in recent years the inability to finance a deal has been more prevalent, although we're beginning to see a few small changes in that area."
Brendan Lodge, JetBrokers Europe bdm, says: "There are still many people in the market who believe that every vendor is a distressed seller and consequently they take a lot of a salesperson's hours without any serious commitment to purchase. Rarely do they complete a deal and this can be frustrating and stressful for all concerned."
Lodge adds: "When we have a customer who is interested in an aircraft that's just not suitable for them, we work hard to guide them in the right direction by taking them through a questionnaire that enables us to establish what their mission profile is and thereafter recommend the most suitable aircraft based on science rather than emotion."
But there are sellers that just won't see the reality of the market and want to price their aircraft too high. It then sits on the market for a lengthy period and distorts market statistics by increasing average length of time on the market and inflating sales inventory.
Edward Queffelec believes globalisation has had an effect on the buyers of jets. "We see less and less difference in buyers' profile and behaviour around the world. We still see some minor cultural specificity but nothing significant: Russian customers are always looking for very recent aircraft which is usually not an issue for Middle East customers."
He adds: "Europeans care more about landing and take-off performances as they take into consideration demanding airports such as London City, St Tropez La Mole and Lugano." Queffelec says the arbitrary setting of a price that may be disconnected from reality can prevent a sale. "I have seen a deal not happening because the seller and the buyer could not resolve a US$50,000 price difference on a US$20 million aircraft." He adds: "The shortest process I have ever seen was six weeks between when our customer told us 'I would like to buy a Global Express' to when he experienced the aircraft. However, I remember another customer who really took his time and three years passed between his first enquiry and his first flight. He was simply not sure of what he needed. Finally he now has an aircraft he loves to fly with, that perfectly matches his needs, and that he obtained at great pricing conditions."
Queffelec says that the internet has helped clients strengthen their knowledge of private aviation. "We have much better informed customers. The aircraft salesman's task is not just to locate an aircraft but find the best deal which involves bringing strong technical skills to the deal. Sometimes this involves explaining why we did not pick up this 'great looking aircraft' on the website, as the client might not realise that a heavy maintenance is due shortly, that the aircraft has a damage record, or even that, due to some STCs, the aircraft can never be registered in the desired country."
Queffelec adds: "Around 90 per cent of our activity covers pre-owned aircraft even if we sometimes negotiate on behalf of our customers in front of the manufacturers for new aircrafts. Clients seem to appreciate not being alone in front of the factory and want to have technical and commercial assistance by their side for the duration of the process. However, I have to say that, considering the pre-owned market we have seen in the past years, it has been much easier to be a specialist in that sector.
"The level of activity, even if the prices have been really low, has always been surprisingly quite intense all through the economic crisis."
Aircraft selling involves many facets, but it is firstly a people business where an understanding of cultures and requirements can make the difference between success and failure.