Fail to make marketing work, and expansion into overseas markets will do more than falter. It might even cut away the opportunity to expand into the same markets in the future.
That was the message from our recent New York panel where we discussed taking high-growth US digital startups international.
An effective growth marketing strategy is a key tool in the arsenal of the business leader seeking to expand their company internationally. What are the key marketing challenges to prepare for?
… Is everything. Building operations in new markets is a waste if local customers aren’t aware of a company’s presence there. But the opposite is equally true, says Alex Calic, chief revenue officer of The Media Trust: “If you get marketing together ahead of infrastructure, how do you sufficiently follow up with the leads you’re generating from a consumer perspective, or servicing clients from an enterprise perspective?”
Marketing must mirror operations. Building a local team and infrastructure is essential to offer effective support to new customers. Doing so also offers instant on-the-ground feedback that too many expanding businesses ignore.
Failure to coordinate operations and marketing can cause existential problems for businesses, warns Calic. “You want to be ahead; but if you’re too far ahead, there’s going to be this huge gap where you’re under-delivering on the promise of your brand. You don’t want to do that, as you only get one shot at getting it right in a market.”
For international growth, first impressions count. “In the B2B space, a lot of companies that are buying a product or service are looking at time to benefit or time to cost-efficiency,” says Jon Williams, who has worked in senior international sales roles for Microsoft and LinkedIn. “If you’re not servicing the opportunity immediately then that time increment is only going to be increased. If you’re launching in a marketplace and building that reputation from the inception, that’s not the best place to be.”
Some marketing must happen ahead of expansion, if only to make initial sales possible in a new territory.
“It is important to get the brand out there before investing in operations on the ground,” says Evan Rudowski, managing partner of Atlantic Leap. “We’ve seen that with a number of clients, whose businesses are working well in the States. They’re growing and they’re confident, but they’re unknown in their new markets. This makes sales and business development much more challenging if nobody’s heard of them.”
Working with relevant media in new markets builds brand awareness, which can greatly enhance the success of sales campaigns. When The Media Trust sought to expand into the UK from the US, a report was commissioned, from a leading industry publication, to measure the problem of malware in UK digital advertising; this made prospective UK customers more aware of a potential problem that The Media Trust could help to solve.
This report was made available to prospects and launched at an event hosted by The Media Trust – in turn generating useful brand exposure that helped the business avoid that dreaded question in their first local sales calls: Where are you calling from, again?
“Many expanding businesses start out by using their US marketing materials and just sending them out to new local prospects,” says Evan Rudowski. “This does provide some credibility, but people like to see that things are happening in their market and hear from people who are using the product or service. Getting a case study and testimonials from the market, and getting out there and promoting the brand by working with local media makes a difference.”
Sending US marketing materials to non-US prospects at best shows a lack of effort in understanding the challenges faced by regional customers. At worst, it can be interpreted as a business seeking to educate local markets on the “American” way to do business. Neither helps.
Cultural sensitivity is essential to all successful localised marketing.
Moreover, sales and marketing channels that work well in US markets may not do so abroad. In Japan, for example, consumers expect to buy goods from local resellers; Nordic consumers are more comfortable with automated campaigns. Improved cultural understanding can demand changes to a product or service. eBay failed to crack Chinese markets partly because its local competitor – Taobao - offered users chat functionality, more closely imitating physical transactions in Chinese marketplaces.
Ultimately, differences in cultural expectations can drown a business entering a foreign market first time. Uber’s exit from their German operations was well publicised at the time – coming into conflict with a culture more supportive of regulation, already well-served by local taxi startups.
Investing in localised customer support early on can help businesses overcome cultural roadblocks. “We have clients ask, ‘who do you have in my timezone?’, even though we’re available 20/24 hours each day, online,” says Alex Calic; “They want to be able to call our guy in Spain or Hungary because if they really need them, they will fly them to their office.” Businesses should be able to offer – at the very least – telephone support to local clients, in the client's’ language. Customers should be able to make payments easily and securely in their own currency.
Successful marketing for international expansion requires three things: well-considered timing; brand exposure to precede sales campaigns; and awareness of cultural norms in the target region. Most of all, overseas growth requires US businesses to put themselves in the shoes of their target customers, making it as easy and advantageous for them to accept a US business as a local market player.