The US remains the largest developed market in the world and a big influence on other global markets. It remains important for any company with global ambitions. The current economic environment does not do a lot to encourage Australian firms to focus on the US. However, innovative new models and technology have dramatically changed the cost of entering and developing the US market. Australian firms can now do much of the early market development work without having to hire a US-based team.
Hiring US-based “blue chip” sales managers
The old way to enter the US market was to hire local sales managers with companies like IBM on their resume. They would, in turn, build out a sales force. This sometimes worked but most of the time it didn’t. Techniques such as aggressive “push” selling that worked for big established brands typically fail to get results for innovative companies new to the US. Funding even a small US-based sales team for a couple of years can easily run into seven figures.
To be fair, company executives often assume that their products and services are fully developed since they were successful in their home market. However, changes are always required to meet US customer needs. Unfortunately, legitimate customer feedback is often seen as an excuse for a lack of sales results. The fundamental issue is that entering the US needs to be seen as comparable to a startup, meaning that founders need to be closely involved. Hiring rain-makers and expecting them to succeed on their own is unlikely to be successful.
Signing US-based partners
Another popular alternative is signing US-based partners. Unfortunately, most value added resellers (VARs) or other distributors are good at selling mature products in mature categories. They are not very motivated by, or successful at, marketing innovative products and services that require the ability to create or disrupt markets.
The new approach
Over the last ten years, there has been a revolution in the way companies go-to-market in the US. These new strategies and techniques have increased the potential for success and have also dramatically reduced costs.
Search engine optimisation, web-based content (webinars, white papers, etc.) and social media strategies mean that Australian companies can start building a brand well before anyone gets on a plane. Content that demonstrates expertise and innovative thinking is the new currency. Inbound marketing will attract early adopters and innovators who are looking for new ideas.
In parallel to inbound marketing strategies, strategic targeting of prospects based on a defined ideal customer profile provides another way to accelerate reach and growth. Outsourced demand generation or inside sales services mean that Australian companies can get access to the same US-based resources used by top US firms without taking on employees.
US firms are increasingly moving away from high cost outside or field sales (“feet on the street”) and towards telephone-based inside sales resources combined with web-based tools like WebEx. The cost of customer acquisition is now a key metric. A predominately inside sales model can deliver at least twice the reach at half the cost of an outside sales strategy. This virtual approach also allows Australian-based experts to be easily brought in through Webinars and conference calls. Buyers are showing a preference for more flexible web and telephone-based engagement.
Despite these changes, in-person support is needed, but only at the end of the buying process (though early relationship-building visits are very useful). The new process makes it feasible for Australian-based founders and experts to take a lead in the buying process remotely with short in-person visits to the US often built around key trade shows or other events.
Companies should not underestimate the potential impact to be gained from the detailed knowledge and energy that founders typically offer. Many buyers are used to commission-driven sales people, so genuine passion and deep expertise can be quite refreshing. More importantly, Australian management is connected directly with early adopter clients — removing the filter and allowing direct feedback. It is harder to ignore this direct feedback as a sales excuse.
Stop selling. Start helping
The final element that Australian firms should embrace is the move from push-focused sales techniques to seeing the buying process as a change management exercise that needs to be supported.
Typically, the existing solution works. There needs to be a very good reason to make a change. Rather than selling, vendors need to help the buyers through a complex change process. The more innovative the solution, the more complex the change process involved. Relevant content and assistance ranging from business case development to post-implementation management plans become vital. Case studies describing the adoption process for other companies can be helpful in addition to the more standard issue/solution/results type formats.
Successfully developing the US market still requires management time and financial resources. However, adopting the new strategies and technologies described above can lower the barriers to entry for Australian firms.
Delaying the hiring of a US-based team or partner can give you a better chance of success. After two or three years of virtual presence, brand awareness is already established. The firm’s products and services, as well as supporting systems, are already tested and adapted to meet US conditions.
Australian management can more effectively contribute having built a firsthand understanding of the market. Overall, this means less risk, less financial investment, increased flexibility and a greater chance of success.
Phil Rogers is the founding Principal of Endeavour Advisory and has over seventeen years experience in North America, Europe and Australasia. He has an MBA from Boston University.