Many years ago, I met Richard Garfield at a lovely coffee shop in Montevideo called Amaretto (it no longer exists but the memory of its dulce de leche milkshake lingers on). Richard is probably the most experienced British consultant specialising in Latin America that I’ve ever met. He started his career in the region back in 1976. I wasn’t even born then, so our discussions were always enlightening for me. During our friendly chat, he said something that has proven more memorable to me than the Amaretto milkshakes (and that is quite a statement): “The River Plate”, he said, referring to Argentina and Uruguay, “is an amigocracy”. It made me chuckle but I understood exactly what he meant, and it actually applies well to the whole region.
A few weeks ago, a client told me that Latin Americans are said to be price-driven but that he was totally convinced, after working in the region for a few years, that we are actually more relationship-driven. He was convinced that relationships are more fundamental in decision-making processes than quality or price here. Having worked 10 years in business consultancy in Latin America, I can see his point. “It doesn’t matter how good or cheap your products are, if your distributor doesn’t have a good relationship with the main accounts in their country, it will be an uphill struggle. Price is important but the customer will pay more to buy from someone they know and trust”. He also made an important point: relationships open doors, and in order to have price discussions, you need doors open. I couldn’t agree more.
And it is fundamentally important for anyone doing business in Latin America to grasp this. When we say that business in the region is personal, it’s not a cliché, we mean it. Latin Americans are very sociable and for us our business and personal lives are much more intertwined than in other cultures (definitely a lot more than in the UK, where I lived 13 years, for example). There are good reasons for it, too, and if you explore this in some detail, you realise that it makes sense. Amigocracy is about trust and accountability. It’s also about reliability, service, support. It’s about the long-term consistency that regional economic, institutional and political structures often can’t give you.
But if you have no “amigos”, what do you do? First, you find someone who does. And you value and nurture them, you support them fully and you treasure them. I can’t say this enough.
You also need to take some time to understand this amigocracy thing. Believe me, it will pay off. It will explain why a distributor makes certain investments or favours certain marketing techniques. It will also explain why they approach direct sales in ways that are maybe to round-about for you or why they don’t take 2 minutes to reply to your emails yet can spend half a day discussing football with someone at their trade show stand. Amigocracy explains why when we need something we ask someone, rather than research online. Once you understand how this all works, you can adjust and plan accordingly. Amigos first. Always.