Written by Sean McPheat |
23 November, 2012
Relatively few companies have cross border business, and fewer still are global. In the U.S. less than 1% of firms export and of those, two thirds export to only one country. Contrast that with European countries where the percentages are much higher. Five percent of Swedish companies export and over 50% export to multiple countries. Part of the difference is logistics, part is mindset and some is business necessity. Increasingly companies all around the world are recognising the opportunity – and risks – of selling into new markets.
Becoming international and selling to customers in a few new countries may seem daunting, whilst being global and selling in multiple countries across continents could seem nearly impossible. It’s not – and here are some top tips and a process to help accelerate your success.
1. Do Market Research
You better have a special product or service that is hard to get in other countries, otherwise why would people there buy what you have rather than buy it locally? They won’t – and so make sure that each market wants what you’ve got. Do primary and secondary market research before dipping your toe into any market, rather than jumping in and finding out later that they’re just not into you.
2. Prioritise Market Entry
Often the first cross border sale is almost accidental. Suddenly some customer in Germany buys, and the next thing you know you’re international. So do you plunge into Germany, or some other country, next? This is where you should take a step back and evaluate your options, prioritise market entry, create a strategy and plan. Where will you be most successful, and where is the lowest hanging fruit? Reach out for that and pick off the best ones first as part of a global growth plan.
3. Utilise National & Other Resources
Your country almost certainly has export assistance programs that will support your cross border expansion. In the U.S. nearly all states are participating in the Department of Commerce STEP programme that reimburses companies for many sales and marketing expenditures as they grow globally. Talk to your local government groups to see how they can help support and supplement your efforts.
4. Put Marketing & Sales First
One of the biggest mistakes we see companies make is to worry about infrastructure first and put marketing and sales last in their thinking. It should be the opposite way round – you need to know how you will best go to market in each of the countries you wish to sell to. You need to know whether your sales be direct or indirect, how you will position your offering for optimum results and what your marketing strategy and plan is.
Sweat the details with marketing and sales first and then build the infrastructure such as offices, administration and legal policies to follow that. As with most areas, get feedback from experts who have been there and done that, like Growth Nation! Many new opportunities can be gained through experienced eyes.
5. Make Sure You’re Covered Legally
Your intellectual property, cross border contracts and other legal issues should not be an afterthought. They need to be thought of before you have conversations with potential partners. Get your legal position understood in each country and proceed once that is taken care of. Especially with your intellectual property, be protected today and down the road consider using legal experts who are familiar with the countries where you plan your expansion. Get that set before your first conversation in each new country.
6. Get Logistics & Financial Details Handled Properly
With any product moving across a border, make sure you work with a freight forwarder and logistics partner that is working in that country right now – and do just leave it to learning as you go. They should be familiar with your product family and segment, and keep you ahead of any potential problems along the way to the customer. Similarly the payment process all the way back through to you should be well understood and set in place before you go jumping in. Your bank should be familiar with working in each country. Pull in the experts to get you prepared for problems that can and will occur.
7. Select Partners You Can Count On
Define the kind of distribution and business partners that will work and then carefully select them in each country. Again many countries have resources that can help – such as the Gold Key programme with the U.S. Commercial Service. The Gold Key is a good value that allows American companies (for a small fee) to have potential partners vetted and prepped before your arrival and prior to market entry. This takes away uncertainty and reduces the risk of selecting the wrong partners.
8. Be Cross-Culturally Savvy
New country entry will almost always include some sort of cross-cultural issue that can bite you and your business where it hurts. Does a cultural issue preclude the use of your product the way it was intended, or is the product name sub-optimal, or does the description require more than just a standard translation to appeal to the local sensibility? These are all issues that can lead to unpleasant surprises that derail not only growth in a country, but stall globalization overall. Keep cross-cultural issues in mind by testing, researching and pulling in those resources that can judge what you have from a local perspective.
9. Be A Global Marketer
Beyond starting with marketing and sales in your plan, fully embrace marketing in each country as you implement your country entry plan. Make sure your website is locally compatible with all the right bells and whistles including being readable on mobile devices. If you have an eCommerce site, make sure that the right currencies are included and that you’re prepared well ahead of time to handle that on the backend. Since you’re building credibility in a new location, focus on testimonials that matter and quickly build up local testimonials that will mean more in each specific country.
10. Adopt A 24/7 Mindset
As you grow in country after country and across continents, you’ll find that a 24/7 organisational mindset is essential. How you individually handle that is up to you. You’ve got to sleep sometime! Find the right balance between making connections in your new markets with your own sanity of managing multiple countries.
I suggest erring on the side of overextending yourself at least in the beginning, because so much can and does go off the track – and you want to catch things early before they become problems. Spend extra time with your team all the way through to make sure they ‘get it’ and understand what it takes to be global from start to finish. That’s a big deal – and I’ve found that it takes extra effort even in bigger companies.
Your global success depends on orchestrating the team’s ability to withstand the rigors of international and global business. With extra planning and by relying on experienced professionals who have learned from past experiences, you will accelerate global growth and success. Grow globally with less risk and more confidence by considering these 10 points.
Guest Blog By Doug Bruhnke, CEO of Growth Nation
Founded in 2001, Growth Nation supports companies around the world with marketing and business services to help them grow across borders and globally.