Creating a successful international sales strategy requires a deep understanding of business strategy, sales, marketing strategies, and intercultural communication in a global context.
It involves selling products or services, understanding exporting methods, sales channel development, and digital marketing and how they can be leveraged worldwide.
Companies must be agile, adapting their strategies to meet diverse consumer needs while leveraging technology and competent export sales managers to connect with customers worldwide.
A 360° strategy approach ensures a comprehensive method for achieving global success. This article covers how to craft an effective international sales strategy, how to prepare it, and what it should help you accomplish.
The advantages of an excellent international sales strategy
Expanding international sales can provide businesses with several benefits, including entry into new markets and the potential for higher revenue and profits.
As discussed in our other article, Hesitant on Growing Export Sales? Numbers & Proofs on Why You Should Do It, many companies are showing great results in developing export sales and implementing their international sales strategy. We also outlined the many benefits exporting companies reap in the article: revenues, resilience, brand recognition, extended product life cycles, and many more.
An effective international sales strategy is your pathway and plan to success. Do you know that people who vividly describe their goals are 1.2 to 1.4 times more likely to achieve them? It shouldn't be different for companies and their international sales goals.
However, expanding to foreign markets also comes with its own set of challenges. So be prepared to consider entry barriers and obstacles inside your international sales strategy, like navigating the complexities of export procedures, legal frameworks, language, and culture.
Step 1: Make Hypotheses and Evaluate Your Means
To start crafting an international sales strategy, you must first make various hypotheses that you will then confirm or disprove. These hypotheses have two components: where you want to sell and with which method, and what you will sell and with which means.
Where to export
Everyone knows the adage: you can't chase ten rabbits simultaneously. It's also true in export sales. You can't enter ten new markets at once in a year. Pareto's law will probably apply in the long term: 20% of the countries you export to will generate 80% of the export revenues. Let's focus on the 20% of promising countries.
TO-DO: Start with a blank page and list all the countries that come to mind. You may have heard from peers, read articles, or know which countries may be attractive for your business. List 10 of the most promising ones (obvious and unexpected). Unexpected ones could be developing countries with high growth in your industry and low competition. We'll refine the list later.
Exporting methods
To export, you need to agree on a method with which you'd like to expand your business with export sales. There are multiple methods to do so:
- Direct sales
- E-Commerce
- Through an importer-distributor
- Through a sales agent
- Through retail chains
- Hiring a local sales rep
- Opening a sales subsidiary
- Strategic partnership with another manufacturer
Each method has pros and cons and a budget associated with it. Each country and industry reacts differently to these methods. It's crucial to spend time studying what will work for you.
TO-DO: List the method you are comfortable using and have the budget and human resources for.
What you will export
If you have an extensive portfolio of products or services, you need to determine which items are the best-selling and which will be well-suited to international markets.
If your products or services are suitable for your domestic market only because they have specificities that do not apply to your target markets, it could kill all your efforts. It's essential to check the product-market fit.
TO-DO: Select a few products or services to start with. Again, the Pareto law is of help here: start with the 20% of products/services that generate 80% of your revenues.
With which means you will export
Exporting to new markets requires a team and tools. We recommend evaluating the means at your disposal in your company.
Let's take an example. You decided to work with importers-distributors in 3 new countries:
- Who will find them?
- Who will be the sales rep managing them?
- Do you have a price list in place?
- How will you deal with aftersales services?
- Do you have marketing in their language or at least in English?
- Same question for the website?
- Do you have a budget for business trips abroad?
TO-DO: List the means at your disposal and confront them to the exporting methods you think are best for you.
Step 2: Laying the Groundwork for a Robust Strategy
To prepare a robust export sales strategy, you need data on the markets' potential, the potential customers' needs, the means required to achieve it, and the obstacles to overcome.
Let's dive into the preparation phase before laying down your plans.
Comprehensive Market Research: The Keystone of Success
Understanding the dynamics of international markets is crucial for any business aiming to expand its reach.
Effective market research plays a pivotal role in identifying consumer behavior, market trends, competitor strategies, and regulatory environments across different countries. This insight is invaluable for making informed business decisions and developing successful market entry strategies.
Below are the aspects your market research should provide answers to.
Identifying Market Needs and Client Preferences
Understanding what potential customers in different regions need and prefer is vital for tailoring products and services that appeal to them.
Clients in different countries are expecting different products for many reasons:
- The market organization is different.
- Tastes are different.
- Working methods aren't the same.
- Sales channels and purchasing methods aren't the same.
- Culture isn't the same. There are cultural norms.
You can arrive with the best product in your domestic market, and it can very much fail in another. Make sure you have a product-market fit.
Analyzing Competitor Strategies and Market Trends
Keeping an eye on competitors and current market trends will help your business stay ahead and make informed decisions. If your competition is selling using a specific sales method or a different product than you expected, that might indicate you should consider the same, too.
To give you some context, we had a few clients who were sure they needed an importer-distributor in France. When we interviewed the market (potential distributors and clients), it appeared that all their competitors are using their subsidiaries to sell in France because there are too few distributors in France, or the market wants to buy directly from the company in this specific industry (especially in the public tenders field).
Cultural Sensitivity and Localization Techniques
Cultural sensitivity and localization techniques ensure marketing messages resonate with diverse audiences. It's part of the marketing strategies to set up. We have various ways of viewing the world, country histories, and consumption preferences.
Adapting your marketing as a consequence is a must; it can crush or boost your sales tremendously. Think of your marketing materials, sales pitch, story-telling, and packaging. Make sure they all are localized and fit the culture norms.
Check if you must adapt your marketing strategies to the local language and culture. If yes, will it be you doing it or your local partner?
Buyer's journey and Purchasing method
To succeed in the target market, you need to understand how and where customers buy.
We've encountered many companies who have no clue how their products are sold in the target market but want to implement the sales channel that is most convenient for them. It does not work like that.
Remember, the customer is king: they decide from whom and where they buy. They also sometimes decide at which price.
Sure, you want a sales agent who works on a commission-only basis and generates tons of revenues doing all your work. Still, your clients buy directly from the manufacturers here, and sales agents don't exist in your industry. Should we stay in LaLaLand or make sure you sell?
Entry barriers
Entry barriers are frequent in some industries. They're here to protect the consumers or the industrial sector. Some are simple formalities to make, and some are more complicated. They can be diverse in nature:
- Government policies.
- Certifications to obtain.
- Taxes.
- Regulatory requirements.
- Networking is required to have access to some clients.
- Obligation to have a legal entity in the country.
Step 3: Confirm the Priority Markets
It's time to reconcile Step 1 and Step 2. You made hypotheses on potential markets to enter, and you've studied them.
Now you have:
- Hypothesis step: A market list of 20 countries.
- Hypothesis step: Which exporting method do you prefer?
- Hypothesis step: A shortlist of products and services you want to export.
- Hypothesis step: What can you afford to do to export?
- Market Study step: A rough estimate of market potential per country.
- Market Study step: Products / Services adaptation needed.
- Market Study step: Preferred customers' sales channel in the country.
- Market Study step: Need in marketing.
- Market Study step: Entry barriers.
When you compare your hypothesis to the facts, you can rank the country by priority.
If a country has high potential but requires you to change your products and marketing and has long certification processes, selecting another one might be more convenient.
Finally, depending on your resources, pick between one and three countries you want to enter next year. These are the countries you will enter as a result of reconciling your market study and research.
Ensure they're compatible (i.e., they are in the same area because you have a limited travel budget, the same sales channels because you can't hire an export salesperson and develop a new e-commerce website, etc.).
They will also be your sole objectives because, remember, you can't chase ten rabbits simultaneously.
Step 4: Selecting the Right Channels for International Sales
Choosing the most effective channels is crucial for reaching international customers effectively.
It depends on your budget, means (logistics, supply chain, human resources, etc.), and the preferences of the target countries.
Here are some strategies you can pick, along with the pros and cons.
Direct sales
You send your salespersons abroad to sell. This method is good to implement if you want to export to a neighboring country, decent in size, and when you sell high-ticket products or services that don't require frequent visits. You manage everything from the headquarters. It requires to hire someone bilingual.
E-Commerce
E-commerce offers a wide reach, allowing businesses to connect with customers globally without a physical presence. This option is attractive for its lower overhead costs compared to a full subsidiary.
On the other hand, it requires an international shipping strategy and a good system to handle taxes, deliveries, and aftersales or returns. Not all customers are ready to order online.
Through an importer-distributor, sales agent, or reseller
A great option privileged by many B2B companies considering international expansion. You have a single point of contact with a network of existing clients and prospects. On the other hand, they have control of your market, and you have to trust them in many aspects, such as customer service, pricing, and your brand image.
Through retail chains
Sometimes, retail chains can import and distribute to their various locations in the country. If they like your products, they are huge clients that can generate tremendous revenues.
Some are so large that it's hard to contact the purchase manager of your product category. It might take years to reach the right person.
Hiring a local salesperson
You can hire a salesperson in the country to start selling on your behalf without needing a subsidiary. Nowadays, great solutions like Employer of Record exist to test a market with a first salesperson to see if you get traction.
The disadvantage of the solution is that there is no management team nearby to manage and support the salesperson. You need to find someone highly autonomous.
Opening a sales subsidiary
Opening a sales subsidiary with a sales and support team is a great option for growing export sales in a given country. You control all aspects of the business and can implement the strategies you'd like.
That said, achieving it requires strong follow-up from the headquarters management team and a certain budget.
Strategic partnership with another manufacturer
The final option is to develop a partnership with another manufacturer. It could be a sales agreement or a licensing deal. This solution has similar pros and cons to having a distributor: You need to trust your partner to achieve the targeted results and can't exactly control what it is doing in the country.
Our company, Masson International, supports foreign companies entering the French, Swiss, and Belgian markets through most of the channels mentioned in this chapter. For more information, consult our Services page.
Step 5: Preparing your Structure to Execute Your International Sales Strategy
Now that you have crafted a well-thought international sales strategy, it's time you reflect on the changes (or continuous improvements) you need to implement in your company.
Expanding your business by growing export sales requires that you prepare your structure to sustain a heavier workload, execute new tasks you haven't done before, or improve and adapt aspects of your existing business for international audiences.
Here's a list of key components that your structure needs to reflect on to better serve international markets and grow export sales:
- Leveraging social media and digital marketing for global reach.
- Assembling a multicultural sales team for sales and aftersales.
- International recruitment strategies and training programs.
- Effective communication and team collaboration across time zones.
- Multi-lingual marketing strategies and localization of products.
- The product or service team is accustomed to working with foreign clients.
- Advertising internationally.
- Streamlining payment methods for global customers.
- Securing payment methods so you can receive payments on time.
- Currency conversion, exchange risks, and financial regulations.
- Transfer pricing guidelines.
- Mastering international shipping and logistics.
- Navigating customs and export regulations.
- Monitoring export sales performance.
- Gathering foreign customer feedback.
In conclusion, crafting an effective international sales strategy is a complex but rewarding endeavor. By understanding the intricacies of global markets, leveraging the right methods for exporting, and preparing a robust strategy, businesses can position themselves for success in international sales. While the process may come with challenges, the potential benefits of expanding into new markets and achieving higher revenue and profits make it a worthwhile pursuit. With careful planning, adaptation to diverse consumer needs, and a comprehensive approach, companies can pave the way for global success in their international sales efforts.
