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The International Entrepreneur – On Global Product Marketing

International Entrepreneur - Global Product Marketing

Global Product Marketing is a rapidly evolving field, yet for many growing B2B technology companies a full-time product marketing manager is not yet justifiable full-time position. Still, it’s never too early to begin incorporating product marketing into any B2B company’s approach to product development, sales and marketing messaging, and competitive intelligence. This article focuses on core global product marketing functions and how to make smarter business decisions from a fuller set of data and perspectives.

I first encountered global product marketing at a healthcare software company located north of San Francisco, California. It was in response to a business disaster. 150 product development professionals (nearly 100% of programming hours) spent a year developing a new order management system for hospitals. The only problem was that when the software product went live, the company’s healthcare clients hated it. They said they would never be able to use it. The company needed better product direction that was truly aligned with market demand. They hired 3 product marketing managers – 2 registered nurses and 1 technical staff – all with healthcare informatics background. The next try at order management proved to be a greater success, along with additional products and upgrades sold worldwide.

The problem with the California healthcare software company was one of isolation. The software development department was more than two thirds of the company headcount and stacked with PhDs who knew architecture, coding, etc. on every level. But no one thought to ask current clients what they wanted. No one bothered to find out features and functions of competitive products. Build product in a vacuum and you are very unlikely to hit the mark.

 

What Are Proactive Product Marketing Functions You Can Start Adding NOW?

I still run into CEOs of US$50M companies who have no clue that the value of marketing goes well beyond handing out company-branded swag at a trade show or printing a brochure for sales to leave with prospective clients. Product marketing is just one area, but here’s what you can start doing even before you reach the point where product marketing staff can be hired:

  1. Understanding the uses of your product and purchase motivations across all global markets.
  2. Leveraging company competitive advantages.
  3. Gathering and Analyzing international competitive intelligence.
  4. Looking at trends and other changes in the competitive, regulatory and industry environments that will affect sales.
  5. Providing key marketing insights into the product development process in the early stages to help define product features and functions that will best serve current and future clients.
  6. Creating messaging for sales, marketing, partners, and company executives to stay on point not just at home but in all markets.

 

Tips for Great Product Marketing

Product Marketing is a field that attracts professionals from technical, marketing, analytical and research backgrounds. Here is my advice to making the most out of any product marketing project:

  • Ask questions, even when you think they may sound stupid. This is particularly key in global markets. We often assume that other markets buy and use our product for the same reasons as the home market. There can be any number of reasons why that would not be the case. Any number of corporate casualties have littered the global business landscape with their failure to adapt.
  • Listen proactively. It is not enough to ask a good question, but the answer may lead to the right follow-up questions. This can sometimes lead to uncovering a new market segment or product use, among other valuable insights.
  • Stay on top of trends affecting your markets. Set aside time each week to know what is happening in your industry. Is a competitor releasing a major product? Does a new regulation in Germany now reduce access to that market? Is the latest economic downturn going to affect market demand for your product? Knowing what’s coming can help your company to prepare.
  • Follow your curiosity into the data and with industry experts. I once uncovered a $24M market for a software company just by noticing a trend in existing company data and making a phone call on a hunch to a professional colleague I know from Twitter. To ask some dumb questions. Follow those hunches!
  • Form strong relationships with product development staff. Instead of dictating product features, functions and appearance, it is better to partner closely with product development to jointly problem solve on key product definitions.

 

Product Marketing by its nature is proactive. Instead of waiting for competitors to leap ahead in product development or wondering why competitors are gaining market share or why the sales close rate has fallen, it is time to take control of your company’s destiny and growth path in a more systemic way.

Onward & upward!
Becky
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The International Entrepreneur – 7 Warning Signs of an Undersized Marketing Department

Warning Signs of an Undersized Marketing Department

 

Marketing has earned a “money-wasting” reputation over the years from many a Gatsby-like marketing leader. But sometimes the pendulum swings too far towards austerity too. There can be a high risk of missed market opportunities or that the current team just can’t “balance” it all. Here are a few examples from my experiences:

 

Marketing as a Dirty Word

Marketing Manager, “Bob” looked almost hobbit-like as the mountains of folders, papers and marketing paraphernalia boxed him into his undersized office. This WAS the marketing department for the mid-sized engineering firm. Maybe this was acceptable if the firm was retaining clients and gaining new business based on reputation, but the top competitor in the industry had eclipsed Bob’s firm like a Ferrari passing a fiat on an Italian motorway. Bob knew what would turn around the current sales slump, but who was going to listen to one of the few company employees without an engineering degree?

 

The Never-Ending Marketing Project List

In another B2B technology company a few thousand kilometers away, “Rick” can barely contain his frustrations with the company’s marketing department. Rick asked the marketing department weeks ago for the materials he needed his presentation in Singapore to a top prospective client. Marketing is always behind on requests as VPs continually rearrange marketing’s priority list, leaving Rick and his colleagues to create their own materials, messaging and presentation. There is always a risk of getting caught going off “brand”, but Rick would rather “beg for forgiveness than ask for permission”. It’s worth it if he can close the Singapore deal.

 

The Marketing “Ferrari” That Stalled Out

Still another company thousands of kilometers afield, a B2B enterprise software company with USD$100 million in annual revenue quietly admits that as part of rebuilding the company with new private equity, they currently have no marketing staff among their 1,500 employees worldwide. None. Existing clients remain happy paying their ongoing subscriptions. But market share is dropping as competitors smell blood in the water and investors expect to see returns soon.

 

How do you know if Marketing is too small?

Over the years I have seen various versions of undersized marketing teams. In some cases, company leadership ignore the marketing function altogether. These are the companies that seem genuinely perplexed when competitors eclipse their global market share. Here some signs:

1. Marketing staff become order takers for collateral and other marketing tools for sales and other departments.
This is actually a marketing leadership issue as well. A good marketing director, VP or CMO can set the department’s priorities and devise strategies for marketing assets to be easily templated and customizable in various markets. As Canadian international marketing expert Doug Taylor added this week in Twitter: [Undersized marketing teams are] “unable to respond to real requests quickly, scatter gun approach to marketing, lack of research capability”.

2. Online assets like the company website and social media accounts are underperforming and not driving or nurturing leads.
In the cases of all three example companies, their websites yielded poor SEO, few sales leads, or branded positioning as market leaders. All three had no social media or only placeholder accounts that again had no real value to the company.

3. Sales team trying to do marketing tasks such as defining messaging and creating their own marketing collateral.
A company is strongest when their sales and marketing teams are both fully utilized. The best sales teams focus sales staff directly on sales interactions instead of creative marketing projects.

4. Inconsistent messaging and branding in various sales channels.
No where is there greater risk of losing control of your brand as in your global markets. An established global marketing team can help rein in renegade staff and partners.

5. Outsourcing long term even the most basic functions and paying contractor rates.
Plenty of marketing firms would be happy to perform even the most mundane marketing tasks for your company. Believe me. But there are two major issues with the Outsource-Your-Marketing Approach. First, your interests and your marketing firms interests may not always align. And second, it’s expensive compared with hiring marketing staff to take care of at least the basics of strategy and program management. Outsourcing limited specialty projects can actually be a great way to expand marketing’s capabilities.  

6. Lagging behind the industry expansion rate.
I work mainly with software companies in expanding global markets. More than one company in the field has bragged about high growth rates with little marketing efforts. But on closer inspection, it was really a market growing at a fast rate. Their relative market share was less, which may matter later when the company owners want to exit.

7. Any competitive information is basically hearsay from the sales team.
Sales staff actually gain a great deal of competitive insights from their conversations with leads and clients. But relying on 2nd hand anecdotal information as the basis to make company decisions is high risk. A solid marketing team has the capabilities to collect and analyze competitive and industry data for better product development and executive decision making. Dutch Cultural Anthropologist and  Business Consultant, Ursula Brinkmann agreed in Twitter this week as well: “@IntlEntreprenr Great question! Marketing team too small? Constant running after facts, fear re missed opportunity, jealousy re: competition.

 

A Happy Ending

Now Bob, our engineering firm marketing manager, has great news. A new CEO was hired to reverse the firm’s downward revenue spiral. Bob was quickly promoted to a Director level. He was initially given budget to hire interns from a local college and some contractors to build a new website, develop a social media program, and write digital content. Later he added a few marketing staff who were able to take over the fully-functioning, digital lead-driving website as well as events management and other tasks. The marketing staff and budget increase was not dramatic for the overall size of the firm, but it made all the difference. At first, the results were small, but then the marketing engine roared into its fuller potential. The last I heard, the firm was not only retaking the top market share position in the industry worldwide, but they were in a position to start acquiring smaller firms in their global markets.
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The International Entrepreneur – Choosing the Right Size for your Global Marketing Team

optimize global marketing team

 

Leading a company’s marketing team is truly a balancing act. It often feels like we walk a tightrope between budgets and expectations, producing real-time results and planning for the future, building the right structure for today and for a year down the road. What’s more other department leaders may not even understand marketing basics, meaning that as marketing leader you must educate colleagues in addition to actual work leading to new revenue.

The question of how to optimize global marketing is at the forefront of most discussions I have with company leaders. And if there were some magic formula for maximizing global marketing potential, we would all know it and I would be out of a job. Like in all strategy, the marketing function needs to be responsive to its company, industry, and leverage any existing talents and assets, compensating for deficits.

There are many factors to consider when assessing your marketing function’s effectiveness. Here are a few that I have found to be critical:

Overall Growth Rate – There are companies with steady client revenue streams who need very little, if any permanent marketing team. But this is rare. Most companies need to grow in order to give a higher return to their investors. The higher the required growth rate, the more marketing (and sales) resources are needed to retain current clients and acquire new ones.

Competitive Environment – Some industries look more like war zones as marketing/sales teams wage lengthy battles to win new clients against the competition. Other companies claim to be so innovative that they have no competition (that’s never actually true, by the way). Global markets open variances in the competitive landscape. Your home market might require heavy marketing investment to be competitive while a market halfway around the world may be relatively light in competitors.

Strength of Value Proposition (and Clarity of Messaging) – Some companies market products that actually save lives (ex. Defibrillators). That’s a very strong value proposition with a relatively simple message. I onced worked with a bioscience company where it took the CEO and Founder literally 90 minutes to explain the value of his product line. Now if you had a PhD in biology that time dropped to 15 minutes, but needless to say large marketing investment was needed to gain and keep attention while explaining the value.

Relative Strength of Sales Team – In my experience, marketing and sales are twin functions that both need to be high functioning to catapult a company into serious growth rates. No matter how great the sales force, they will never make up for poor marketing. And no matter how smart the CMO and his/her team, they can’t take the place of sales. Focus on shoring up weakness on either side.

Marketing Leadership Capabilities – Many companies throw money at marketing and receive poor results when marketing’s leadership does not have talent. Signs that this may be happening in your company include: high marketing staff turnover, several major changes in brand in a short time period, lots of excuses about why marketing results are not measureable, and a reactionary-driven project list. Fix the leadership at the top before investing any more into a poorly functioning department.

Upfront Investment vs. Long-Term Growth – While there are some companies with large reserves of cash from private equity or retained earnings, most firms are a bit more cash strapped. What’s more, adding marketing staff and other resources rarely break even as investments until much later. Organic growth requires a slower hiring plan. Hiring too fast can potentially jeopardize the company’s ability to stay solvent.

 

Given these factors, here are questions to help assess your global marketing team’s relative size compared with their effectiveness:

  1. Is your current marketing function driving qualified new leads into your sales process at rates that will help the company reach its growth goals?
  2. Would an additional hire in some area of the marketing team directly impact the ability to retain current clients or find and nurture new prospects?
  3. Does the marketing team provide valuable competitive and business environment insights to help drive future product design and market entry choices?
  4. Is your marketing leader able to communicate a clear vision of their team’s roles and expected outcomes, including budget compared with outcomes?
  5. Is the company brand not only well represented in the marketplace, but consistent across all interactions with the company?
  6. Does the marketing team take advantage of marketing industry insights and present-day tools to further lead creation, inbound marketing, lead nurturing, and establishing a clear market position?
  7. Does everyone in the marketing team have clearly defined roles that directly relate to revenue growth?
  8. Is the current marketing team able to effectively manage marketing branding and outreach in all of its current global markets?

 

For the next few weeks I will be writing about optimizing global marketing functions. Please stay tuned for more stories and insights!

 

Best wishes in all of your international business efforts,

Becky DeStigter

The International Entrepreneur

The International Entrepreneur – How to Create International B2B Buyer Personas

International Entrepreneur - How to create international B2B Buyer Personas

“We’re going to want to expand into some new international markets next year as part of our growth strategy. Will the marketing team be ready for that?” asks your company CEO.

“Absolutely”, you quickly reply. As Chief Marketing Officer, you deserve part of the credit for your company’s successful revenue rise. You have built a strong engagement marketing program, attracting and nurturing leads. And really, how hard can it be to translate the website into a handful of key languages?

 

Using the Right Marketing Measuring Stick

The Truth: Translation and even website localization only scratch the surface of foreign market penetration. Every country and region around the world operates on a different set of business rules. This includes both regulations as well as cultural rules that can come in the form of assumptions, beliefs, expectations or values.

Put another way…if someone markets to you in English, do they automatically understand your buyer motivations?

 

The Right Measure: The only true marketing measures are quantitative results. Does your marketing program yield cost-effective results that are at or above levels needed to grow your company to stakeholder expectations? Are you able to deliver qualified leads into your sales process?

Today’s marketers are expected to deliver these outcomes. Gone are the days of unaccountable marketing expenditures for advertising, PR, and other low-return channels. That brings us to Buyer Personas…

Buyer personas serve as a focal point for marketing messaging and content development. I use a buyer persona (Bob, the American mid-market CMO) to focus my writing towards one specific (imaginary) person who represents an important market segment for my consulting practice. It helps those who discover your product to self-select as to whether they belong in your target market. In contrast, choosing NOT to develop market-specific buyer personas gives your local competition a distinct competitive advantage.

 

Types of Motivators That Can Differ

Here are some areas that may be different than in your well-known home market. All of these factors should influence the development of your marketing team’s buyer personas.

 

Decision Makers/Influencers – Knowing who actually makes the decisions and who influences those decisions is key in marketing. For example, large purchase decisions are more likely group decisions in Sweden compared with France where the leader makes the decisions. Gatekeepers who keep sales and marketing contact away from their bosses may be more selective in Malaysia than in Canada.

 

Logic and Emotional Appeals – Marketing normally uses persuasion. But which appeals are the most effective? Again, it varies by culture. The Germans want mainly logic (strategy) to justify decisions. Australians tend to focus heavily on financial justification over all else. Parts of Latin America can rely on a mix that includes emotion-based decision-making.

 

Organization and Personal Motivations – While it is impossible to predict what will motivate a specific person, there are some cultural influences that can have strong effects. For instance, Chinese companies often have a long time horizon for strategic initiatives compared especially with American companies. On the personal side, the English often choose to keep professional and personal lives separate. In Mexico, the feeling is the opposite. Personal and professional lives are often overlapped.

 

Developing International Buyer Personas

If foreign markets are important to your company’s growth plan, then every market needs to have its own set of buyer personas representing  all key players in the buying process. The sets often include personas for a leader, technical expert, business expert, and the initial gatekeeper (leader’s assistant). The more complex and expensive the product, then usually the more people involved in its selection process. Most companies name their personas (Mr. Wang, Maria, Sven, etc.).

 

Step 1: Ask questions from local industry contacts to gain perspective.

We are looking specifically for what might be different between your home country’s approach and the approach needed in each target market. Two great sources are (1) any in-country representatives you may be working with and (2) in-country industry association contacts. Ask questions to help flush out information that contradicts your own cultural assumptions. “Who are the normal decision makers and influencers in this type of sale?” “How does someone in this country search for information on products in this industry?” “What role does each person play in selection?” If anything said contradicts your assumptions, follow up with additional questions to better understand.

 

Step 2: Create Named Personas for Each Player in the Buying Process

Most B2B personas I have seen and/or developed for clients can be described in one page. It tells about this fictional person’s likely general background (education, work experience, age, etc.). It describes their role in relation to the rest of the company. Personas include the person’s motivations in their professional life including any possible fears (ex. fear of failure or embarrassment) or aspirations (ex. future promotions based on success). If should include the persona’s likely familiarity with your company’s product category and experience level in working with foreign companies like yours. If your company does business in France, India and Mexico, you should persona sets for buying processes in all three countries.

 

Step 3: Buyer Persona Validation and Improvement

Once you have created your foreign market buyer personas, each set should be reviewed by a trusted source who has worked extensively in that market. Make adjustments accordingly. Over time, new information from experiences in market should help to continually refine your buyer personas.

 

I hope this helps your marketing team to create more effective global marketing programs!

 

Onward & upward,

 

Becky DeStigter

The International Entrepreneur

The International Entrepreneur – Maximizing the Potential of a Global Strategic Partnership

Global Strategic Partnership

 

I glanced up from the conference phone positioned in the middle of the table to catch the expression of quiet resignation in Hector, my client’s new Strategic Partnership Director. Hector’s Sales VP was talking on speaker phone to a potential strategic partner’s sales and partnership team. I realized in that moment that Hector knew what was going to happen.

Hector’s Sales VP was ignoring all of the research and analysis on how to make the most of the fortuitous opportunity to partner globally with a company expanding into the same markets that was in no way a direct competitor. The opportunities for these two companies to leverage each other’s strengths made for an extensive list – a list that was literally on the table in front of Hector’s Sales VP. But that’s not what was being discussed.

Instead, we had a one-way discussion about how the potential partner could fit neatly into my client’s international channel distributor program. No matter how Hector, the other company’s team or I tried to steer the conversation towards other strategic collaboration points, the Sales VP veered back to his single-minded agenda. The potential partner was far from impressed and the conversation soon ended with a few token follow-up tasks. Hector and I glanced again at each other. We both knew that the opportunity had passed.

The Sales VP seemed genuinely proud of himself in showing us how these partnership conversations should happen. Now I understood Hector’s expression more completely. This company’s leadership didn’t understand what strategic partners were. Until they figured it out (or listened to any number of sources) they were doomed to cripple their partnership potential.

 

International Distribution Partners are NOT the same as International Strategic Partners

This is far from an isolated situation. We see it all of the time… companies that underestimate the value they can get and receive from partnering for further international expansion. Since strategic partnerships normally fall somewhere either under sales or marketing functions in most companies, they tend to stay close to the known well-trodden paths such as channel distributorships.  

Strategic partnerships should never fit into one specific model. Instead, they should filling in the weak spots where the partner has strengths. Here are examples:

  • Partner B has excess capacity in their overseas production facility. They rent out their facilities to Partner A for a reasonable compensation (monetary or perhaps a trade of some kind).
  • Partner A will be exhibiting at a key international trade show. It’s a sizable investment. Partner B only needs to meet with a few key prospects at the show. Partner A gives an exhibitor pass to B’s Sales VP to have access to those prospects.
  • Partner A has access to a government grant in their country that supports research and development. Partner B sends a key engineer to work for 6 months in Partner A’s overseas facility. The technology is used in both companies selling into their own respective markets.
  • Partner A has a strong presence in Europe while Partner B has built up the Asian market. Since they sell different products to the same market, they agree to help each other make key introductions to potential clients in their strong markets.

The possibilities are endless so long as there is benefit to both partners and the risks are manageable. Strategic partnerships work best when both partners are dependent on each other and breaking up would be painful.

 

Here’s an approach to maximizing the potential of your partnerships:

  1. Spend time up front to develop a trusted connection with partner’s key staff. This is critical to long-term success. There has to be trust between company leaders or the partnership will quickly fall apart. This means spending time together preferably in person or at least in video conferencing. There may need to be cultural adjustments in this process depending where your target strategic partner is based.
  2. Ask open-ended questions about the other side’s goals, capabilities, challenges, etc. You’re looking for opportunities and challenges here. What is happening in their business that would also help your company? Is it best practices? Specific expertise? Access to capital? Client base? Key connections? Successful marketing channels? What are the challenges that they face in terms of internal limitations or external threats? The more you know, the better you can position your negotiations.
  3. Inventory what your side can offer in exchange. In looking for what your company has to offer, think of what would be easy to give. Space in a trade show booth is a great example. So are some introductions to some of your client accounts where it makes the most sense. But look further into areas like production, talent, finance and logistics for opportunities to build off of excess capacity.
  4. Look for creative trades that benefit both sides. In international expansion, one company may already have a foothold in the market, creating the opportunity to share knowledge and initial connections. If both companies want to enter the same new market, there is an opportunity to collaborate on research, saving time and staff resources.
  5. Continue to evaluate and renegotiate over time. In any partnership it is smart to periodically revisit the projects or programs that are still benefiting both parties and those that should be discontinued because they have become ineffective or irrelevant due to changing circumstances. This is also the time to see if new collaboration opportunities have surfaced.

 

For growing companies, global strategic partnerships are a way to acquire new competitive advantage in most cases faster than developing those same assets your own. It does require company leaders to put egos and fears aside to talk about what would truly propel the company forward towards long-term goals. As for Hector’s company, leadership has yet to get past their own internal roadblocks, but Hector remains hopeful that they will. 
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The International Entrepreneur – What’s Missing Globally in the “Connection Economy”

International Entrepreneur Global Connection Economy

A few years ago, Seth Godin famously introduced the “Connection Economy” into our lexicon to describe how connecting people, companies and resources was a source of increasing value creation in our world.

Since you’re reading this article, that means that you are part of this global technology revolution and probably interact with it frequently. Here are just a few of my own examples of engaging this Connection Economy from this past week:

  • I collaborated via email with my client’s Malaysian country manager to reach her target leads using calls, emails and social media.
  • I took a call from a company in New York looking for a Uruguayan business culture expert. They found my website through Google. I referred them to a Uruguayan contact whom I have never met face to face, but regularly network with in social media.
  • I Skyped to mentor a Canadian rising star in the international marketing field, who is building a consulting practice.

On a personal level:

  • I sent my teenage son, Nathan on a foreign exchange with AFS Intercultural Programs. That means that he will stay with a host family in Italy for 5 weeks whom we have never met before, but were vetted locally by AFS.
  • My Brazilian exchange student, Matheus came home safely from a gathering with friends via a ride from an Uber driver.
  • I took a few daydreaming moments and surfed AirBNB for a nice house rental near the beach in San Diego for Labor Day Weekend in September.

 

When Seth Godin originally described the Connection Economy, he said that it required four pillars:

  1. Coordination. This may be coordinating between people as in the case of Uber. It could coordinate the exchange of money as is the case of crowdfunding. And often it’s the coordination and exchange of information.
  2. Trust. The parties involved need to have a reason to trust each other. Trust is normally built on a foundation of consistent words and actions by people and companies. Now we are trusting partners and vendors whom we may have never actually met before in person.
  3. Permission. In the Connection Economy we voluntarily surrender our information, but only after trust is established.
  4. Exchange of Ideas. This blog (and everyone else’s blog) are part of that exchange of ideas. So is a review site that tells me what current and past employees think about working for a company I’m considering as a partner.

 

Without these pillars, companies like Amazon, Google, Facebook, and countless other Connection companies including my own would not exist. But let’s get out of the American-only point of view and expand to…

 

Bringing a Global Context into the Connection Economy

This may seem confusing to some. After all, isn’t the Connection Economy by its very nature borderless, allowing for seamless access to markets and resources from anywhere in the world? Ideally – yes, but in reality – no. Here’s some context:

 

Access to Connectivity is Far from Universal

As Mark Zuckerberg will tell you, there are 4 billion people in the world with no access to the Internet. 4 billion is roughly half of all people on the planet. There are some sizable barriers to improving access to conduits of information and opportunities that include education, disposable income to buy the necessary tools and services, and even interest.

 

Language and Culture Create Information Silos

The Connection Economy had the perfect solution to bridging language gaps and reaching new markets: Google Translate and other translation widgets that could quickly convert English content effortlessly into dozens of other languages. How clever! Those who tried it soon learned that language is much more nuanced and complex than first thought. Literal translations yield some major mistakes that have cost companies dearly.

Culture is even more complicated. It underpins what determines whether a company or person is worthy of Pillar #2: Trust. Cultural rules run deep and when someone unwittingly violates these rules, the business relationship might never resume. Think of it another way… for all of the interactions you have had over the years with international contacts where you thought the other side was being unreasonable and disagreeable – 90%+ of those negative reactions were probably cultural misunderstandings. The solution is to hire a culture coach to help navigate the norms in key markets and relationships.

 

Regulations Often Protect Entrenched and Local Interests

The Connection Economy has displaced more than a few cab drivers and telephone book printers. It has upended whole industries. In many places around the globe, those who profit from keep things as they are have invested in supporting laws that protect their interests. Before doing business in a new country, be sure to consult with country specialists who can advise you of any problematic restrictions.

 

Expect the Next Great Connecting Concepts to Come from Anywhere in the World

While we tend to see many Connection companies rise out of industry clusters like Silicon Valley, London, Boston, Santiago, Mumbai and Tel Aviv, ideas can come from anywhere. As part of the exchange of ideas, we need to encourage and support new startups with great concepts with our patronage and investment capital – regardless of location.

 

As the beneficiaries of the Connection Economy, it’s important to keep in mind that there is no global standard. We need to increase overall access to the Internet worldwide, providing new opportunities to billions of people. it’s important not to mistake your home market’s perspective, language and cultural rules as the world’s norm. Be prepared for reactions to change in various corners of the world. And watch for the next great advancements in our technology revolution.

Onward & upward

Becky DeStigter
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The International Entrepreneur Interviewed – How to Become an International Entrepreneur w/ Becky DeStigter

Becky DeStigter interview podcast by VerbaccinoReaders,

This week I want to share a great interview and conversation I had with Kathrin Bussmann, host of The Worldly Marketer Podcast Series. For those of you who don’t know Kathrin yet, she is the Founder of Verbaccino and the Creator of International & Global Marketing Strategies for the Digital Age. Kathrin asked me a variety of questions related to early-stage global business expansion. I hope you enjoy!

https://itunes.apple.com/us/podcast/twm-001-how-to-become-international/id1114738776?i=1000368858535&mt=2

Best wishes,
Becky

The International Entrepreneur – Is your company still an Accidental Exporter?

Accidental exporter, international entrepreneur

Joe rolled his chair over to company founder, Mary’s desk with a quizzical wrinkle in his brow…

“Can we sell our security product to someone in Romania? We just got an email basically ordering 50 software licenses from somewhere called Timisoara”, said Joe as Mary looked up from her multiple computer monitors.

Mary was just as surprised as Joe. The company had launched only a few months ago. How could someone from Romania have heard about their product, much less have decided to buy it? Their small team of developers were focused on a few potential clients in the United States.

Mary hadn’t even considered when international would enter into the company’s plans. But 50 licenses was an order that was difficult to ignore… So Mary and her company became “Accidental Exporters” – taking orders from foreign clients without any real understanding yet of their global markets.

 

International Clients Always Arrive Before You Expect Them

A byproduct of the world’s Digital Revolution is that anyone anywhere can read your company website. As a consultant, I don’t travel to over 200 countries… but this article will. Businesses and consumers now have access to product options and pricing information allowing them to make more informed choices. If you have something of value like Mary’s security software product, then clients from other parts of the world will begin to make contact.

Mary and her team will likely weigh the revenue of 50 licenses against the risks of doing business with these Romanian clients. Will the clients pay in dollars? How much interaction is needed for software implementation and service?

If like much software today the delivery is a SaaS model, then allowing access is easy. But are there any regulations related to doing business with Romania in terms of taxes, data location requirements or other restrictions? Most companies ignore compliance issues at first and focus on the money. (Tip: Always know what you’re getting into before you just move forward.)

 

Timisoara, Romania (photo courtesy of wikipedia.org)

Timisoara, Romania (photo courtesy of wikipedia.org)

 

Accidental Exporting Becomes the New Normal

Mary and her company take on the Romanian client… then soon a Canadian client… and on it goes. The company figures out ways to serve these foreign clients in the same way that they serve the domestic base – home country language, home country currency, home country customer service hours, and home market expectations. In my experience, this directionless approach is the international growth path for about 98% of small and medium-sized companies.

The surprising part of reactionary-based international expansion is how long this phase typically lasts – for years and sometimes decades. Companies often seem content to continue on building their international client collection with little thought to the larger markets left untapped.

An extension of Accidental Exporting are overseas distributors who find your company through the website or a trade show; and offer to represent your product in their market. Now you have a distributor based in Australia who gets to build business for you in the APAC region for a 25% discount margin. Most companies just accept this new extension to the reactive model without any visit to the distributor’s offices or 3rd party background checks on their reputation. That’s just crazy and irresponsible.

 

What’s the Alternative to Accidental Exporting?

International expansion planning is the answer. And it needs to start almost as soon as your company initially opens its doors for business. In the start-up phase, a company needs to decide what it can and cannot handle in terms of orders from international clients. Can you convert foreign currency? Can you deliver your product compliantly using the Internet, air or ocean freight? Are there regulations for your product or industry that you should be aware of? For instance, you may decide that Canada is a market you can serve but that Germany’s laws regarding cloud data residing in servers located on German soil rule that market out for now.

Despite anecdotal evidence that startups can be “born global”, few are actually capable of true international market entry from Day 1. Instead, internationalization works best when a company plans for overseas market entry years before the first foreign subsidiary office is opened. Incorporate international considerations into:

  • Product development – Are there any additional product requirements to be compliant internationally (CE Marking, etc.)
  • Company talent recruitment– Are we looking for candidates who also have international and cross-cultural experience?
  • Key outside resources – Can our accountants, attorneys, bankers and PEO providers also advise on international tax, legal issues, foreign exchange and international payroll?
  • Financial capital – Are we budgeting for our initial global market research and first market expansions?

Preparing for that eventual international rollout will make the transition much smoother.

 

When Should We Get Serious About Internationalizing?

There is no specific milestone that marks when a company should proactively begin its international expansion. But here are some general guidelines:

  • If you have a profitable company providing value to your home market clients
  • If international clients have found you and you are able to successfully serve their needs
  • If your home market is a small one, then you will need to internationalize earlier than large home market companies
  • If you have 100+ employees (this can vary by industry, but IT companies should heed this criteria)
  • If you have earnings, loans or outside equity to fund early expansion efforts

 

My hope is that by writing about accidental exporting it will prompt business leaders to examine their own company’s approach to international markets. With luck a few more “accidental exporters” can reach their greater global potential.

 

Onward & upward

Becky DeStigter, The International Entrepreneur

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The International Entrepreneur – How to accelerate global expansion

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It’s ironic. Anyone who has spent time and energy expanding their company into international markets can tell you that the process is anything but fast. Global expansions are notoriously slow, especially when compared to what American and Canadian companies are used to as their domestic time to establish a new business. Registering a new business in some American states can take 30 minutes online and US$50. In contrast, some business registrations overseas can take over 2 years and cost US$20,000+.

In North America, we build our business processes and expectations around speed. Speed to market. Speed up the sales cycle. Speed in product development. Anything that slows us down is the target of constant complaint. Ask anyone who has been through a U.S. Food and Drug Administration’s approval process.

Despite frustrations, there are many compelling reasons why a company would still choose to expand internationally. There are new markets and customers overseas. The market may be global and market share requires doing business internationally. Global markets may balance out seasonal or economic cycles to keep the company’s revenue and growth on a steadier path. There may be strategic advantages for global talent, cost savings or a whole host of other reasons to go global.

 

REALITY CHECK: No matter how compelling the reasons to keep expanding into new global markets, you still need to expend the necessary time and resources to bring success. If you can’t commit to at least 2 years’ worth of work to get a new market off the ground, then I recommend that you don’t take your company global.

 

Here’s my advice for speeding up the international expansion process:

  1. Consistent Commitment. Nothing (and I mean nothing) will slow down your company’s global expansion more than the mixed messages of wavering leadership and financial support.
    This happened earlier this month to an international expansion director in the southwest United States. He had made all of the arrangements to meet with potential Middle East partners on a crucial trip. His company’s Board of Directors froze all travel and other international expenses for a short-term gain.  Now when this director can finally return to this high-potential market, he won’t find the same level of welcome or interest in doing business.
  1. Travel to Your Markets. If you truly want to expand quickly, then put your company leaders and expansion staff on planes to your chosen target markets. Face to face meetings with potential partners, clients and other influential stakeholders in country dramatically speed up the time taken to form these key relationships.
  2. Consider Strategic Partnerships or Mergers & Acquisitions. While partnerships and M&A take substantial time up front to establish the relationship and agreement terms, they can expedite market entry where they already have established client base. So for instance, let’s say my company wanted to enter the Thai market. I don’t speak Thai or know this culture which is quite different from my own. But if there were a compatible partner company, I could reach potential Thai customers by piggybacking on the partner’s products or services as a point of entry. I could learn from my Thai partner about the market and the best ways to sell my offering.
    On the M&A side, buying or merging with a company in a key market means that you buy their assets and also their internal processes and market knowledge. This, of course, is also dependent on keeping existing staff happy post-M&A so that the knowledge stays with the company. Obviously M&A requires support from your current and future financial resources.
  1. Laser Focus Normally Beats the Shotgun Approach to Market Entry. Many companies take the reactionary approach to international markets – they wait for foreign clients to find the company online and approach them with business. I am not saying that this is necessarily a bad starting point, but at some stage serving customers in 13 countries is less efficient than focusing on the 3 best markets and doing it at higher revenue and profit margins.
  2. Practice Agile Processes in Your International Expansion. Instead of starting and stopping every time there is a new challenge in a global market, I recommend using an agile process. Agile is a leading approach in software development where changes are made to code frequently to constantly improve the quality of the product. Marketing adopted agile because it allows for incremental performance evaluations and changes instead of annual reviews. I think this applies just as well to global expansion, where incremental changes can vastly improve results and speed up the process rather than waiting for a review from a large country roll-out.

While international expansion is an investment for companies with a longer investment time frame, there are definitely steps that can speed up the process. Consistency in support is a required foundation. Armchair expansion is much slower than sending staff into the field to meet and develop relationships with key in-country contacts. Focusing on key markets and partners is faster than waiting to see what drops in your lap. And always be ready to make changes based on the new insights you pick up during the new market entry.

I wish you all the best of success in all of your markets.

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The International Entrepreneur – Balancing Internal and External Global Marketing Resources

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Susan rubbed her forehead trying to push back the headache that was forming. She was the Chief Marketing Officer for a Boston-based globally-expanding software company. Susan had always been praised for her ability to hire and manage outside marketing specialists and deliver excellent marketing metrics. But now she needed resources like German social media experts and Thai copywriters. The marketing ROI, lead generation numbers and other metrics she had worked to hard to build domestically had all turned sour in the global mix. Susan worried that she might lose her job if she didn’t turn things around quickly in the new global expansion. How could she turn things around?

 

First, take a deep breath… and assess the situation

It’s easy to get caught up in the tactical marketing execution and miss the bigger picture. With this in mind, it’s time to take an assessment of the resources and skills currently available from existing staff and current contractors and match them up against the expectations of your operation.

Global markets can confound even seasoned marketing leaders. We all know our home market best. But once we move into another country, the legal, linguistic and cultural rules shift. The Canadian market may have responded well to your company’s inbound marketing campaigns, but the Colombian market may need a more direct contacts. And giving what seem like clear communications make take on a completely different outcome in India compared with Denmark.

Susan from Boston assesses that she has too many disparate resources that she directly manages. She is needing to navigate many unfamiliar business cultures. And she’s not sure what marketing messaging and channels work in which markets. Her CEO is expecting her to deliver the same 5-fold ROI on marketing expenditures that she delivered in the U.S. market and his patience is wearing thin. Susan needs to do something different.

 

Planning for international success

I always recommend starting with a Gap Analysis. Assess where your marketing organization is at today and where it needs to be both today (short-term) and at some point out in the future (long-term). What capabilities would you need for both short-term and long-term success? Assess marketing functional capabilities, but also cross-cultural communication skills.

Internal and external resource balancing act

Today’s marketing leaders have extensive outsourcing options. In fact, more than one company has outsourced their entire department to a marketing agency. That’s extreme, but in certain situations, it could make sense. Here are guidelines for the majority:

Leadership and oversight should stay in house.

Marketing is normally part of the company’s value chain should be managed by the CMO/VP and their staff. This allows for internal brand management and control. Most importantly, the marketing department remains responsible for all marketing results.

Specialty projects and functions requiring rare skills should be outsourced.

I don’t speak Thai or understand the nuances of Thai culture. To create an effective marketing campaign in Thailand, I would need to engage a local marketing agency. This is not only true for culture and language-specific projects, but other skills that are well outside of your marketing department’s current core competencies. They could be technical, creative, analytical or any area where there is currently more need than internal staff skills.

And then there’s the gray area in between

There are always functions that could be either hired or trained into the marketing department staff OR outsourced to an outside firm. Generally, most marketing leaders I know estimate the value of the output compared with the cost. Is it more expensive to outsource or spend internal staff hours on the website rebuild? Additionally, how easy are each resource to manage? Which is most reliable? Do we have enough marketing budget to pay for a new employee or pay an outside resource?

 

Susan from Boston’s Dilemma

When we met Susan the software company CMO, she was challenged with her company’s global expansion. This isn’t unusual. Susan needs to start by realigning expectations of new market learning curves internally with her CEO and other stakeholders. Susan and her staff will need time to figure out the most effective marketing messages and channel mix. This needs to be communicated to realign expectations. I’d also recommend reporting metrics by country to show that the domestic numbers are still strong and any improvements by country over time.

If the expansion involves several simultaneous market entries (which seems to be the case), then Susan may need to reorganize oversight responsibilities. The 2 most common structures are to organize by functional marketing areas (design, content, social media, events, etc.) or by country/region.

Susan’s marketing department may be too small for this aggressive of a global expansion. She may need more project management and functional skills to lead efforts in different parts of the world simultaneously. This will help the company continue global growth and success.

 

I hope this article helps you as your company continues to growth and balance resources. With so many choices, it leaves many CMOs to wonder how to best manage and execute their global marketing budget. Overseas markets require creative solutions, and no matter what some marketing agency tries to tell you – there is no “one size fits all” solution. Above all else, do what is right for your situation.

Becky DeStigter, The International Entrepreneur

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