Many companies hesitate to enter export markets because of perceived risk. Certainly there are some legitimate risks to be mitigated. There are also a number of “risks” which are exaggerated and promulgated with common myths.
But there is one fundamental risk which has traditionally challenged export growth – market selection. Technology is quickly helping to obviate that risk and clear the path for more companies to expand internationally.
The first market gamble
Companies considering global expansion typically follow one of three paths to market selection:
1. Follow a customer – an existing domestic customer is going international themselves and requests global support
2. Accidental – an order comes in from somewhere, unsolicited
3. Speculation – “market research” is conducted and an informed “best guess” becomes the basis for the speculative allocation of resources to market entry and development
There’s a reason why many companies that export follow existing customers. In that case, the only barriers are the transactional challenges of compliance and logistics. There’s very little downside for companies in that situation.
Accidental exporters occasionally stumble into success, but typically they develop a series of ad hoc transactions which don’t justify developing an internal infrastructure, but tax the operations team. This common scenario often leads to organizational frustration with the “complexity” of export sales.
The “well researched” approach is the most problematic. Companies realize that they can’t just throw a dart at the map to select an appropriate market successfully. So they research the options. Sometimes they rely on a government agency to assist, while in others the task is handed off to interns, or management takes responsibility.
Regardless of who conducts the research, it’s inherently hypothetical and based on the company’s perspective – not an objective view from the outside-in, as prospects in the target market might see them, their products/services, or their viability as a vendor.
With a theoretically sound selection made, resources are committed – after all, it’s well researched and very likely to succeed, right?
And companies recognize that it takes time. So, based on the researched decision, they often commit substantial resources to market entry. These resources include not only cash, but also management focus diverted from domestic priorities for an extended period.
Committed to their well-researched initiative, they persist through discouraging experiences, confident that patience and hard work will prevail. And after 3 – 5 years of frustration, they rarely wonder whether their market selection process was proper. Instead, the conclusion is typically that “export isn’t for us.”
In short, the risk is that companies commit resources to do “everything right,” yet risk getting it completely wrong – and at great expense.
Let markets “raise their hands”
Technology substantially changes the way that prospects and sellers interact. While sellers used to have to go forth and find prospects, prospects increasingly use the incredible power of the internet to find what they need/want at the time of their choosing.
They often search for ideas and information, and later search for solutions to challenges they have, and then products/services which may help them.
It’s said that there are already more internet connected mobile devices in the world than toothbrushes, and the rate of growth of connectivity shows no signs of slowing. That means that potential buyers globally have the same access to information, and products/services, as your domestic buyers.
This in turn means that great digital marketing, an imperative regardless of your market focus, generates rich data which provides valuable insights.
One can quickly determine, for instance, by country/region:
• who is finding you when they’re searching
• what searches they’re doing (some of this data is direct and some inferred)
• who interacts with your “content” initially
• who interacts consistently
• where leads concentrate
• where substantive, viable projects develop
• and even where you can consummate profitable orders
This approach provides real market intelligence. While it’s no guarantee of success or profitability, it’s a powerful tool both to identify what may be easier markets to enter, and to challenge and validate the traditional research.
Enter every new market agilely
This approach to market identification offers another huge potential benefit: companies can adopt an “agile” model for market entry.
As successful digital marketing generates international traffic, leads, projects and orders, and certain markets evidence themselves to be particularly promising, companies can progress step-by-step. It’s no longer necessary to skip directly to an extensive and expensive “on the ground” commitment.
Instead, companies can progress incrementally by testing assumptions, efficacy and return at each step along the way. And again, they can focus all efforts on markets where they have data to indicate they’re likely to have some traction.
A reasonable progression might look like this:
1. Collect data generated through great digital marketing focused on the domestic market
2. Use early projects to learn about the prospects’ challenges, concerns, buying process, common questions, goals, market barriers, etc.
3. Create some approximate ideal customer profiles, target buyer personas and buying journey maps
4. Begin to optimize some content around those learnings, gradually incorporating local language keywords (from those interactions, not translation!)
5. Adopt a CMS (content management system) that delivers contextually appropriate content (using IP address, for instance, shows a different version of the site to a visitor – not just language, but even primary content, images, etc.)
6. Start to display some content offers, to targeted visitors, that are designed for those markets
7. Transcreate some early articles, landing pages and eventually some offer documents (while translation converts words, and localization considers dialect, context, images, colors, etc. transcreation builds content from the bottom up as it should be locally)
8. Create a local language microsite
9. Undertake sophisticated SEO (TLD/top level domain, hosting from an IP address that corresponds to the TLD, etc.)
All of this can be accomplished from the home office.
Much of this groundwork can be done for less than the cost of a flight to the target market.
And each step will yield data which will be used to refine subsequent steps and inform resource allocation decisions for deeper engagement within markets as well as guide priority of entry into future markets.
And much of the work contributes to improved results across all markets.
It’s a process, not a solution
Is this a substitute for being on the ground building relationships in a market? Of course not. What this does, however, is provides a platform for companies to explore international market opportunities with much lower risk than the traditional approach.
That allows them to iterate inexpensively until they identify great markets for more intense focus, and helps to guide the direction of limited resources with a series of data driven decisions, rather than a gut feeling.