Have you ever wondered why international expansion results often are underwhelming and unimpressive? A tech company realizes that many international clients are proactively seeking out their products & services. They decide that it’s time to expand into new markets I think it’s time to bust some myths in international business strategy that have plagued tech industries for far too long.
Myth 1 – If the international markets don’t succeed in a year, we can just pull out.
First, international expansion takes at least two years to fully take hold in the first international market (if you’ve done it right). Expansion takes company-wide commitment to long-term growth and profits. Second, companies that come in and then pull back out often burn the bridges of partnership and government relationships that they would need again if they tried expansion at a later time. Not a smart plan.
Myth 2 – We can lower our risks by using local market reps to sell internationally for us.
In the right circumstances using international representatives or distributors can substitute for a company knowing how to directly sell in a foreign market. The local rep can also help with product information translations and use their existing networks to accelerate sales.
But here are the risks: First, anyone with detailed product information can also turn around and sell that information to your local competitors. For technology companies, that can be a huge business risk. Second, local reps want to represent your product if it produces a lot of revenue with little effort. If it’s a more challenging market introduction, they will likely put your product on the back shelf, thereby wasting precious time in the market with few results. And third, local reps may be more open to bribing officials or companies to get the sale. This is a direct risk to a company where corruption laws are stricter and hold the parent company responsible for any unlawful payments.
Myth 3 – We can sell technology using the same sales process as we do at home.
Sales expectations vary greatly from country to country. In a place like Australia, return on investment is often measured carefully. In Egypt, buyers expect to be able to negotiate a deal with a much lower price. Some countries use contracts as the foundation of the sale while for others the contract is a mere formality. In each new market entry, the sales process needs to be carefully reviewed for local expectations.
Myth 4 – We can just translate a webpage for each new language and that will give us access to the markets speaking that language.
Keep dreaming. In reality, markets look first to their local country TLD (top level domain) such as .de, .au, etc. And then they may search in their language too. Unless you have a marketing program that focuses on building brand recognition in that language, the one-page language is a mere footnote to your site. It will not inspire confidence that you know how to do business in the places that speak that language.
Myth 5 – Ignore the advice of your local staff or other in-country marketing resources
This one seems silly… and I wouldn’t include it except that I’ve actually seen several tech companies miss the wisdom from their own local resources. Local staff and marketing agencies should be giving you advice on how to better tailor your product, processes, website, etc. to work better locally. A great way to make sure that the staff is right: A/B Test the change to see if traffic, conversion and sales improve.
International strategy is critical to the long-term success of a multi-national company of any size. If you have questions about any aspect of this framework, or would like assistance in assessing your current and future international capabilities, please contact me for a free 30-minute consultation over the phone or Skype.
Best of success in all of your international markets,
The International Entrepreneur