With uncertainty abound in the market, you may be keen to look elsewhere – including abroad.
Even if your intention is global expansion, that doesn’t mean targeting a whole continent like it’s a single country is the right move to make. And it doesn’t mean just casting a huge net over a broad range of prospects, verticals, and new markets.
How to sell abroad
You should approach this tactically with honed and consistent metrics. You don’t have time to waste on poorly qualified leads. You need to measure and repeat so you and your sales team only put effort into promising prospects abroad.
Let’s explore the mathematical process the sales outsourcing team at Sales Force Europe takes both on behalf of our clients and in our own lead generation and international sales strategy.
1. Develop a focused sales approach
Every startup goes through an exploration phase of trying different products or services, pricing, and verticals, and then they focus on one combination that works well for them and scales well within their home market. More than any other time, with limited travel, companies must be very focused in their international sales approach.
Before heading overseas, you must reflect on your current situation.
You must confirm who you are as an organization (and who you are not) and who you are selling to in your home market. Review your client base and do an analysis of your best and most profitable clients. Document these while ignoring the outliers as they will distract your sales, marketing, and development teams from your core value focus.
Who is your ideal customer in terms of vertical?
What about size? Type? While testing your product market fit, you may have sold to different verticals which is healthy. When you scale internationally, focus must be brought down to one or two key verticals, and build your international sales and marketing team around these verticals. Also take now on how could this differ in a new European country.
What roles are you selling to and why are they buying?
You need to develop a buying persona for each stakeholder profile. Then adapt and translate these role titles and use cases to new markets and cultures. Understand that in certain countries, a term like “manager,” or its seemingly direct translations, are reserved only for the top c-suite, while in others, manager could just be a mid-level marketer.
In some countries, people will want to be addressed by a formal title, while in others they prefer an informal approach. Really understand how your target roles within your target vertical in a new culture will expect to be spoken to. And on which medium – video or phone? Perhaps even at a terrace outside for coffee. The most important part of a persona is the person, so make sure to build a realistic picture for each target role.
Who are your favorite customers currently?
Favorite is certainly subjective. For some, trying to keep customer success and support budgets down means they love self-service and auto-renewal. For others, these favorites are enterprise accounts that do take a lot of hand-holding, but also fulfill a quarter of the yearly sales quota. No one knows your bread and butter like you.
Really dive into those favorite sales processes. See what worked. Since these are customers, ask them for candid feedback. And a testimonial or case study that you can translate abroad. Don’t be shy in asking if they can refer you to sister companies or former colleagues in new markets.
2. Map it out to new markets
Then map out your main competition, and where they are selling. LinkedIn usually gives you good info. Sometimes they’ll go ahead and publish all their customers on their website, too. If you are offering a horizontal SaaS product, there’s probably wiggle room.
But if your product is serving telecommunications or banking, you know the key players. Are they already snatched up? Also, don’t be afraid of signing up for a trial or demo of key competitors – with a different email account where possible – to assess how you compare.
3. Get a local opinion
Talk to local experts and get feedback, or invest in some primary market research. Who better than a local selling into your tech niche to give you the nuances into your sales and marketing tactics? To share their stories of what worked and what didn’t for them on the ground. To give you an update on how customers are reacting to the latest local pandemic news.
Decide where you’re headed
Map everything you learned above wherever you’re planning to go. Look for patterns and insights of where would be most logical. London isn’t an automatic win, especially nowadays.
Next, prioritize your launch markets in a phased approach. Remember, you can’t treat Europe as a single market and you probably don’t have the budget to test out the 50 different European markets at once.
If you have multiple products, which are your hottest? Are these the products or services that you should be leading with for your international expansion? It’s better to be narrow-focused than to launch with a broad proposition.
Make sure you’ve laid out your:
- Target countries
- Target verticals
- Target personas
- Product and service portfolio
Then, document how you are selling today. What’s successful and what is not? This can include digital marketing, outbound lead generation, inside sales and field sales.
Now ask what the metrics are of each of these sales services from sales pipeline build through to closure.
You will then want to replicate this successful model above in your target countries and verticals, paying close attention to the metrics as you build and launch your team.
This build can be hiring your own team, or working with a third party. Regardless, document your findings above and build out to the plan. Seems obvious but few teams are mapping out their sales processes and metrics.
Selling to a new country means understanding your existing metrics
Let’s say your home market is the U.S., and you currently have $10 million in annual revenue. You can then factor, on average, the sales and lead generation team is about 30 to 40 percent of the revenue for the SaaS solution.
With this in mind, an enterprise sales executive in Europe costs about £10,000 a month. A full-time lead generation representative supported by a strong back-office including a contact data team, a sales manager helping with call scripts, email templates and LinkedIn templates, and a project manager planning out the sequencing of the multi-channel exercise. This may cost about £7,000 a month. So you know your cost with us will be £17,000 a month plus commission – no recruitment, no legal, no tax, no real estate.
Now, what are your revenue objectives for your first year in Europe? Let’s keep it simple again by setting the target of £1 million. And let’s assume each customer brings an annual recurring revenue (ARR) of £50,000. That means you need a lead generation pipeline worth about £4 million with 300 leads in your new marketing to turn into 80 opportunities to turn into 20 closed deals.
So you need 300 leads to hit your numbers. There are about 260 working days in a year. So ask yourself, how many leads does a full-time SDR deliver in your U.S. home country? Usually, about 10 leads a month. That’s 130 leads a year if you have one lead every other day. You realize from the start you probably need two full-time SDRs to hit that 300-lead pipeline.
The math all comes down to mirroring the success you had at home, all the way down to the granular level of what are the SDRs producing. If an SDR is producing one sales-qualified lead (SQL) every two days, then you need to ask yourself, to get one lead every two days, what are you doing? How many outreaches are you making a day?
Calls, emails, Linkedin – you need about a hundred points of contact a day. How many of these early contacts are producing a marketing-qualified lead (MQL)? It can be even accepting a LinkedIn request – let’s say 10 percent do that, which converts them into MQLs. Then, what is the percentage of those ten percent MQLs that are converting to SQLs? That’s one out of 20.
It’s asking yourself how you can structure a team in Europe to deliver similarly to the teams you have in the U.S. This isn’t that hard and really any CFO can put that in numbers. It’s just something a lot of teams don’t do to make sure they have the budget leeway to head abroad.
At this point, you have to ask is sales an art or is it a science? I always say it’s math. That’s why I start any potential engagement asking: What do the figures look like in your home market? Has somebody done the analysis? And these ratios can vary by different salespeople. You have your target numbers and you can pinpoint what’s falling over with one salesperson versus another.
Once you build a European structure, have clear KPIs or OKRs on all actions. Agree on a reporting structure to manage closely on a weekly and monthly basis.
It does take time to manage a new market expansion, and you won’t be successful working in a vacuum. Your sales team leader must track progress and manage objectives delivery. Equally important, they must take back market feedback to manage and react quickly.
Always remember, just because it works at home, does not mean it will work in other countries.
To paraphrase Finding Nemo, just keep measuring, just keep measuring…