Top 5 international expansion mistakes.

Whether it was planned right from day one, or in response to enquiries from potential customers outside of your region, a successful company will inevitably look to expand internationally. However there are some common mistakes that can be easily avoided.

There are a number of reasons why vendors, especially those with SaaS products, should look to internationalise sooner rather than later. New markets will not only increase the number of potential customers available, but they can also help you gain advantage over competitors, enable you to diversify, provide access to top talent, and attract foreign investment.

Internationalisation can be big step for any company and naturally comes with risks as well as rewards, so it’s all the more important to make sure you’re properly prepared - which includes steering clear of the top 5 mistakes companies make when trying to expand internationally.

Here’s the countdown of the top 5 mistakes made by companies when attempting international expansion:

5. "Our reputation speaks for itself..."

You’re rightly proud of what you’ve achieved in your domestic-market and the customers you’ve collected, but in other countries, unless your brand is especially well developed, you’re likely going to be regarded as a new company that firstly needs to gain local awareness and earn trust.

Potential customers will compare you with competitors that are already global and have an established a presence in their region. And even if you’re referenced by the major industry quadrant-type reports, customers may still size you up against local brands which hold a home-advantage similar to that which you most likely enjoy in your own domestic market. And if you’re not in the major reports – perhaps because your company doesn’t fulfil the criteria of international revenue – then building a good reputation and gaining local brand awareness is all the more critical.

Potential partners may be able to help you enhance your reputation more quickly, however they will not only weigh up the likelihood of winning the revenues you promise, but they will also evaluate how prepared and dedicated you are to making the partnership a success. If they are left even a little unconvinced, you may lose out on a pivotal ally, or any partnership agreement you strike may be less fruitful and short-lived.

4. "The dog ate my homework..."

You may have gotten away with this excuse at school, but not doing your homework on the market you’re trying to enter will hurt you more than a bad grade or detention. Researching the competitive landscape is critical, as is evaluating the potential for a product like yours.

Your homework should answer as many questions regarding product-market fit including:

• What proportion of the market falls into your sweet spot of target customers?

• How saturated is the market?

• Which competitors are on the market and how well established are they?

• How much of a threat do alternative solutions pose?

• Does your product meet the requirements of the local market?

• What gaps does your product fill?

• How can you to go-to-market in a way that will kick-start sustainable business flow?

Having a good business plan is key to international expansion as it will establish guidelines to help you helps gauge progress at each stage, manage your budget and flag any new opportunities or threats. Understanding your risk appetite and knowing your limits will ensure expansion plans remain fiscally viable and do not run the risk of simply becoming a money pit.

3. "How was I supposed to know...?"

The importance of understanding cultural differences is often underestimated. The world is more international than it has ever been yet failing to appreciate basic business etiquette could jeopardize any chance of success before your even start.

The importance if punctuality, what you wear to a meeting, how you greet someone, how you treat business cards, and so on, can all vary according to each country and with whom you are meeting. Not knowing is no excuse. Falling foul of international business etiquette could ruin first impressions, whilst conversely, being aware of common courtesies and phrases can help bridge the gap and enable agreement to be reached more readily.

2. "Everyone speaks English...right?"

It’s widely recognised that English is the international language of business. Technology and development teams also use English as their common-tongue. However, when English is spoken by or with someone for whom it is a second or third language, there is always a danger of miscommunication – at all levels.

What language are your website and main communication channels in?

One easily avoidable mistake that’s often made by companies is not having a core website in languages other than their mother tongue and English – after all, everyone speaks English…right?

Common excuses are that "the website is too large to translate", or "the website will be translated once we have a partner or customer that needs it".

However, having core websites in the language of countries you are actively targeting is relatively inexpensive and quick to do, whilst it’s impact can be huge and help you get awareness and traction even before you start to actively target a country with that language.

1. "Hire. Hope. Repeat..."

Countless companies, especially those with a successful direct-to-market model in their domestic market, have tried to enter new markets by hiring a salesperson and hoping for the best. This seems reasonable, except it makes top spot in our list of top 5 mistakes list because it is so often poorly executed.

A sadly typical approach:

• Hire a salesperson

• Hope for the best

• Repeat

These companies typically choose a country they share a border with, hire someone there, train them in the same way as all their other salespeople, then get them to make tentative approaches to potential customers – explaining who they are and who the company is. They spend money on booths at conferences, spend more hiring local marketing and sale-support companies to generate leads.

These companies then get frustrated at lack of traction and increasing levels of investment and ultimately blame the salesperson – who complains about lack of support and local language materials – so they are replaced either immediately or at some later date when the company wants to try again.

And whilst all of this is going on...

There is a market of potential customers, competitors and industry players watching you. Inactivity for any length of time only increases suspicion over the company’s commitment to the market, as well as their credibility. Any sustained lack of or limited success only continues to depreciate the brand whilst increasing the drain on finances.

Of course, it is possible to get this organic approach right – whether it’s in a neighbouring country that you share a border with or whether it’s in a county on the other side of the world. It usually boils down to proper business planning, effective market research and being prepared to support the activities required to build awareness and reputation, generate leads, and convince customers that you’re not going to disappear as quickly as you appeared.

Partner for successful international expansion.

Our experience has demonstrated that a partner approach to internationalisation can help not only to avoid the top-5 mistakes as outlined above but adds additional value that would be difficult to otherwise get, allowing you to make the right decisions faster.

By engaging a partner like FOCAI to help you tailor your internationalisation strategy to your unique profile, you can reduce the risk of entry into a new market as well as discover your optimal approach – that fits with your company’s risk appetite and fast tracks your goals for sustainable growth.

Are you thinking of going global or do you need additional help to achieve your goals? Contact us today for immediate response and assistance in making your international expansion the success it should be.