Use Poland to Reach Out to Rest of Europe
"Poland is the most pro-American country in the world," writes Thomas Friedman, the international columnist for The New York Times. Members of the trade mission found this to be true. Even on the street, a small U.S. flag pinned on your coat brings smiles and conversation. It seems every Pole you meet has some relative who lives in America or has studied in or traveled to the States.
Though Poles like the United States, the country they are trying to emulate is Ireland. Ireland's low-tax, high-tech environment produced an economic miracle in the 1990s that Poland hopes to replicate. On Jan. 1, the Polish corporate income tax was reduced from 27 percent to 19 percent, making it one of the lowest in Europe. The entire central and eastern European region represents more than 300 million people and can be serviced, for the most part, from Poland.
According to Germany's postal service, the DM market in the region is growing 20 percent a year. About the size of New Mexico, Poland is eight times the 5 million-person population of Denmark. The average person gets only seven pieces of direct mail a year. It is a nation with 13.5 million households, 3.5 million businesses and 9 million Visa cards in circulation. Visa does $17.6 billion in local currency transactions, and the Zloty is about 3.7 to the dollar.
In Poland, you will find a productive, hardworking labor force. As Edgar Fulton, senior commercial counselor at the American Embassy told us, "You get very productive labor in Poland. People are closing factories in other parts of Europe and coming here. You can run lots of shifts, and the labor market is flexible."
This makes Poland a good base to serve other parts of Europe. Inflation, long a challenge for eastern European nations, is down to 1.9 percent, but unemployment stays stubbornly above 15 percent.
The best news is that, according to Tomasz Kostyra, president of the Polish Direct Marketing Association known as the SMB (Stowarzyszenie Marketingu Bezposredniego), direct marketing is growing 25 percent a year. Major users of DM include telecom, insurance, banking, financial services, publishing and utilities.
During our time with Polish postmaster general Czeslaw Kowalski, he noted that books by mail are popular in Poland. Polish citizens are well educated and enjoy reading. A trip to the major department store in Warsaw will impress. A full two floors are devoted to books and magazines. Simply picking up the latest "Harry Potter" book will remind you of the differences in language. It is one-third larger than the English version. This is an important point to consider when adapting marketing materials into Polish.
Warsaw is a nice market, with 1.6 million people. However, regardless of where your Polish prospects and customers live, the Polish Post, or Poczta Polska, has very good delivery services for letters, catalogs and small parcels. According to independent audits, 81 percent of first-class mail gets delivered anywhere in the country the next day, and more than 90 percent of bulk mail is delivered in three days.
Small parcel delivery is also outstanding. And you don't pay VAT on the postage you purchase. Not true with private delivery companies. The unaddressed mail product is also widely used, but for best results don't drop all of your mail on the same day. Drop the odd house numbers one day and the even the next. Further, try to mail the same day that important utilities or banking statements go into the post.
Only 446 years young, the Polish Post started as a joint venture by the Polish king. He gave a contract to a businessman from Italy to transport mail between Krakow, Poland, and Venice, Italy. Today, Polish Post has 100,000 employees, 8,000 locations, 57,000 letterboxes, six domestic flight connections and two rail connections. The country is divided into 10 postal regions.
The Poles are less risk-averse than those in other parts of Europe. They have a growing entrepreneurial class, and we met many of them during our time in Poland. Men like Bartosz Mateja, who employs more than 200 in a one-stop shop direct marketing services company, or Tomasz Kostyra, the head of Polish DMA who had helped U.S. firms get started not only in Poland, but in surrounding countries.
"European law is written in Brussels, but the interpretation comes from Mars," Mateja says, with an entrepreneurial disdain for bureaucracy.
Why are other parts of Europe not creating more startups? European entrepreneurs face higher risks and lower rewards than their U.S. counterparts. The reward is lower because of higher taxes. The risk is higher because of the lack of venture capital, forcing entrepreneurs to depend mainly on commercial banks for startup money.
Poland has 2,500 troops in Iraq, behind only Italy, Great Britain and the United States. Also, they command additional troops from 24 nations taking part in the Iraq coalition. This demonstrates their commitment to NATO and to helping other people achieve the freedom they were denied for so many years by the Germans and the Soviets.
A good way to get a feel for the state of direct marketing in Poland is to go to the online store run by the Polish Post. There is a link from the British Royal Mail site, or you can go directly to www.poczta-polska.pl. Every vendor on the site has an obligation to ship the product you order within 24 hours, and this goal is reached 94 percent of the time. Titles and personalization are important when starting, building and maintaining your Polish database. This is a well-educated population with many people who possess advanced degrees.
The printers you use should be able to print Polish characters. Not only do you have to dot your i's and cross your t's, you have to cross the l's and dot the z's!
Poland is an excellent place to use as a headquarters to reach Europe's largest country, Germany, and the rapidly expanding nations of central and eastern Europe. U.S. firms that enter the market now will have an advantage over those who come later. It might be wise to put Poland on your business development list, especially if you are a service supplier or vendor to the DM industry.