Accidental - AND Profitable - Export SalesIntroduction to SignalsFromTheOP
Hi, I'm Ed Marsh. Welcome to this episode of Signals from the OP, where I look at strategic issues that I think are important for industrial manufacturers trying to figure out how to grow revenue in today's markets. Today we're going to talk about global market development. My contention is you can actually sell globally accidentally, and that's the best way to do it.
Here's the thing, export is a daunting topic. There are a lot of myths and stories. There are a lot of people that have tried to export and had a difficult time. There are concerns about risks and costs and payments, and logistics and compliance, and all kinds of things that people worry about.
Those tend to be transactional issues. The biggest challenge has always been how to find buyers.
What companies used to do, kind of the traditional approach, was to make a decision, "Yes, we want to sell globally. We want begin to export." Where are we going to go? Well, it begins with a research project. So you send the intern to the library, or you reach out to one of the state or government offices and say, "We want to export. Where should we go?", and people would begin doing research. That research often boiled down to basically population, and maybe looking at NAICS codes or harmonized codes to gauge the flow of different products or services into markets. Then people will create the simple matrix, big population, big product flow. That's where we want to go.
Honestly, many companies went to China and India. I did the same thing. I went to India. I'll tell you that story in a second. What that meant was then companies would begin to invest tremendous resources. If we're going to go to China, we're going to have to open an office there. We're going to have to find partners. We're going to have to have employees. We going to fly executives back and forth. You start to run up costs in travel and in distraction and lost attention on the primary domestic business.
As American companies, we're impatient. We knew it wasn't going to take a quarter to profitability, but we thought in a year or two, we'd be making some money. Here we are three or five years later. Not only are we not making money, we're not even breaking even yet. We haven't recouped our investment. We're just going further in the hole.
Then, it's a tough choice. There's some cost at that point. Do you continue to, as the saying goes, put good money after bad? Or do you say, "We made a mistake. We didn't go about this the right way," and withdraw? At that point, many companies would withdraw, but they withdraw with the understanding or misunderstanding, if you will, that it failed because export isn't right for them, or you can't sell their product internationally or something. In fact, it just was really the wrong approach.
That's the old way to do it. That's the path I followed when I opened my company in India, and the reason I hemorrhaged money. I learned a lot of great lessons, but it cost me a lot to learn those lessons.
Today is different. The reason it's different is one that we all know, the internet. The common wisdom is that there are more internet connected mobile devices in the world than there are tooth brushes. Just stop and think about that for a second. That's alarming, but it's also really instructive. What that means now is that if you begin to do digital industrial marketing the way you really should for your business domestically anyway, the international buyers are going to find you, too.
This huge challenge of how to go to find the buyers, how to build market awareness, how to build brand cache in markets. It becomes irrelevant because now the international buyers are going to find you, just like the domestic buyers find you.
- There are certain statistics that I talk about often. 93% of B-to-B purchases start with an online search. That's a global number. That's not just domestic US.
- Buyers are 70% of the way through their buying journey before they want to talk to a sales rep. That means they do their research on the internet. They look for information. They look for solutions. They look for resources. They look for vendors.
- Buyers 74% of the time select the vendor that first provided value as they were trying to understand the problem. That's true of buyers in any country around the world. In the business context, people are trying to make their business better, save money, make more, increase output, reduce costs, whatever the case may be. That's true everywhere.
- Only 3% of the potential buyers for any given product or service are in the market at any given time. 97% of the buyers are wrestling with business problems and not necessarily looking for a solution.
What that means is, as you grow your industrial marketing the way you ought to for your domestic business anyway, not just according to a check list with a certain number of blog posts and a certain number of social media posts, but really built on strategy from the company, creating a revenue growth strategy, and then creating an executional framework for that digital marketing that supports the strategy with very rigorously selected and identified and executed tactical steps. As you do that, you're going to attract more international leads.
As you attract those international leads then you find the real opportunity. Not only are you potentially acquiring customers with very little international business growth acquisition cost, but you're collecting data. You know, of course, in aggregate your traffic, your conversions, your leads, your inquiries, what's in your pipeline and what you're actually selling.
You also know anecdotally which markets you're selling into, where the negotiation is comfortable and pleasant versus just like a root canal, where language issues are not a barrier or a larger barrier, where pricing is a problem, where payments, foreign currencies, are a real struggle or where it's fairly easy to get those done, customs and compliance and shipping issues, all those kinds of things.
You know in aggregate where your visitors are coming from, where you're getting deals, and you know anecdotally where you're comfortable doing it. Now, you've got a real matrix that means something.
With that information, you can begin to select a couple markets that you think merit some attention. At that point, you can begin to make incremental changes from your office. You can basically start with very low risk and very low cost to make some tweaks, some local language content, some local language key words, maybe a landing page, maybe an offer. Maybe you get a local language TLD (top level domain) like .de for Germany. Maybe you create a micro-site in the foreign language. Maybe you just put Google Translate on your site and let yourself collect leads when it happens.
I can tell you, this isn't theoretical. I've seen this work with client after client. A couple quick examples.
The US subsidiary of a German company set up a website here to focus on the American market and we built a very strong digital platform that was well thought out, strategically conceived and well executed. Before long, within six or eight weeks, starting from nothing, they were harvesting more international leads for the parent company than the parent company was itself. The company's been in business for 80 years in German.
Another example, a small industrial products durable goods manufacturer, a client of mine in Nashville, has never sold internationally. They didn't have any aversion to it, but not aspiration to do so. I said, "Okay. Let's just work with this. You're going to see what happens." After about six months they started to get some international leads and are now selling to Romania, to South Korea, and have a number of other projects going on, including several in Oceania. Many companies find strong interest in their products in the Australia and New Zealand market.
So, it works. No additional work, nothing required until it actually came time to calculate shipping costs to do the quotes. It's pretty cool. At that point, it's only transactional details to manage and the US export.gov office or the state offices near you have experts that are there everyday to help you do that kind of stuff.
To recap, the old way was very speculative. It was risky to the business. You made big investments without a clear payoff. You distracted your executives from the primary business they were working on here. There was cost and in many cases ended up being sunk costs.
New way, you're making data-based decisions. You're extending incrementally, and your growth, your international sales are actually a byproduct of what you ought to be doing for your business, anyway, with solid digital marketing.
You've probably heard the statistic that 95% of the world's buyers are outside the US. Now they can find you. As you begin to build this digital footprint, industrial marketing and this expertise, then you can decide if you want to extend physically. Maybe you go to a trade show. Maybe you find a channel partner. There are all kinds of approaches you can take gradually after that, but you're doing it based on information, data, relatively low risk, low cost initial steps and then you're going to where you've got demonstrated opportunity.
If you're intrigued by this, I've got a guide that you can download from my website here. It's about 15 pages. It takes you through exactly this process.
So, it you like this kind of counterintuitive or fresh look at business issues, particularly some of the larger strategic revenue growth challenges manufacturers face, I'd love to have you subscribe to these video blogs. You can do that at SignalsFromTheOP.com. I'm Ed Marsh. Thanks very much for joining me today. Look forward to seeing you on the Signals From The OP blog.