Don’t assume macroeconomic indicators really indicate your customers potential.
Unless you are in the B2C market, you can’t take macroeconomic indicators too seriously. By picking target countries based on too high level metrics and not on actual industry demand tested by your team, you may fall in some of the traps originating in the nature of statistics leading to stereotypes, generalisations and wrongly assuming potential.
Macro researchers never research exactly your market and target segments. Country-wide statistics, such as GDP, employee numbers, investments, growth sectors, etc-etc often mask the details you need for prioritising countries and sales channels. Of course there might be correlation, especially in more mature markets - but when thinking about the global potential of your products, you need to figure out details and conditions of exactly your target decision makers.
Do think about industry driving factors and low cost tests.
First of all, if you understand well from your home turf what drives demand for your product, you are one step ahead to make educated estimations for unknown markets. These factors are most probably not measured through macroeconomic indicators - unless you are in the government debt business.
Once you have a few target countries (regions) in mind, run lean startup tests for business development: attend networking events and exhibitions. Spend money to get first hand insights. Talk to people living there and working in the given sector. Figure out the best way to test the waters without taking huge risks. For UK and Germany it can be attending exhibitions as it’s the primary source of new information for buyers. In other countries it can be meetups or chamber of commerce events. You can run a lean startup marketing campaign to test potential engagement levels like free webinars, creating new linkedin connections to name a few. It’s more work and human resource, but not necessarily more hard cash.
In every country you can find potential buyers. The question is how much will it cost to reach these leads? Also, in every country you can find the few clients that will work for you.
Don’t give too much weight to where you would like to live.
Have you heard of cognitive bias? We humans tend to focus on information only that supports our vision. In business situations this natural behaviour also takes its toll. One example is the CEO striving to relocate or live a glamorous life in an exotic country. This country quickly becomes the primary target market, more research is made and all the data on the world point to one conclusion: this is the right fit for us. This is of course a complicated and delicate situation since the CEO is also a human being and his performance and drive to lead may or may not be dependent on the target locations also... Still, when thinking about optimal business growth, we often see the irrational bias when thinking about countries to examine.
Another, less common bias is to tie company performance to the general attitude towards the country. If your company is doing great, you will fall in love with the place far easier, while picking the place and starting to hate the place because your business is failing.
Do think about countries as markets.
Start with the greater picture and move down to details. What are the benefits of any given market, what are the challenges? How much risk do the challenges pose? How can you mitigate all the different risks? If a market shows similar dynamic that you have already experienced before, you will have the advantage of knowing the future and accelerate. But this is just one example on how to pick the best market for your product or service. It can be data coming from desktop research, or even better: your own experience coming from low cost testing of markets (see previous points). In the end, if your product is successful, you’ll be successful as a businessman and probably happy about your success, regardless of the exact countries you are present in.
Don’t go all in on your first international exhibition.
All of us experience a burning urge to go BIG on the next event to be attended. To make the impact well deserved. You spend a lot on the visuals, bring the whole company to the event, reserve a large exhibition booth, because that’s what you have seen from others and a lot of companies you consider competition are doing this.
The costs are ginourmous and the hopes for closing the first deals are even greater. You often see new deals announced on the first day by the participating big companies. What no one tells you is that these deals were in the making for months if not years, they just choose to announce them at the event as part of the PR activity. You hope for the best, but all that happens, that your people feel great visiting another country or another city. It’s a great team building activity, albeit an expensive one.
Remember, sales is a profession and building sales is a marathon. Participating at an exhibition is only a step in your go-to-market marathon and not the finish line.
Do go instead to lots of exhibitions as a visitor.
Instead of going all in with your first, you should create a list of potential exhibitions and take one year to visit each. Create a checklist with professional help on what information to collect. This list of information will help you evaluate the different events, shortlist them and pick the few you want to attend. Typical information is: visitor mix (is it your relevant audience?), experience of exhibitors (talk to them), is the exhibitor mix the same year over year?, total cost, mix of exhibitors (if only large companies are present, it’s probably not for you), what were the best hacks, how is parking, commuting to the event. By getting this information on all events, and having first hand experience, you can pick the few that might work for you, and can start preparation with almost insider information and well in advance.
When we support our clients, we go even further by trying to create leads as visitors to measure how it might work if exhibiting on the longer term. You might not feel comfortable with this approach, but doing proactive networking or sharing leaflets in public places might not break the rules of the organisers.
Don’t start by hiring senior sales staff in the target country.
There is a strong belief in most companies that you need to have the appropriate sales network in order to be successful even with the first sales. A result of that myth is the general intention to start by hiring someone local first. Sometimes that approach escalates to the level where the target country is defined by “where do we know a sales guy that is well connected (or friendly)”. That’s completely wrong.
On the one hand if your current sales is really network-based (ie, generated through personal relationships), it means you don’t have a sales process in place and it will be extremely hard for you to judge the actual salesperson’s capabilities, even connections. On the other hand without processes it will be a hit and miss iteration until you find somebody well connected. Your risk will be extremely high and you will rotate through plenty of salespeople before you can find the successful one. On the long run this will represent a risk of your salesperson leaving and you having to start everything from scratch. And that goes on for every country you hire sales based on their address book.
Do consider sales staff based on their ability to fit in.
Sales transactions are of course highly dependent on the actual people involved. However, the right approach is to design the sales process first and hire for the process and the market. It becomes applicable and efficient in more markets and also governable by your management team. You need to find the right supporting salespeople fitting in your sales approach - and not the other way around. It is very tempting to follow all of the observations and suggestions of highly intelligent and savvy sales people - but often the optimal point is above the specific country’s level, resulting in compromises.
This does not mean, you need to have a stone written process, especially in the beginning. Test the process for every market and also fine tune both the process and the product/service offering for the given market. The latter we call product market fit adjustment - after the similar startup exercises. The aim of the process is to make your results pretty much independent from whoever is running it.
In addition you will have the benefit to have key conversion rates and KPIs to compare results with. Compare results for different markets and different salespeople. By using this approach you can pick the best countries, the best performing people, dissect their approach on the nuances and improve your process. Without a process based approach and KPIs that’s not possible.
If you are and SME/SMB/Startup make sure that you also have your own personal sales experience. Whoever runs sales can learn from your sales experience but more relevant to you will be the ability to judge the sales leaders performance, excuses, problems.
Don’t assume your customers on a new market react the same way.
Interestingly, even the greatest organizations have clearly wrong assumptions about new markets. Too much similarity is taken granted. They use the same segmentation model, same value proposition in all of the new markets.
However, countries and their economies differ greatly. One has a strong auto industry, the other is strong in pharma. Strongholds shape the general business culture, decision making processes and a lot of other aspects, mostly mentally. If a country is strong in industries with product lifecycles of 8+ years (cars, pharma, research), decision making will be slow, but rigorous, risk taking is not applauded. If you move to a country where digital sector is prevalent, decisions will be made fast, and delivery time, response time will be of paramount importance.
Do keep in mind a flexible attitude regarding your product, service and your approach.
Adapting to market dynamics, especially business culture dynamics is challenging but rewarding. Your product, being successful on other markets must have something in it, no doubt about that. But that something will change when you move to new markets. Being open to identify this difference will speed up the process of getting traction. You have to experiment and get back to school on learning from your clients and leads. See what they see, hear what they hear from your presentations and meetings. Build on the value you provide to your current clients, but be open to adapt to new expectations. Accountability, transparency might not be important in one market, while these are deal breakers in another.
Don’t believe sales is only possible with existing connections.
Going international comes with mindset challenges as well. In every sales department, the well connected perform great. You forget that you, or any member of your sales team started out as a nobody, without any network. As you grow older, your revenue is coming from existing accounts and most of your time you are just nurturing relationships and getting referrals from your network. You already forgot how to do ice breaking and look for sales with a contact book full of high potential clients and decision makers. The only problem is that you cannot judge salespeople by their contact book, and you cannot judge if their potential failure will come from the bad product or the low quality network.
Do create a sales process that works. With anyone.
Get back to the roots and create a process that works, no matter how experienced the sales staff is. In every new market you will have to retune your communication, the benefits, the value proposition and the sales steps. You have to be able to support your sales staff with expert advice. Either you or your sales director need to have an understanding and experience from previous, successful deals. The process ensures that you will have benchmarks in place to compare the performance of the sales team and its members. It’s easier to see where the problem lies, and what needs to be changed. With a network based selling, it will become a business of clairvoyance. Pipeline reports turn to Duck Tales, meetings to a show of smoke and mirrors. You don’t want that. Going international requires a process that is scalable to multiple countries, creates accountability and control, while providing transparency to your team.
Don’t underprice your product.
The urge to get the first customers acquired for a new product is strong. You believe that pricing is not that important for you as these first clients will create the trust you can build your future sales pipeline on (which is partly true). A common pressure also arises from the intention to undercut the prevailing market price - though usually the products are different, it’s tempting to see something similar and prove your value through lower price (immediately a contradiction, right?).
However, in most cases, low initial pricing can cause a behavioral effect called anchoring. This applies to your customers, future customers (if it was once public, it might be accessible to search engines and the internet wayback machine) and sadly, also to your sales team internally. People often have no idea about the value of a new product unless you tell them the relation range. If you ask $100/seat/month, asking $3000/month seems impossible to your team. We do not advise against lower market entry prices BUT you should always communicate clearly the reasons behind the opportunity to buy cheaper.
Do think about pricing as a strategic factor: a regular activity.
Pricing is not a one time activity. Market, conditions, costs, and rules change with time. There are tectonic shifts as the move from license+support based pricing to SaaS pricing. Not only these changes can affect your pricing. Revisiting pricing should be a regular activity and you should do A/B testing when possible to see if perception changed. Some researches claim that eg, SaaS companies who consider pricing as a regular activity reach 10x more customer lifetime value - being able to target the exact needs and serving more customers to their needs. By communicating that pricing will be reviewed each quarter, your team will get used to communicating new prices and constantly seeking new value.
