Should You Expand Into International Sales? | SalesAndMarketing.com
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Should You Expand Into International Sales?

The right time to expand internationally is before your sales in local markets start to flatten. International expansion should be viewed as a pre-emptive strategy and not as a maneuver of last resort.

Companies can grow their home market via aggressive sales, product development and line expansion, and/or acquisition of competitors. But these tactics become harder to execute as the local market saturates. Also, adding new products and business units may lead to a lack of focus and ‘sharpness’ that dilutes the company brand and positioning and exposes the company to a wider variety of competitors. You will be more successful in your international expansion if you stay focused on your core value.

In terms of the operational impact to the company, each home market initiative yields a small S-curve of accretive revenue. Expanding sales into international markets lets the company repeat each product S-curve with a wider set of buyers without diluting product focus. And the best time to initiate an international business expansion strategy is before the local market is tapped out.

Is Your Product Ready for International Sales?
Just because market conditions may be right for your company to expand internationally, your product and sales processes might not be. Selling outside of your home market often requires that your product be easily sold by someone other than you. That observation might sound obvious, but it has myriad implications.

To sell your product internationally, sales processes need to be well established and easily repeatable:

  • Your product has proven technology or functions with an easy-to-explain point of differentiation (in any language)
  • You have existing ‘happy’ customers to serve as references
  • You have established operational processes that can support new markets
  • You can equip your new sales teams with effective sales and marketing tools

Moreover, you need a packaged product that is polished and can stand on its own. If it is a consumer product, this means it needs to comply with packaging and product safety laws in each country. And if it is a technology product, this means it needs a repeatable sales approach, pricing structure, and legal contracts and agreements:

  • Product development is complete and deployment requires only minor integration
  • Pricing is consistent in various foreign currencies
  • Product messaging and sales training guides make sense in local languages/cultures
  • Partner programs or channel programs are formally documented

When your sales processes are repeatable and your product is packaged, then you are ready to hand over your product to sales professionals and partners in other countries and let them get on with the job of selling.

Where to Begin?
Remember this mnemonic: Plan – Prepare – Test… and only then Invest.

Make a plan: where can your product win against competition? In what other countries are your current clients operating? Start in ‘accessible’ markets first where you can test demand and improve your pitch. Engage experienced sales professionals already located in your target country, as they will know the local language and customs and will have established contacts to help you test market depth.

Once you commit to a new region, give it full support for at least a year. While you may get lucky and land your first orders quickly, it will take another quarter or two to build your brand and see sustained revenue growth.

Tips for What to Avoid:
Lastly, a few tips for what to avoid when implementing an international business expansion strategy:

DO NOT imitate the pack. If all of your competitors have already flocked to another country, you might think twice about that market and instead look for another territory to cultivate.

DO NOT go “Elephant hunting.” For most companies, one or two large potential customers in a region are not enough to justify expansion into that country. Look for markets that have depth.

DO NOT overinvest in a region before it’s proven. Committing your company to a long-term office lease and foreign employment contracts before a market is proven can be disastrous. Labor laws in most European countries do not allow companies to simply fire workers if sales don’t pan out. Consider using in-country, contracted sales professionals who become part of your team to test and develop new markets before opening a dedicated sales office.  

DO NOT launch too far, too early. Time zones matter when closing sales and managing customer support.

When conditions are right and you have experienced sales teams in place, international expansion is the best way to solidify your brand and maintain aggressive sales and revenue growth. Does your company have the necessary requirements in place? Is 2015 the right year for you to expand sales internationally?

Rick Pizzoli is CEO and founder of Sales Force Europe, a team of 60+ “on-demand” sales professionals working in 27 countries and 14 languages throughout Europe. The firm helps businesses scale internationally while avoiding the costs, risks and delays associated with opening foreign offices and hiring local employees. Rick can be reached at RickPizzoli@SalesForceEurope.com.