Two weeks ago I posted Part 1 of my interview with international B2B sales and marketing expert, Ed Marsh. Today I share the rest of Ed’s insightful answers.
Q3: What’s the biggest mistake you see companies making in their online marketing for global markets?
A3: Most US companies make the same fundamental mistake globally that they make domestically. Their entire marketing and sales approach is built on who they are, what they do/make….from their perspective. And that’s functionally irelevent to any potential prospect in the world, including at home in the US. It makes them ideal 3rd bid participants, but not dynamic growth engines.
The solution is to really understand their buyers – and often assumptions are so firmly embedded in a company that outside assistance is critical to really understanding buyers challenges, perspectives, goals, etc. Buyer personas must be rigorously built, and then a complex “3D buyers journey” constructed. That’s the foundation for successful market development domestically which is, in turn, the foundation for global success.
But that’s also where trouble arises…..because companies proceed to use that same foundation globally. Partially because it’s a lot of work to build it properly in each case, and partially because it takes deep market familiarity and extensive interviews to construct – it doesn’t get built for target markets. Then they compound that with translation.
Effective global content isn’t translated, or even localized. It’s transcreated, or created in the local language based on the local persona and optimized around the native and intuitive keywords which describe the market specific business challenges prospects there face.
So exporters need to think of digital marketing as a process of continuous improvement and innovation – instead of a website. They need to really nail their domestic program first. Then they can incrementally internationalize what they have – experimenting and adjusting based on metrics each step of the way.
Q4: What are you recommending to U.S. clients worried about the strong dollar affecting their export potential?
A4: Interestingly I don’t hear many concerns expressed about the strength of the USD. Certainly today’s cross is less favorable than the rates over the past several years, but I don’t have the sense that it’s impacting projects…at least yet.
But I suspect that specific concern may be implied in uncertainty around the bigger topics of foreign exchange and payments. Those are perennial areas of considerable worry to US companies. Often the resources to whom they naturally turn for advice, their accountant and commercial banker, are unfamiliar themselves. That creates a real barrier to export success.
So in general I recommend that they find other resources/advisors/service providers for that expertise, and further that:
- They embrace hedging – it’s neither some whizz kid MBA complicated thing, nor some dastardly Enron approach. It’s simply agreeing today to buy currency at some point in the future for a given price. Companies can easily and inexpensively lock in today’s margin on a deal and let the FX market do as it will. A good currency trading resource will be inexpensive, responsive and proactive with business recommendations. And international customers will appreciate your flexibility to work in their currency.
- They secure foreign receivables insurance – not every deal can get done with cash in advance. Banks push clients into L/Cs which can be appropriate, but are expensive, complicated, often have gaps…and ultimately are more in the bank’s interest than the clients’. Insuring foreign receivables (details vary by policy) not only protects the seller against buyer default and other risks such as non-convertibility of currency, but it also allows companies to use a higher portion of receivables in the asset base upon which their borrowing capacity is calculated.
Q5: Any last advice you’d like to share with growing B2B companies currently expanding in international markets?
A5: Four things. The first is a small, simple one. The way to grow exports is to look for profitable customers to add. It needn’t be some huge, expensive, protracted project with an ephemeral payoff years down the road. Make it easy for the right buyers to find you, work through the transactional details, and start making money globally.
The second is a bigger, more strategic topic. A huge percentage of US SMBs are owned & managed by baby boomers. They’ve grown accustomed to a sellers’ M&A market over the past few years. But research shows that a majority plan a transition over the next five to ten years – and when they simultaneously move in that direction, suddenly the inertia will shift and it will be a buyers’ market. That means that companies need to move proactively to achieve key strategic positioning steps which will help to competitively distinguish their company from many others in a crowded market. That’s where global diversification is key. Not only should their global sales contribute rising revenue and profits (key to valuation, particularly among competitors with stagnant or anemic earnings) but also the diversification itself will create value – perhaps even enough to position a company as a strategic acquisition target for acquirers seeking further global diversification themselves.
The third is practical. Current US debt levels will almost certainly result in increased tax burdens on SMBs, particularly on pass-through entities commonly used by privately held SMBs. That means that tax reduction strategies should be at least part of business planning – and exports could be hugely beneficial through the IC-DISC structure that’s been around for years and was recently made permanent. It offers companies nearly 16% savings on profits from export sales. That’s probably appealing just based on today’s rates – but almost certainly will be more so as rates are likely to rise.
Finally is the value of lessons learned. 1:2 babies born in the US today is Latino. But there is no monolithic Latino culture – rather it’s a diverse group of cultures and languages from throughout Latin America and the Caribbean. There’s no better way to learn how to successfully market and sell to those US consumers than to dive deeply into the markets from which they come. And there are many other product, service and application lessons which can be learned in foreign markets which will spawn R&D and successful new product offerings for the domestic market.
About Ed Marsh
Ed was going to be an architect because he loved the nexus of engineering and design. That was before was going to be an engineer; before he graduated from Johns Hopkins; before he was an Army Infantry Officer (Airborne Ranger); before he set B2B industrial sales records; before he was partners with a German capital equipment manufacturer; before he founded a distribution/rep company for industrial products in India; until he decided that managing a business and employees wasn’t what he enjoyed. Now that Ed’s got all of that out of his system he runs a consultancy that helps US manufacturing companies grow by applying process excellence to business development – completing the full circle back to an engineering & design combination. His practice is built on a unique methodology which combines powerful digital marketing methodologies (a HubSpot partner) with his extensive international biz dev experience. Ed is also Export Advisor to American Express
About Consilium Global Business Advisors: Consilium assists American manufacturers in applying process excellence to their business development. In other words we help lean, well managed companies with rock solid bottom lines effectively and consistently grow their top lines to match. We work primarily with mid size industrial manufacturing companies, guiding them through a journey of designing and executing business grade B2B inbound marketing and focused, profitable global market expansion.