Five Steps to Successful International Sales Channel Creation
You want to enter a new foreign market? Let’s assume you have a reasonably mature B2B product or service and an existing customer base in your home market that keeps your cashflow in good shape while you are looking for growth in new markets.
You might as well take this in already now: a good product or a lower price alone are not going to be enough to cut it in entering new markets. “A good product will sell itself” is one of those ideas that will sooner or later lead your new business venture into trouble – in the hands of the bogeyman!
1. Back to Basics: Understanding Your Target Market
Find out how business decisions are made and based on which criteria, what the local cost structure is and also what the local price level is in comparison to other potential markets. You might very well also note that in one country price plays a more important role in decision making than quality (and other factors) and in another one, it is the other way around. And we are talking about Europe here.
2. Set Your Expectations Right
Overestimated expectations are common, both in terms of time and results. Locals will be able to tell you about the management decision making process in the country – it may differ considerably from that at home. Is it teamwork or is it definitely the customer boss, who makes all the decisions? In other words, in B2B sell to the right people. The less you have the bases covered – existing meaningful references and a mature product and support strategy and offering to name a few – the longer it will take to get results. It is healthy to expect that it will take longer to get results than you think.
3. If You Are New to the Channel Business Model
Put your best people into the new market entry process. All too often we see people put into this role that have no previous international sales experience nor an understanding of what success in the market entry requires. It takes full commitment and consistent follow-up from the company management of the implementation to get the results you want.
Accept the idea that someone will be making money while selling your product. Channel partners are an extension of your sales force and must be an integral part of your sales strategy. While at it, ensure that your employees have the right and respectful attitude towards your channel partners. This is not automatically the case.
Killing a carefully built sales channel is just a phone call away. The easy way to do this is by selling direct to your reseller’s customer. We have yet to see a well-built and functioning hybrid sales model. The motivation to sell your products disappears in the channel the moment the sales people suspect that you will take their customers from them after they have done the hard part of the sales process.
Get professional support to create a clear and straightforward contract document. None of that single-page nonsense, it will do nothing to build confidence in your business partner about your professionalism and long-term focus into the business relationship. Think of different and possible scenarios in running the business and use examples in your contract on how you will handle them, if necessary. Use the contract negotiation process to build the confidence towards your company as a business partner.
4. Support Your Business Partners
Talking about the sales process – supporting your channel partners is one of your most important tasks. Proper training on your products and strengths up front, support in localising your sales material, common media releases and whatever marketing activities you can afford are the basic thing. Don’t leave your channel alone after signing the contract – it is a common mistake that leads to disappointing results. Instead: feed the channel with as many quality leads as you can.
Keep the channel sales teams motivated, repeat the training at reasonable intervals, create channel programs and organise sales meetings to let them feel they are part of a well-working and professional business. A bit of fun will not hurt!
5. Grow Your Business Together with Your Channel Partners
Keep your channel management well informed of your upcoming new developments and if at all possible, plan your new product launches and marketing activities together. Use the full force of getting the launch messages through to the field using your own and your channel’s resources by training the teams in advance of the events. Self-evident you say? Unfortunately not – just a short while ago we were looking at a large multinational company missing this opportunity.
Consider this: you may think it is expensive to use professionals. Put amateurs on the job and you will see, how expensive it can really get. Follow these first simple tips and it will help you keep the bogeyman at bay – from ruining your precious new business.