Welcome! In this Takehill blog we will discuss:
- How to find your first new customers when entering new markets
- Why is prospecting still important, and how to do it right
All companies entering new markets must find ways to fill their pipeline with high quality leads. There are several ways to find customers, such as:
● Inbound sales + inbound marketing w/SEO and content strategy - driving traffic and MQL to SQL leads
● Networking - hoping to find buyers through your existing contacts and warm referrals
● Outbound prospecting - reaching out to people who do not know you, based on their target profile, with cold-calls, social media, and emails.
These all have a place in your overall sales operations mix. During your US market entry program, however, you typically would like to get the first customers closed as soon as possible to validate your product-market-fit in the new market. Generating inbound leads with interesting inbound content is great and certainly required as the long-term strategy, but it takes time if you do not have it running already. Networking and referrals may work, or not, depending on what you are selling and if your networks are a good match. Typically, they are not.
So, unless you already have high quality leads flowing in from the US market, to find your first wins you often must employ outbound prospecting tactics. I have heard it said countless times that “cold-calling is dead”. And it may be so, as the long-term strategy. But for the fastest results, prospecting is very much alive and necessary. There are online tools available to make it efficient e.g. Linkedin Sales Navigator etc. And there are a number of great books on this topic, such as this Predictable Prospecting, by M.Tyler and J.Donovan.
Must be noted though, that in the USA channel partners and sales consultants typically expect leads to come from marketing activities. They do NOT like prospecting! So if you are attempting the US market entry and are not generating qualified leads already, it requires you to first find that special rare person or team in the US who is interested and excited in prospecting new business without warm leads.
When hiring such local consultant or BD rep, you should expect to pay a monthly retainer fee and royalty from sales. With high-tech B2B solutions, it's practically impossible to find any experiences business person in the US who would work for you to do prospecting with royalty fees only.
A very good saying in sales is: planning is cheap, execution is expensive. That also applies to prospecting. With no planning , your new US BD rep will act as a blind chicken trying to find the grain. And while eventually it will find some grain, for faster and better results it is absolutely necessary to do some careful planning first, to shorten the sales cycle and help the local BD rep to succeed.
During the planning phase, among other things, the most important steps are:
Eventually, through your prospecting work, with a great value prop, with some smart planning, well-defined targets and after hard work, you will find your early adopters and first success stories. The emphasis here is on “hard work”, as per industry statistics, typical B2B prospecting program will only yield 5% response rate from the outreach (vs. 14% closing rate for inbound leads).
But wait. Even if you do all your prospecting planning and execution by-the-book, you can still fail in finding customers. This is how: When you reach out to a person you do not know, and offer him a new solution to his problem, what is the first thing he will do after your call/email? He will thank you for your information, yes, and immediately after that, he will Google your company, browse through your website, and compare your business to competitors. Or, if you claim you are creating a new category so that there are “no direct competitors” (yeah), the prospective buyer will look at your website and decide if your business profile and value proposition is meeting his industry’s credibility standard. And there, if your website looks mediocre, or don't have any interesting or convincing content, you just lost a deal - without even yet knowing it.
The good news is that you can avoid this problem. You do that by creating a well-designed, awesome website with great user interface and attractive content, including white papers, blogs, videos, infographics and great visuals. And “awesome”, not in terms of what you yourself may think, but awesome as compared to any other similar U.S. company in your market. You can also improve your odds immensely by having a virtual U.S. address and telephone number on your website. It will cost you only $100 per month. Then, after your cold call or email, when the prospect checks you out online, he may get excited and call back, and there - the dialogue begins.
Takehill guidance: for US market entry, well-planned systematic prospecting work is often required to get the first customers and success stories off the ground. But it will only work if your website looks the part, in the context of your target U.S. market.
Welcome! In this Takehill blog post we will discuss:
- About the challenge in entering the US B2B market
- About the importance of differentiation, what is enough: 10% vs. 10x ?
With all positive notes about the US market size and opportunity, nobody should claim that entering the USA is easy. By applying the right methodology, it can be affordable, predictable, and the risk of failure may be lower than in many other markets - but no, it’s never easy.
The other side of the coin is that many US industrial tech sectors are more conservative (or “very pragmatic”) than what we find in Europe, and while the opportunity for scale is there, the adoption of any new technology can be tricky. This means, for example, that if an American business owner already has a “good enough” solution for his problem, then why bother to look for something new? “If it ain't broke, don't fix it” – thinking is often more extreme in the United States, where business volumes and risks are higher than in other smaller markets. Therefore, to be successful in selling a new technology solution to a factory manager in the USA, it is imperative to be able to verbalize, and quantify: how exactly are you eliminating a significant pain, or enable a significant gain?
But let’s assume that you have a compelling and clear value proposition in your country. Then the question becomes: how does your solution compare with other alternatives on the US market?
First, all else being equal, from any U.S. B2B buyer's view point, the fact that your headquarters is behind a 5-10-hour time difference is considered as an additional risk. Even if your country of origin is ranked high in producing innovative high-quality high-tech products, for any practical market entry purposes “made in Germany” or “made in Finland” is not going to give you any advantage. You can be sure that if there is a “good enough” solution in New York, sold by Bob and Jane from their Acme-USA, Inc., then that will be the source for the winning product. To overcome this challenge, the only way is to find such a compelling and unique differentiation that it really moves the needle for the customer.
When you are coming from a foreign business culture and a faraway country, your story about your differentiation as “easier to use” or 10% faster, will not win the business of U.S. enterprise buyers. The differentiation that you claim, with validated performance and competitive advantage, should be significant enough to outweigh the risk that you are an unknown new entrant among existing domestic U.S. suppliers.
Takehill guidance: focus on creating a marketing story that does not just explain your technology details, but instead makes you a far better choice, with advantages and benefits that are closer to 10x than 10%.
There, hope you find this all helpful. Your comments will be very much appreciated.
Until the next time!
Welcome! In this blog post we discuss:
When I see a foreign B2B technology company entering the United States, a Tolstoy quote comes to mind: "Happy families are all alike; every unhappy family is unhappy in its own way." This could be turned into an observation about the US Market entry: “Successful companies look all alike; every unsuccessful company has failed in its own way.”
It is true that many companies fail in attempting to enter the hyper-competitive US market. The positive view, however, is this: U.S. market entry is actually not a very complex process, and when it’s done right, it opens the #1 largest market opportunity without costing an arm and leg. And while those companies’ failure may have been caused by a whole variety of problems, the list of fundamental “market entry errors” is relatively short.
Based on our team’s 20+ year experience in U.S. market-entry execution, I hope this blog will provide some helpful observations and lessons learned on today’s topic: how to become a happy(ier) business by entering the USA?
Although the United States contains only 4% of the world’s population, it accounts for nearly 25 % of global economic output. For most B2B technology firms, USA represents more than 50% of the business potential. As discussed in this European Commission 2016 research study, access to a large market, AND access to growth capital, clearly have emerged as the main drivers for most of European high-tech companies relocating to the US.
Can you build a $100 million B2B technology company without entering the USA? Of course, you can. It is simply that the probability of success for a maximum scale in the USA is higher than anywhere else. For a competitive B2B technology solution, USA presents a homogeneous market where any new industry best-practice is adopted rapidly nationwide. A successful U.S. business owner, as your prospective customer for a B2B technology, is hyper competitive by nature. If there is a new, better way to run the business, he will adopt it immediately (assuming the benefits outweigh the cost) because if he doesn’t, he knows that tomorrow his company will have lost its competitiveness.
According to EC Joint Research Centre’s (JRC’s) latest 2017 report, the US is the leader in Information and Communication (ICT) investments and business expenditure on research and development, spending €64 billion in 2014, followed by China (€33 billion) and the EU (€29 billion). The new technology adoption and investment in technology by US business buyers is clearly exceeding their counterparts.
Another factor making US market entry an attractive option is that U.S. business culture and language is often already familiar to the average European business professional. Management’s learning curve in building successful strategy is therefore relatively short compared to many European or Asian countries, where the cultural and language barriers (20+ languages in Europe, 50+ in Asia) may introduce friction to the market entry, making it slower and far more expensive than in the USA.
An ideal profile for a fast scale-up in the USA
Can any successful European B2B technology business enter the USA? In theory, yes. But if the question is “what is the optimal profile of a B2B company for the fastest scale in the USA,” then we have to offer an additional criterion.
In short, for those readers familiar with the Lean Startup methodology, here is nothing so much new to you. What makes the company scale fast in general, holds very much true also in the US market entry. This is : B2B business models built around well-productized solutions, with modular components, and the least amount of coding or configuration required at the customer installation, become more repeatable (cookie-cutter at best) in the market adoption process, and are therefore the obvious winners in fast scaling.
At the other extreme, business models that are delivering generic engineering services and project work, where every sales transaction is different, struggle to gain adoption at the market entry. To enter USA with these business models will require “boots on the ground” from day one. It is not easy to build a large-scale engineering project business in the USA over Skype. And those engineering and development services that CAN be scaled remotely, such as Software Development, have already become extremely competitive global markets, where the low cost & high-skilled engineering labor from India and China is often difficult to beat.
Takehill guidance - the fastest-to-scale company profile when entering USA: a company with a repeatable product or solution, that has a clearly defined differentiation, quantifiable customer value (ROI), and has demonstrated past performance beyond $1 million in annual sales.
There, hope you find this all helpful. Your comments will be very much appreciated.
Until the next time!
Antti Korhonen is the Founder of Takehill Partners LLC, a Boston based consulting firm. He has helped several European companies entering the US market, and as CEO has built two successful B2B Technology companies with global operations between Silicon Valley, Washington DC, Boston and Helsinki. He lives in Concord, MA, and after spending 12 years in USA he is a dual citizen of USA and Finland.