For the past two years, I’ve been working in the private sector, helping foreign businesses enter the Netherlands and assisting those seeking to expand into India through commercial agreements. I’m writing to share my insights and experiences from these projects.
The majority of the businesses I’m discussing here offer software products and related services. They’ve already generated initial interest in their target markets and are eager to convert leads or generate more. While they continue support from their home base, they prefer a local partner as their front office. However, many struggle with this strategy, either failing to find the right partner or to establish market momentum. A crucial consideration when venturing into a new market is having “skin in the game.” I’ll elaborate on this and its impact on your global growth plan later in this article.
The Challenge of Global Expansion
Finding potential clients is just one aspect of entering foreign markets. It requires a solid plan, strategic timing, and a deep understanding of the target market’s cultural nuances. Buyer behavior varies significantly by region. For example, a European buyer might approach a purchase differently than a US consumer, and cultural differences between countries like France and the Netherlands can affect business conduct even within Europe.
Additionally, international expansion is costly and time-consuming. Budgeting and preparing for a two-to-three-year timeline are essential. Businesses must approach new markets strategically and with full attention.
The Three Foundations of International Growth
Based on my experience, any effective go-to-market plan for foreign markets must include these three essential elements:
- The Offering: A compelling value proposition for your product or service.
- Marketing: Creating demand and raising awareness.
- Sales: Turning prospects into clients.
1. The offering: Developing a Powerful Value Proposition
If your product doesn’t address a genuine need in your target market, it won’t sell. Starting with a Minimum Viable Product (MVP) and focusing on ruthless exclusion—prioritizing critical features and excluding the rest—are crucial, as Eric Ries emphasizes in “The Lean Startup.” For instance, Slack began as a simple internal team communication platform and evolved into a global enterprise solution by focusing on usability and incorporating user feedback.
2. Marketing: Increasing Demand and Awareness
Marketing bridges product development and sales. Here are some tactics to raise awareness and create demand:
- Invest in a High-Quality Website: Ensure it’s cross-browser compatible, bilingual, and user-friendly.
- Make Use of Marketing Automation Tools: Streamline lead generation with tools like Marketo and HubSpot.
- Attend Industry-Specific Events: Gain exposure and networking opportunities at events like the Amsterdam AI Summit.
For example, Salesforce’s Dreamforce event has become a key part of their marketing strategy, building a user base and generating significant buzz.
3. Sales: Turning Prospects into Clients
Sales are essential for business operations. Key characteristics of a successful sales team include:
- Employ for Consultative and Grit Skills: Seek self-starters who can engage clients with stories.
- Structured Sales Process: Effective teams maintain accountability and follow a set procedure.
- Relationships are important in business-to-business (B2B) sales. Create a trust map with stakeholders.
For instance, Zoom’s consultative sales approach, which helped businesses adapt to remote work, was key to its success during the pandemic.
The Significance of Having a Stake in the Outcome
Let’s revisit the importance of businesses having “skin in the game” in their international growth. This involves sharing the cost of resources provided by external parties, like regional partners or consultants.
Why does this matter?
- Sharing expenses shows market commitment.
- Alignment of Interests: Financial stakes align interests, fostering teamwork and shared objectives.
- Risk Mitigation: Sharing costs reduces your business’s financial burden.
For example, a Dutch business development consultant who consistently finds good leads and closes deals always asks their clients to share the costs of resources. Such an arrangement lowers the client’s financial risk and ensures the consultant’s commitment.
Case Study: Breaking Into the Dutch Market
Let’s examine a case study on entering the Netherlands market. My client, an IT company in Dubai, targets the Netherlands.
Understanding the Dutch Environment
- Tech-Forward: The Dutch are tech-savvy and open to new ideas. They embrace digital solutions and new technology.
- International: English is widely spoken, facilitating communication.
- Direct: Expect candid and straightforward feedback.
- Sustainable: Eco-friendly and ethical solutions are highly valued.
The Three Foundations of Your Success
- The Offering: The product’s value must be clear and easy to understand.
Prioritise speed and continuous development.
Ensure ease of use and address GDPR privacy concerns. - Marketing: A strong, locally relevant website is your first impression.
Attend industry events and use online marketing tools.
Form alliances with local businesses. - Sales: Employ tenacious and methodical salespeople.
Focus on building rapport and understanding client needs.
Please bear in mind that it takes time and money, so scheduling appropriately is crucial. - Using the Dutch Business Language
Be straightforward and punctual.
Respect work-life balance.
Be ready to collaborate and reach agreements
Fast Sales Advice
- Logistics and cybersecurity solutions are in high demand.
- Provide demonstrable ROI: “Our solution cuts costs by X% and improves efficiency by Y%.”
- Emphasise how you meet their needs.
Important Takeaways
- Invest in Sales and Marketing: Don’t underestimate the resources needed for international growth.
- Recognise Cultural Nuances: Research and flexibility are essential due to varying buyer behaviours.
- Have Skin in the Game: To show commitment and align interests, share costs with third parties.
Concluding Remarks
International expansion is a process, not a quick fix. It requires long-term planning, flexibility, and continuous adaptation of your go-to-market approach. Sharing expenses is one aspect of having skin in the game; other aspects include proving dedication, coordinating interests, and reducing risk. By doing this, you position yourself for success in the competitive world of international business.
