Beyond Known Borders: The International Expansion

International expansion desire

Your company has become successful in the country of origin with a product or service. In order to grow further international expansion is required.
Management has the idea and impression that the success achieved in the country of origin should be replaceable in other countries too.

In your own country direct sales was possible. Getting into contact with potential customers on local and national events and having meetings in your offices: all managed by the founder and the sales staff.

Crossing the border

However when crossing the border several problems:
– Language barrier
– No brand name
– No local presence
– Local competitor(s)
– Localization of product, solution or service
– Missing schmoozing with local influencers

How to address the international market

The question arises how to address the market:
– Hiring international salesman who travels frequently to the country
– Start-up with one local sales representative – from his home office
– Set-up your local sales team and facilities – the big market entry
– Use a distributor – trying to get resellers
– Get into a relation with an integrator: reselling and integrating your solution

Change in sales process

What is direct local sales at the home country, the sales efforts will get split up between:
– B2B (selling to the distributor and resellers)
– B2B or B2C for your end customers through tghe distributor or resellers

Thus by crossing the border the complexity of management, sales and marketing increases significantly.
In many cases companies should stay in their country and bury the dreams of international expansion.

How did you achieve international break through and success ?

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How sticky are your products?

Sticky products

Products are sticky if your customers buy over and over again generating recurrent revenue.
How sticky are your products ?
Typically these products are consumables that are required to keep the solution going.
There are also products that companies will buy recurrently as they have become obvious for business.
Like filing systems, copiers, printers, portable computers, … not exactly consumables but products that are being bought on an ongoing basis.

Sticky services

Besides the obvious services that are required on a normal basis like cleaning, utility maintenance, … there are services with a higher price tag that are recurrent too: accounting, auditing, cloud computing, …

Converting into recurrent

If you have a product or a service that brings recurrent revenue your future is more certain.

The problem is how to get your products into the recurrent class?
a) Maybe the concept of your product needs to be changed by making an essential part replaceable. However this is not suited or feasible for most products.
b) Or adding on services to your products like Apple does: for example assurance, maintenance,…
c) The easiest way is to change the pricing: from one price upfront into a monthly or yearly price to be paid – like a subscription. In many cases this is possible by adding the maintenance into the pricing structure.
Hence instead of selling a product you sell a lease or rent including the maintenance.

Benefits and drawbacks of subscription pricing

The drawback of such a subscription based pricing is that the customer can stop the subscription.
The benefit of subscription based pricing is the opportunity for the salesman to go and visit the current customers and staying in contact with them whereas with a one time purchase the relationship gets lost quickly after delivery.
An additional benefit is the possibility of a higher total revenue over time as your solution keeps being used at the customer.

Could you convert your products into a subscription based pricing ?

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Will Your Business Be Uberficated ?

Uberfication business threat

If something similar as Uber happens in your market or business then your company comes under severe threat as a similar offering is available from many sources providing more flexibility at lower prices.

Uberfication market

When buyers and sellers are able to find each other digitally directly and allowing the buyer to select based on rating and price, Uberfication is happening in your business.

The digital platform does not provide services but only connects a customer with a demand to a supplier, who provides a service – the digital platform only takes a commission.

Uberfication eliminating companies

No longer the concept of a company with assets and workforce needs to be in place as is shown by Airbnb: there is no one company with a lot of assets (rooms) involved but solely individuals and a digital platform.

Something similar is in place in China: producers and sellers offer products on Alibaba or AliExpress and the end customer buys directly from them.
No more traders, distributors as goods are shipped directly from producer to end customer which cuts down significantly on pricing as all the logistic intermediaries are eliminated. At the same time the level of goods in inventories are also lowered significantly.

Uberfication characteristics

There is more that affects society, markets and businesses:
The characteristics of Uberfication are:
– A mobile access to a platform for the client convenience for his on demand requirement.
– The avoidance of most or all of the regulations that apply to conventional providers of the service.
– The providers of the service are not employees of any company but are independent contractors.
– The flexibility is primordial for both the clients as well as the providers (independents).
– The pricing is based on the demand for the availability of offering which in most cases will result in lower pricing for the customer.
– Social security for the providers is a far cry.

Uberfication prerequisites

Any business that can be traded on a digital platform and requiring any kind of asset that is widely available is vulnerable for Uberfication.
Businesses of heavy investment goods and typical B2B products are likely not running the chance to get Uberfication. Still very common B2B products could also be Uberficated if companies would offer their assets for temporary usage on a digital platform. For example a vorkheftruck could be rented out over the weekend by businesses closed over the weekend.

If consumers or businesses buy and use your relatively high investment value products then Uberfication could happen to your business too.

Has your business already encountered an Uberfication or could it happen?

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Are You A Disruptor Or An Innovator ?

Disruptors vs Innovators

There is a huge difference between disruption and innovation.
Disruptors are innovators, but not all innovators are disruptors.
In most cases new business models are disruptors, whereas innovation is mostly in technology and products. Hence most companies are into innovation and start-ups can be disruptors.

Established companies

For an established company it would be extremely hard or difficult to become a disruptor in it’s market as this would be a threat for its’ existing business. Moreover the internal discussions and battles would kill both their existing and their disruptive business.

Low-end disruptor

For established companies becoming the low-end disruptor, aiming to serve the least profitable customer who just wants a good-enough product or solution, is hardly possible as the same brand addresses very different parts of the market: the high-end or middle class with outstanding products and the low-end. In such cases most companies opt for defining, launching and marketing a new low end brand in order to avoid all possible conflicts.
Hence low-end disruptors a most likely to be start-ups or new entrants to the market.

Disruption is not equal to success

In many cases disruptors are not all or immediately successful. Many do fail as there is a huge risk involved with a disruption as there is no proof that there is a market and people have a demand. Learn from lessons of disruption.
It can even be another company picks up the concept ans turns it into a profitable business.

Still the disruptors will eventually eliminate 4 out of 10 companies. However disruption will not only destroy but also create.

Innovation is for most companies.
Disruption is solely for a limited number of companies.

Are you a disruptor or an innovator ?

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How To Spy On And Track Your Competitors’ Marketing

Knowing what your competitors are up to or what actions they are planning or executing is good to know and to be aware of.
So here are a few tools to know more about your competitors=

Email campaigns

By subscribing to all possible newsletters it is feasible to inform about what each of your competitors are up to.
EmailInsights
OWLetter
RivalFox

Ad search

In order to know the ad campaigns of each of your competitors you can use:
MOAT Free !
SpyFu Free !
WhatRunsWhere
LotsOfAds Mainly social campaigns
BoxOfAds for PPV campaigns and media buys

Not only you know what they are promoting but also what didn’t work out if they abandon quickly an ad campaign.

Social Media tracking

There are so many tools that the list would be just too long

Combined or complete: ads, email, social media

RivalFox
Yesmail

Your own website

It is also always good to know what your competitors find interesting or how strongly interesting they find certain pages on your website

How do you spy on your competitors ?

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The More Legal Requirements The Less Business ?

Hindering business perception

Rules, regulations, laws, … they all seem to be made to hinder your business. They will slow down your innovation process and time-to-market. resulting into less business, sales and profits.

While legal requirements can be a burden on entrepreneurship, business and innovation, it can also open opportunities that didn’t exit before.

Legal requirements limits business

In most cases the increase of legal requirements will shrink the number of free parameters for the entrepreneur or businessman as he or she has to adjust the services or the products to the legal requirements.
– Complying to legal rules is always a limitation.
– More legal requirements will make the products or services of competitors more uniform.
Some products are almost entirely defined by legal requirements and the differentiators are in the sales pricing.

In most cases legal requirements will increase the production costs or delivery costs of the service, which is reflected by the increase in sales price.

Legal requirements bring opportunities

As companies are forced to comply, some will not be able to follow and will no longer be a competitor.
Features that were already present in high end solutions become mandatory making the high end solution or product interesting for a larger market.

Companies from a country leading in legal requirements or companies having market share in such countries, will have a competitive advantage over their competitors when the other countries follow and issue these new legal requirements.

Conclusion: limitation and opportunity

The conclusion is a mixed one as new legal requirements will hamper most businesses or industries at first, but can become a competitive advantage over time.

Do your products or services have to comply with many legal requirements ?

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The Big Mistake Of The Company: Stay Or Leave ?

What if your company makes a big mistake?
It’s been published in the industry press and everybody in the industry and business knows about it.
What should you do ?
You have two alternatives: Stay of Leave

Stick with the mistake

Stick with the mistake and try to make the best out of it is one way to go.
Perhaps the worst will be over quickly and people forget or come back because of the previous renown of the brand.
You have existing customers to visit and to convince as you are their trusted contact to the company.
If others leave the company you have the opportunity to obtain a larger or more profitable region or even climb the hierarchy ladder getting more responsibility.
You know what you have in this company but you will be unsure what it is with the competitor.
At least you are consistent which gives a certain trust relationship: the main task of a salesman is to minimize the risk that the decision maker has to take.

Admit and leave

Admitting the mistake and move on is a new multiple challenge as you first need to find a new opportunity and secondly you need to prove yourself again in a different environment. What you have been building up in your previous company is probably gone too.
The competitor might just hire you for your contacts and once entered them into their CRM and contacted you get dumped.
The grass is always greener on the other side of the fence.
It is likely you will start at a lower level than previously.
Will colleagues trust you as you jumped ship ?
Will your existing clients follow you as you have praised the competitor previously and now you turn around.

What would you do or what have you done in such an event of a big mistake of your company ?

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B2B Bribery Or Incentives ?

In whatever B2B business bribery is lurking around. The bigger the projects or the more recurrent the sales value the greater chance one of your competitors will try a form of bribery. This can have very different forms: from a lunch, to a favor, to cash.
There is a very narrow line between bribery and incentive. Incentive for a company or incentive for a manager/director is a big difference. The incentive for a company is beneficial to the company thus no bribery. The incentive for a person is clearly a bribery.
As everybody has a price a bribery or an incentive is sometimes easier than going through a long sales process and not closing the deal.

Another type is giving incentives to people in order to get a referral. The referral is important for future sales, whereas the incentive for the referral was for an already closed deal.

Bribery is omnipresent in all B2B business and it is the fieriest competition as it can turn your competitor into a winner even with inferior products or solutions.

If your competitor is using bribery, then should you use it too ? better not as there are laws against it: the Bribery Act 2010 (UK) came into force 1 July 2011 and Foreign Corrupt Practices Act (US).

Have you spotted bribery in your B2b business ?
Occasionally or often ?

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The future vs budgets

The future

You cannot control the future
You cannot create the future
You can only be part of the future
The future will happen with or without you
Make sure you are part and fit in with the future.

The budget

These are the reasons why budgeting is so difficult.
It is beyond the control of all CEO’s and Board of Directors whatever models and information are being used.
The future will happen whatever decision is being made about the budget. It is likely not to be inline with the budget as there are too many parameter, variables and events that have an influence on the future and your sales.
Just make sure you make the best of your future.

How do you budget ?
How well does it match the reality afterwards ?

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Why Winning The Award Is Often Not Good For Business

Industry award

After many years of hard and often lonely work for your business that made your company what it is today. And you are proud of your achievement.
One day a challenge or industry award attracts your attention and you fill out the form.
Then unexpectedly you WIN !
This could be like “Best Company in Industry”, “Manager of the Year”, “Best exporter of the year”, “Best Startup”, …

Exposure and brand awareness

Getting a reward or winning a challenge is a great event for any company and could bring exposure to your company and thus increase brand awareness.
The reward will get you additional free publicity and more or less broadcast the brand name throughout your industry.

The award drawbacks: temptations

However besides all the benefits and newly created potential there are some drawbacks:
– People will know your name and call you up for many other reasons not related to your business.
– You will be invited the other events not necessarily business related which will consume your time and focus.
– You will get interest from not industry related media that will not bring you more business but again consume your valuable time.
– Some of your competitors will be enviously, jealously, resentfully which can turn out negatively as they see you as their main competitor.

Decline of business

The main drawback is that you no longer control your time due to all the other events and entertainment that are being offered. These are so tempting compared to just executing your business. Eventually this waste of time will result in lacking of focus, neglecting your business and missing to close sales deals.

In the end the reward you have won is no more beneficial for your business but even becomes a threat. You need to decide what is important and what is not for you or your business.

Did you or your company ever win an industry award?
How did that affect your business?

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