For many years, I’ve been on a professional journey to understand what “works and what doesn’t” when penetrating and driving growth in export markets. I’ve made a lot of mistakes along the way, both as an in-house Marketing and Sales executive, and as a consultant.
Over that time, I learnt many lessons from clients and colleagues in various industries, some of them very experienced managers, and some of them very young (notably in start-ups), making their first penetration attempt…the younger generation is much more talented than our generation…
At the end of each year, I typically summarize all the insights I’ve gathered. Some insights are basic and have been known for many years, and some are really new, born out of the changes we are experiencing today (new technologies, the internet, COVID-19, new business models, and so on). In particular, this past year has been quite extraordinary.
Processes and trends that were relevant to very specific industries, especially in high-tech, have now reached more traditional (low-tech) industries.
In the past years, I have served as the professional director of Smart Money and Shalav funds, both established and managed by the Israeli Ministry of Economy, that give financial support to export companies. This role enables me to share insights from all aspects of Israeli export.
In this article, I’ll summarize all the insights I’ve gathered over the past six years in the field.
1. There’s Marketing, and then there’s International Marketing
Quite a few companies mistakenly place domestic marketeers in international marketing positions. Unfortunately, they don’t have the appropriate skills to lead and promote international business interests. Some organizations don’t understand that marketing is a profession with a conceptual infrastructure and distinct practices, and that there is “right” and “wrong” marketing.
“Common Sense” is a necessary condition for making good decisions, but it’s not enough. Furthermore, most companies make no effort to improve the professional abilities of their marketeers through training and systematic learning from colleagues.
2. Marketing, sales, and business development are different professions
Every company has marketing and sales roles. These are unique and complementary professions. Each profession is suitable for people with a different skill set and personality structure.
Sometimes there’s no choice, especially in small companies, and one person needs to take on both marketing and sales roles. Even so, they’ll still perform separate tasks for each discipline.
In a lot of cases, the job definitions and responsibilities of both roles are unclear. Sometimes it makes sense to set up a business development function as well. Business development is not the same as sales.
3. Digital marketing is a profession that requires a variety of skills
It’s impossible to be an international marketer today without professional digital skills. Even if you operate in a traditional industry and a conservative market, your customers gather information online.
They will always look for information about you on the internet, and form their opinion based on what they find. This will happen when they’re looking for a solution to a problem that concerns them, and still happen even after you’ve approached them proactively.
A technologically up-to-date website and high-level marketing content are essential for success for any company.
Within digital marketing, the range of specializations is wide. It’s important to acquire capabilities in digital skills that are critical to you through the recruitment of the right employees or by using outside experts.
4. Marketing is a profession that sometimes requires making counter-intuitive decisions
Intuition is an abstract ability that managers tend to rely on too much. When you do not have the knowledge and experience in the required context (market, culture, field of practice, or product), chances are your intuition will lead you to make wrong decisions.
Here are a few common but misleading intuitive insights that seem plausible on the surface:If the product meets the needs of the Israeli customer, it will probably meet those of the customers in the target market.
+ A big market is better than a small market because it has more opportunities.
+ If we succeeded in Germany, there’s no reason why we won’t succeed in France or England.
+ If it took us half a year to close a deal in the US, it will take a similar amount of time in Germany, China, and India.
+ The only way to deal with mistakes is to make decisions that are only based on information that is relevant to the specific market.
+ Before making any significant decision, you should gather specific, required information on the target market.
5. Successful penetration into a new market involves cracking a multi-variable formula
Penetrating a new market is no easy task. The knowledge and experience gap between the Israeli-based exporter and active competitors in the target market is huge.
To penetrate successfully, you have to collect systematic information on a long list of variables, the main ones being: customer needs, competitors’ offerings and how they operate, and distribution channels.
Only through collecting this info can you make the right decisions, find the right place in the target market, and determine the exact format of your activity. There are no shortcuts and no magic solutions, it is an ongoing effort.
6. Penetration into a foreign market should not reflect the domestic market’s activity ‘with slight adjustments’
When entering a new market, the natural tendency of companies is to rely on the experience they gained in the local market and other markets in which they operate.
Inevitably, there are differences between markets, and the experience gained in other markets can be misleading.
In the beginning, conclusions from one market are at most a hypothesis for the new market that will need to be validated.
7. You can’t be “half pregnant”
Companies that decide to tap into international channels must be 100% committed to the move. You will not make any achievements if you don’t allocate the required financial and manpower resources. Penetration into a foreign market costs quite a bit and requires managerial attention.
Insights on choosing a target market
8. When choosing your first international market, choose one that’s relatively easy to penetrate
An easy-to-penetrate market is a market without significant cultural gaps from the domestic market, can be validated quickly, is open to foreign players, does not require much customization of the product, where you can grow on a small budget.
For example, Greece might hold more potential for you as a first market than Germany.
9. Do not infiltrate more than two markets at a time
Most companies do not have the resources to penetrate several markets simultaneously. In most cases, turning to several markets in parallel reduces your chances of success.
It is better to be a significant player in one market, than a marginal player in five markets.
Only break this rule if you have a really good reason.
10. Focus on gaining momentum in one market
Your primary goal is to gain momentum—that is, have a continuous stream of leads that you know how to translate into transactions—in one market.
11. It takes a long time to create momentum in a new market
OK, you’re entering a new market, and visibility isn’t great. It’s hard to know in real time where you are in the process of penetration, even when there are positive indications like a first deal reached quickly, or interest from a very important customer.
On the other hand, early failures are not necessarily an indication of an inappropriate market.
The role of the marketing manager driving the penetration process is to communicate and explain the status to all concerned within your company. Only when momentum begins to form will you know that you’re in the right direction.
The first significant event, and an indication of the onset of momentum, is when a customer makes a second purchase, or when a new customer makes a purchase as a direct result of the recommendation of an existing customer.
12. The more you focus on a market or smaller market segment, the faster you’ll grow
Focus either on a niche within a large market or on a small market because your resources are limited.
Many Israeli companies, even those that don’t have the minimum required budget, tend to start in the huge markets; USA, England, Germany, and more recently China and India, without identifying and focusing on a specific market segment within them.
Your focus should be on the group of customers who have a problem that you are able to solve better than the competition. Contrary to popular belief, focusing on a small segment allows you to achieve better business results faster, as opposed to spreading your efforts across multiple segments.
Focus allows you to make necessary adjustments to customer requirements in the product, price, distribution channel, messages, and so on.
In my experience, most Israeli companies, even very small ones, violate this rule, with the unfounded thought that dispersing and / or turning to a large market increases their chances of success.
Deciding on risk diversification is often a bad excuse for opportunism, and is not a good reason for having a reckless policy.
13. Working with clients outside the market goal is almost always a waste of resources
There are no easy deals. Do not be tempted by “opportunities” outside your focus, unless you have a clear indication that the deal is easy to achieve or provides valuable insight.
Companies tend to divert resources to random opportunities too easily, and they almost always never materialize.
14. Define an ideal target customer profile
An ideal target customer is one for whom the penetration effort is relatively low, and the scope or profitability of the transaction is relatively high.
+ Define your ideal target customer taking into account the following four variables:
+ The geographic market
+ The market segment within the geographic market (geographical, vertical, or other)
+ A specific characterization of the ideal target customer within the segment (sub-segment / niche)
+ The decision maker profile
+ And make a continual effort to refine it.
15. Beware of very large and “promising” customers
The chances of you closing your first deal with a huge customer are very small, even if they seem to show interest and enter into dialogue with you. In most cases, you’ll invest a lot of resources (time and money), and not much will happen.
To avoid this, look for solid evidence from the customer that you are progressing towards a deal.
16. Be realistic: how long will it take you to reach your goals and achieve results?
Most companies underestimate the time it will take to achieve their goals.
Improving accuracy in evaluating your schedule calls for understanding the required preparation process, accurately identify the customer purchasing process, and to formulate the required marketing and sales process accordingly.
Improve the estimation accuracy of your penetration schedule based on breaking down processes into stages.
For example, the preparation stage includes; planning, conducting market research (gathering and analyzing information), formulating a plan, initiation, making corrections in light of market feedback, and acceleration.
Try to estimate what each step includes and how much time it will take. The more you can break down each stage and step into details, the more accurate your assessment will be.
17. Rapid failure is good
You want to get to the answer of this fundamental question as quickly as possible: Is the new target market the right and appropriate market for you? Is the customer you’re investing in right for you?
Formulate clear success criteria for what is a suitable market and customer, and what is not. “Cut” fast if the market or customer doesn’t meet your needs, thereby saving your resources.
In most cases, optimistic scenarios don’t materialize.
18. China and India, India and China
I can’t emphasize enough that these are tough markets, and extremely hard to penetrate.
For some reason, companies that have failed in other, more easier-to-penetrate markets, think they’ll succeed in China or India. In reality, I’ve never seen this happen.
Insights on Gathering Information
19. General, off-the-shelf market research is never enough
When you penetrate a new market, you must make five key decisions: the segment you are going to focus on, the product you will sell, the price and payment terms you will require, the distribution channel you will use, and the marketing communications you will operate.
Each decision has its complexities, and comprises a number of sub-decisions.
Market research, performed by a third party for their own considerations, will never be specific enough to allow you to make the “right” decisions for your company.
At best, it will provide you with a general understanding of the market. This rule applies to any secondary information you collect.
20. Before contacting customers, gather information about them
Before contacting your potential clients you should gather information, and at very least formulate hypotheses, regarding the following five topics:What is the exact problem of the customer?
+ How are they solving that problem today?
+ What are the main benefits they expect from their supplier?
+ Where do they go to gather information before making a purchase, and who do they trust?
+ Where do they like to buy a product like yours?
21. Start by gathering information from visible sources
The sales process begins with an in-depth collection of information about the customer. You must read everything that’s been written about them and by them, such as their website, their financial reports, any interviews of executives published in the media, and all marketing content published by the company or its executives.
You must analyze their digital assets and online activities. In addition, perform keyword research, join active industry LinkedIn groups and forums, and try to talk to analysts covering the specific field and company.
22. Good business decisions cannot be made without human knowledge (Humint)
Today’s easy access to data causes many companies to engage mainly in ‘data-oriented market intelligence’, online research (competitor publications, information sites, webinars, vendor comparison sites in the mass wisdom model, social networking intelligence, etc.).
Sometimes managers will complete knowledge gaps by purchasing publications from research companies, reviewing available analyst reports, and gathering information at exhibitions and conferences.
However, good decision making must be based on human resources that brings with it an understanding of subtleties.
You can tap in to real human experience from the following main sources: interviews with employees and former employees at the potential client organization, interviews with managers who worked for competitors and provide the internal competitor angle, interviews with managers who work for competitors’ clients that provide customer perspective, and interviews with partners (technical / business) or distributors of competitors.
From distributor knowledge, you can learn about any potential difficulties in selling your product and challenges in positioning vs competitors, etc. Technology partners can give you knowledge regarding the ins and outs of the competing solution. And so on.
23. There is no such thing as a bad meeting with market players
There is a huge knowledge gap between you and your new competitors, who have probably been active in the target market for many years. You can learn something from every meeting you have with a player in your target market.
Distributors, customers, colleagues, experts, competitor employees, former competitor employees, etc. know everything you don’t know yet – and need to know.
Insights on building infrastructure for penetration
24. Don’t transfer ownership of the penetration into an outsider
Market penetration is a strategic move for you. Managing the penetration process is your responsibility, even if it’s possible and recommended to enlist the help of external parties such as consultants, distribution channels, and strategic partners.
An outsider will never be as committed to your success as you are. If you’re not willing to take risks, don’t expect an outsider to do so for you.
25. To grow in a new market you have to manage three processes
+ Successful penetration into a target market requires: Closing knowledge gaps (when you first meet your new market, you’re lacking a lot of information that will help you to make “good” decisions).
+ Improving the suitability of the product, business model, and distribution channel, to match the specific target market.
+ Progress vis-à-vis customers (obtaining first and subsequent customers) based on progress in understanding the market and matching.
26. Get to know your competitors well
You need to know your competitors well. They’re the ones your customers plan to buy from. Remember, in the customer’s eyes you’re just a small company, and, for example, it’s unlikely they’ll perceive you as a competitor of Salesforce, even if you have a fantastic CRM solution.
Your Value Proposition must show the relevant advantages to the customer over the right specific competitors from the customer perspective.
27. Formulate a sharp Value Proposition
The Value Proposition is a clear and accurate statement about the value (qualitative and quantitative) and the benefits you provide to your customers over your direct competitors.
Your Value Proposition paints a clear picture for the customer of the expected improvement between their condition before the purchase (problem / pain) and after the purchase (solution / value).
This concise, precise statement will open doors for you with customers, as it whets their appetite.
The Value Proposition in its concise version (a sentence or two) should appear on the homepage of your website.
28. Customers buy “results” rather than products and features
Customers in the B2B world look for products that will provide them with added value in at least one of the following three areas: increase their revenue, reduce their expenses, or provide a better experience for their customers.
The role of marketing is to illustrate this added value to customers.
29. Maintain clarity and simplicity when explaining the benefits of your solution
Make a great effort to distill the direct and indirect benefits of your solution and formulate your messaging.
Refinement comes through meetings with customers, distributors, and other market players, and not just from analytical thinking in the office.
Put your messaging to the test in the field; to what extent is it easy for customers to understand the benefits for them in your solution? To what extent are you able to clearly present the value to participants from different disciplines in the buying group (COO, CIO, CFO, user, etc.)?
30. Make a visual representation of your solution
A visual of your solution and its benefits will help you greatly. An illustration is more effective than any Word document, PPT presentation, or explanation will ever be.
Invest in demos, videos, 3D printing, and so on. These days remote visualization is mandatory.
31. Make an effort to tailor your solution to the way customers work
Does your solution fit into existing practices, or require customers to change how they work?
Selling a product that requires customers to change work habits is a difficult task that requires a lot of resources when selling and onboarding. It will also impact the budget required for penetration, the skills required from your team, and your schedule.
32. Find a Domain Expert in the target market
The Domain Expert is typically an experienced manager in the target market, someone who has worked for a company that markets its products (similar or complementary to yours) to customers that match your customer profile. They should have a marketing and sales orientation, not just technical.
The Domain Expert serves as a “guide” to your new market, and makes their knowledge, connections, and experience available to you for a fee. They should help you understand the market and reduce the knowledge gap between you and your local competitors.
In my experience, companies who hire a Domain Expert, almost always, make fewer mistakes and have an accelerated pace of market penetration.
33. Without a champion, the chances of closing a deal are low
Locating and working with a champion is critical in complex B2B transactions.
The champion is someone in the customer organization that cooperates with you. Without a champion, your marketing and sales activities will be only “kinda” / “sort of” accurate because you’ll find it hard to successfully diagnose the customer’s pain points and decision-making process. This makes it challenging to execute an effective sales process that influences the customer’s decision making.
That said, not every friendly person who expresses an interest in collaborating with you can be your champion.
The ideal champion is a player in the client’s organization with the following characteristics: access to the relevant information in the context of the transaction in question, influential in the organization, and is someone for whom it would be worthwhile personally to promote your solution specifically.
34. Identify influencers and contact them
Influencers are usually consultants, analysts, or other experts in the arena. Try to understand who they influence, and what kind of incentive will get them help you.
Some prefer financial incentives, and others prefer non-financial incentives such as access to new information, respect, participation in a challenging project, and so on.
35. The way you organize your marketing and sales teams will affect business results more than anything else
Figure out who to recruit, what each position does, who is responsible for what, how different positions work together, and the organizational structure that best serves your goals. This rule isn’t any less true for small companies where the workforce is very limited as it is for large companies.
Define your optimal marketing and sales processes. These should derive from the customer’s acquisition process, and from that you can hone more specific role definitions.
In recent years, we’ve seen this way of thinking create new roles in marketing and sales such as: Success Manager, Sales Development Representative, Chief Revenue Officer, as well as teams that combine employees from different functions such as Growth teams.
36. Look for a model company with a success story
Companies in your field, foreign or Israeli, have already tried and succeeded in penetrating markets abroad. Look for a company that can be a successful model to learn from. One that has already “done it”, and already has an effective model for international penetration.
Your aim is to find a company that operates in your target market, is relevant to you, and to adopt the success story’s model, and adapt it in each market you enter. Checkpoint, for example, initially relied on distributors, and saw Cisco as a role model in distributor management.
Insights on winning the first customers
37. In the beginning, look for any opportunity to sell directly to customers in the target market
In the beginning, especially with complex products, you only have your passion and your product knowledge to help you close a deal with a foreign customer.
It is certainly possible to enlist the help of local contacts and knowledge to open doors and understand the market, but the sale must be made by you.
The appointment of intermediaries and the expectation that they will produce growth is almost always unfulfilled. Even if you fail selling directly, you’ll learn a lot for future success.
38. Contact customers directly & frequently
There are three channels at your disposal for contacting customers remotely and directly; email, phone, and LinkedIn.
Flex your abilities to generate interest in potential customers using any of these channels.
Adjust the use according to the type of customer, and the type of product you have.
39. Focus on the right customers in the target market
After building the right product, choosing the customers in your target market is the second-most important decision in marketing.
Selecting a customer isn’t simply about identifying a geographical target market in which you’ll operate, it’s much more than that. You’ll need to identify a specific segment / vertical within the geographical target market, identify a specific customer type (a sub-segment within the segment), and identify the relevant role(s) within the customer organization.
Quite a few companies operate without focus using the “Spray and Pray” approach with the hope that something will catch on. It doesn’t.
40. Issues important to B2B decision makers (1)
Knowing the customer point of view is mandatory. From a general perspective, the following issues are important to the decision makers in the B2B world:
+ What benefits will you provide? What problems will you solve? (In simple and clear language that can be understood by someone non-technical)
+ How does it really work? Interfaces, integration, and what additional costs are required to run the product?
+ Return On Investment
+ What are the indirect costs of the solution? (Meaning the total cost of ownership – hardware, maintenance, training, special recruitment, etc.)
+ What are the options for expansion, upgrade, and scalability?
+ What existing installations do you already have?
41. Issues important to B2B decision makers (2)
Looking at this in a slightly different way, two issues affect the client.
Firstly: Fear. The fear of making a mistake in selecting a supplier, causing economic costs to the company, and also damaging the decision maker’s image as a result.
Secondly: Greed. The desire to earn as quickly and easily as possible. Always remember that the typical decision maker is conservative, risk-averse, and skeptical. It’s not easy to persuade them to choose a small and unfamiliar supplier from a distant land.
42. Validate early, Validate often
You enter an arena you don’t know and therefore, validate early. By validating where you’re at in the early stages of your penetration activity, you’ll avoid investing resources in an unsuitable market and unsuitable customers.
Right from the beginning, look for evidence that you provide substantial value to customers in your target market. Then look for evidence that your chosen penetration method is appropriate.
You operate in a dynamic arena and therefore you must validate often. By validating often, you’ll be able to detect changes in business circumstances, and avoid relying on outdated assumptions.
Successful penetration into a target market is a process that involves many decisions, all of which are critical to success. Identify each decision you need to make, and check the accuracy of the assumptions on which each decision is based.
There are cases where a single decision, based on a wrong presumption, can disrupt the penetration.
There is only one way to validate assumptions; meetings with clients, experts, and distribution channels. Not for the purpose of selling, but to appraise your situation.
43. Don’t be afraid to ask for help from people who don’t know you
You can get help from someone who’s senior in the industry, a consultant, the manufacturer of a complementary product, or even an investor in the field that didn’t invest in you… the referral itself doesn’t require much effort, and the worst case scenario is that you won’t get an answer or will get a no, but if it’s a yes, the benefits can be huge.
Here are some rules:
+ They’ve probably never heard of you, so try and reach them through someone who knows you both.
+ “Cold-calling” (through email, phone, message, or LinkedIn) is always less effective.
+ Gather information on them, and try to understand what interests them.
+ Make your request succinct. The short referral, usually by email, should contain all the necessary information that will allow them to easily decide whether they want to help you.
+ Ask for one specific thing, for example, “Can you introduce me to …”.
+ Write in a format that allows them, without effort, to forward your request.
+ Try to instill confidence that there’s no risk to them in fulfilling your request, in fact the opposite. For example, mention your past achievements or include a common denominator (for example: you are both graduates of the same university), etc.
+ Briefly explain how they can help you, and don’t hesitate to offer payment.
44. Provide value in your very first meeting with a potential client
One of the biggest challenges in the B2B world, when starting sales in a new market, is to get first meetings with customers that subsequently generate follow-up meetings until the deal is closed.
The big professional challenge here is to arrive at your first meeting armed with information about the problems that bother them, and to provide value even in this first interaction.
If you can do that, the meeting will deal with your customer’s problems, and not with questions for the purpose of learning the customer and their problems.
The client won’t feel that you wasted their time, and will be ready for another meeting with you. Making sure you give that value in a first meeting requires professional and sophisticated preparatory work.
45. Prove to potential customers that the risk in choosing you is low
When it comes to persuading a customer to make a purchase, most exporters focus on emphasizing their benefits and ignore customer concerns. Purchasing a product from an unknown company (Israeli!) is perceived by the customer to be risky in the following aspects:
+ Functional (will not work as promised)
+ Financial (will we pay a lot without justification? are there unexpected indirect costs?)
+ Personal professional reputation (my company chose a solution because of me, and any failure will damage my professional reputation)
You must explain to the customer why choosing you is not risky for them. Invest in developing tools that will reduce customer risk perception.
You might see if you can get a recommendation from a market player with status, agree to a trial period (make sure you have clear success metrics in advance), try to make a small deal that will prove your abilities, agree to terms of the deal that reduce risk (payment in stages), and so on.
46. Focus on building and strengthening customer trust
When penetrating and starting operations in a new market, you have only two advantages (versus many disadvantages), and that’s your product and your team. Customers will choose you if they trust you.
Your existing product and the way your team acts are the resources available to you to build that trust. At any crossroads you pass with your customers, choose the action that will strengthen the customer’s trust in you (even if it involves postponing or losing a deal).
47. Prioritize taking perfect care of your first customers over getting more customers
Immediately after securing their first customers, most companies devote their efforts to gaining more new customers rather than strengthening and deepening the relationship with their existing ones. This is a mistake.
First of all, invest in your first customers, turn them into satisfied, loyal, and recommending customers at all costs. Systematic activity to increase the satisfaction of those first customers will give a strong boost to your sales effort. A growing number of satisfied and recommending customers is the most influential variable for growth.
48. Get a reference customer as soon as possible
Having a “reference customer” is the single marketing step that contributes the most to a quick and successful penetration. Your reference customer is a reputable customer in the market who is willing to recommend you. The more significant your product is to the customer (high cost, mission critical), the greater the importance of having a reference customer.
Whether you’re a young start-up or a long-standing company, you’re not recognized in the target market. The fact that your product is used by a reference customer who recommends you, will allay concerns and provide confidence to future customers. The messages you convey will be more convincing, and your PR activity in the media will be more effective if you have approval from reference customers.
Obtaining a reference customer is your job, not your distributor’s. Of course, the distributor can be used to open doors, obtain information, gain credibility in the eyes of a customer, etc., but it is always a task that you should lead.
49. Identify brakes and accelerating factors along the way
Factors that hinder your progress can be:
+ The customer didn’t really understand the benefits of your solution or why they should buy your solution you over maintaining the status quo
+ Your positioning is not clear
+ The customer doesn’t know how to progress towards a deal.
+ The distributor you choose is not committed or is not professional enough
+ The salesperson prefers to sell the existing solution rather than the new one
And so on…
Remember the price you set, even if it is high, is almost never the deterrent!
Accelerating factors are measures that push the customer to the next stage in the purchase process such as:
+ Convincing data
+ Marketing content at a high professional level
+ An impressive demo
+ Great customer experience
And so on…
The sooner you identify brakes and accelerators and act accordingly, the more effective your penetration will be.
50. The status quo is your toughest competitor
Actually, the status quo is not only your toughest competitor, but it’s also the competitor you know the least about. The default situation for decision makers is to continue with their current routine, and not to choose an unknown Israeli supplier.
A new supplier and product is almost always perceived as more risky than maintaining the existing one. Often, even if they identify a clear superior value in the solution of a new provider, they’ll continue with the existing one.
Treat the status quo as your competitor, study its implications for the customer (pros and cons) in depth, and show them the economic loss involved in maintaining the status quo.
51. Look for ways to increase monetary value from customers
You are already operating in the target market, and you’ve invested a lot in your product development and its introduction to the new market. Most companies are content with this, and don’t invest in finding ways to cross- or up-sell.
Insights on product-market fit
52. Provide a comprehensive product
Customers purchase not only a core product and features, they’re also interested in the broad product, in the overall shell; presale services, support, training, brand, etc. This is the comprehensive product that the customer requires.
Check out the components of the comprehensive product customers are looking for, and find ways to provide all of them to the customer independently, or with partners. If you don’t have this, you do not have product/market fit.
53. Prove you have product/market fit
A quality product is a prerequisite for penetration success. The product must be better than the existing alternatives. Most Israeli exporters start going abroad with a product that has no clear advantage, but is just “nice to have”. That is not enough.
You’ll know if your product has product/market fit if it meets the following conditions:
+ Prior to the sale, customers testify that it fully meets their needs.
+ Customers who bought it use it on a regular basis, are loyal, willing to recommend, and there is growth in sales.
If these conditions are not met, even if you manage to sell here and there, you don’t have product/market fit, and most likely, your penetration attempt won’t be successful. Therefore, it’s important that you make a formal diagnosis of your fit, and make adjustments and improvements to align the product accordingly.
54. Ensure a high-level customer experience
In the B2B world, customer experience requirements are on the rise. Invest a lot in improving the customer experience at all your touch points with customers.
55. Make product adjustments quickly
Sometimes a small adjustment is all you need to get product/market fit. Do not skimp and do not be too lazy to make adjustments. Some level of localization is always required.
Whenever you think there is demand for adjustment, quickly validate, and make the adjustment in the product, service, and in documentation. It is always better to make unnecessary adjustments than to not make required adjustments.
56. Improving your product is an unending process
Successful companies are the ones that constantly strive to improve the product. This approach is more common among start-ups, where in software products it’s easier to make improvements.
After obtaining a few initial transactions, most companies perceive them as an indication that the product is already “ready for sale”, and shift all their focus to the marketing and sales of the product. They stop investing effort in improving the product and adapting it to the market.
It’s a mistake. A company that doesn’t have a reputation or a strong distribution channel (as is the case for most Israeli exporters) cannot afford to be satisfied with an equal or slightly better product than their long-standing competitors. Customers will not leave a known supplier unless the Israeli exporter presents a significantly better solution.
57. It’s not just product/market fit
Market penetration resembles a jigsaw puzzle with many pieces. Completing the puzzle takes time and involves research, trial, and error. When the pieces fit together, the penetration rate is accelerated, and ROI improves.
Here are the four main areas in the puzzle (each of which consists of many parts):
+ Product/market fit: To what extent does your product meet the needs and provide value to the target audience?
+ Product/business model fit: Does your business model match the nature of your product and improve your chances of success?
+ Product/channel fit – Is there a high match between the requirements of the distribution channel and the type and characteristics of your product?
+ Business model /channel fit – Are you using a business model that matches the channel you chose?
Insights on lead generation
58. Identify critical marketing practices and design optimal work processes
Identify your critical marketing practices. If webinars, advertising on LinkedIn and exhibitions are your key lead generation practices, so be an expert in them.
Create an optimal, detailed process in each practice, and execute them accurately and with discipline. Being systematic and having discipline (two qualities that we Israelis are not strong in…) in the medium and long term, almost always beat brilliance and creativity.
59. Gain alignment between marketing and sales
Define the marketing function as the service provider of sales. The main thing that marketing provides for sales is quality leads. To do this well, marketing and sales need to be in agreement on: the desired lead profile, joint goals, communication format, and common management of the database.
In small companies where there is no strong marketing department, you can outsource inbound and outbound activities to expert external parties, and focus on actual sales. In companies that work with distributors who do the sales work, marketing has to provide leads to the distributors.
60. Constantly invest in creating a significant online presence and improving your digital assets
The internet allows small companies to demonstrate professional volume beyond their true size. Invest in your site, in your LinkedIn presence, and in writing and distributing marketing content in professional forums. Professional work here has a huge impact on your ability to get appointments with clients.
61. Make adjustments in your marketing content for each market and customer type (translating the website is not enough)
Customer behavior in the target market is influenced by local and business cultures.
If you’ve translated your site into English, that’s only half the work. A one-size-fits-all approach is ineffective. Translate your marketing content into the language of every destination country your company operates in. But that’s only part of localization.
In order to operate effectively in a target market while realizing your full potential, a comprehensive matching process is required beyond the product, which includes: vocabulary, currency, taxation, reference to time differences, and more. Your site is the face of your company that interested customers will see, so it is imperative to make it fully localized in every sense.
62. The five basic marketing content documents you must have
Every company must have the following five basic marketing content documents:
+ A description of the specific problem you are solving
+ A description of the possible solutions (technologies) to the problem
+ Advantages and disadvantages of competing vendor solutions
+ A well phrased value proposition
+ Proof of your capabilities (e.g. testimonials and case studies).
In addition, even if it’s difficult, prepare a justified and backed up ROI analysis. Some documents will hold greater validity if they are prepared by external parties.
63. The three rules for LinkedIn success
LinkedIn has evolved in recent years from a social network to a highly effective marketing and sales tool.
+ These three basic rules should guide you when approaching prospects through LinkedIn:
+ Make an effort to be unique and prominent in your message through any form of referral to the customer
+ Make your message personal, i.e. based on what somebody wrote about themselves – “I read your last post, it was very interesting, and I agreed / did not agree with…”
+ Prove that you are experts, and relevant to the person you’re reaching out to – show you know how to solve a problem, provide value…and so on.
64. Classic branding is almost meaningless
You are a small company from Israel. Customers expect you to provide a clear promise about the value you’ll provide and dedication to your promise.
They don’t expect classic branding that includes a designed logo and a sophisticated marketing slogan. Therefore, a large investment in that type of branding doesn’t provide a lot of value for small companies.
Your brand is the way you and your employees deal with your customer, and the relationships you build and maintain with your customers.
65. Invest in marketing that does not cost money
Your budget is limited.
Organic search, your posts, guest writers’ posts, word of mouth marketing, etc., can bring in customers. They do cost a bit of money (indirectly) but not a lot. They require creative marketing thinking that allows you to use other people’s resources – marketing content, a customer list, etc..
Insights on affiliates and distributors
66. Constantly look for partners in the target market
Trying to start partnerships with local parties is a great and inexpensive way to test whether you have anything to offer in the target market. In most cases, if you do not find partners this is an indication that you do not have an attractive offer in their eyes.
Quality collaborations, almost always, must be with players active at the heart of the target market. If you cannot find a partner in your specific field, find out the reason behind that.
67. Collaborations are a good way to move faster
There are different levels of collaboration, all of which will accelerate your penetration. Before signing a formal agreement with a partner, try to identify where their real interest lies.
After signing, push them to grow, formulate a joint work plan, and keep an ongoing eye on their activity.
Keep in mind that sometimes a partner may have hidden interests that do not match your own.
68. Prepare well before contacting partners
Reach out to potential partners after you know the target market, and especially who your competitors are for their advantages and disadvantages.
The first way to learn the market is by gathering secondary information. After that, initiate meetings with end-customers before meeting with partners.
You can schedule meetings with customers through direct contact with them, or through the assistance of consultants, commercial attache, the Export Institute, and the Chambers of Commerce.
Having already had customer meetings allows you to prepare for partner meetings, and will position you as serious professionals. Often, customers in the target market can refer you to suitable partners.
Most exporters make the mistake of approaching partners first, before they know enough, and before they’re ready.
69. The dilemma of the individual product from the point of view of the distributor
Companies develop a product and turn to a distributor with the goal of having them represent them. In the beginning, it’s usually a single product. Quality distributors do not see an opportunity in a single product, certainly from an unknown manufacturer. Quite a few exporters fall into this trap.
So what can you do? Look for distributors, and identify with certainty that your product closes a certain space in the product line for them and / or is an important tool for them to penetrate customers they currently have difficulty penetrating.
Try to reach distributors through a customer referral. Take on a significant part of the penetration efforts (financing, generating demand, sales activity), and do not leave all activity to the distributor.
The first days and weeks after signing an agreement with a partner are critical.
Be active, and make every effort to help them succeed fast. This initial period will determine the nature of your relationship. Do not be afraid to make demands on your partner over issues that are critical to you, even if they are a significantly larger organization than you.
This recommendation for onboarding also applies to any new customers you obtained on your own.
71. Establish local presence in the market
Your budget is usually not very high. At the same time, a constant presence in the target market is extremely important. At the beginning of the journey, attendance can be minimal – a local address and telephone number and a professional (part-time) person who is able to carry out activities for you in the target market, such as gathering information and meeting with local parties.
Later on, with resources and financial justification, an active branch can be established.
Insights on business in COVID-19
72. 75% of B2B customers now prefer to communicate and purchase online
COVID-19 has pushed B2B buyers into the digital arena. What started out as a response to the barriers created by COVID-19 has fast become routine. Customers purchase without face-to-face meetings, presentations, or relationship development.
This is true for software and hardware, for simple and complex products, for low, medium, and high transaction volumes, for initial transactions, and for repeat transactions.
A McKinsey survey states that this trend is unequivocal, even if there are some differences between geographic markets, sectors, and types of transactions.
73. The model of working with distributors has changed
Working with distributors was once the first choice for any exporter.
If you chose the right distributors (that in itself is not trivial!), and managed your relationship with them correctly (this isn’t trivial either!), then you’ve reached results with reasonable resources: the distributor purchased from the Israeli exporter, and sold the exporter’s products to customers through their field sales operations.
At best, both the distributor and the exporter profited to their satisfaction.
In reality, in many cases, working with distributors is frustrating. Most companies are not satisfied with the performance of their distributors, and most distributors are not satisfied with their suppliers.
The model of working with distributors began to undergo significant changes in the United States starting about fifteen years ago with the opportunities created by the internet.
Some companies moved fully to direct sales via the internet, others initiated direct sales via the internet while still working with distributors, others generated leads and handed them to their distributors, and others executed simultaneously several models.
74. Accelerate your company’s digital transformation
COVID-19 has accelerated the process of adopting digital practices even in conservative industries. Make an effort to upgrade and adapt your digital assets – website, marketing content, product visualizations, and so on. And implement or improve your Marketing Automation capabilities.
75. Accelerate the adoption of new technologies in the marketing and sales departments
Technology has become a key factor in the success of marketing and sales systems. Invest in the use of technology such as: having a CRM for customer relationship management, Sales Enablement for online activity optimization, a video platform like Zoom, tools for sales management like Gong.io, tools for tracking customers’ digital behavior, microlearning tools for knowledge transfer, product visualization tools, and digital signature tools.
76. Investigate the possibility of setting up an Inside Sales system
Office sales people in Israel together with online activities can partially or fully replace distributors and field sales people. Customers are willing to purchase from them.
Setting up an Inside Sales system requires tailoring to the specific situation of your company. It’s not easy, requires managerial and financial commitment, and takes months to reach effectiveness. However, when it succeeds, you have at your disposal a significant growth engine that can be replicated and increased, and that’s (partly or entirely) replace independent of distributors.
77. Use business model creation to your advantage
Customers were reluctant to purchase a product from an unfamiliar supplier, especially in the first transaction. But COVID-19 derailed the traditional sales model in which a customer met face to face with a salesperson, sometimes several times, received a demo, formed trust, built relationships, and then made a purchase that was not necessarily feasible or preferred. In this model, the supplier took on more risk and minimized the customer risk.
Now, exporters must implement models that do not require the customer to pay a large sum before they make a trial and become convinced that the product does indeed benefit them.
New models have become more common, such as Premium version (software) or free trial (hardware), return options (hardware), rental / licensing (software / hardware), payment only according to meeting the goals (software / hardware), etc.
Michael Gally, [email protected]
Michael Gally is an expert in international marketing and sales, and a lecturer at the School of Management at Tel Aviv University.
The post is taken from his blog published on www.michaelgally.com, which focuses on international marketing topics.
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