BUILDING AND GROWING INTERNATIONAL SALES CHANNELS
Going international can be an exciting and rewarding process for growing technology companies. When it is done properly it will lead to higher profit margins, wider recognition of the company’s technology, and ultimately a higher market value for the enterprise.
There are many methods for creating international sales, and a company has to decide what is best for them and their technology. Options can include: selling direct, engaging marketing partners, using local resellers, finding distribution partners, or establishing a relationship with existing software companies. While some methods tend to be more successful than others – a great deal depends on the type of technology being sold, the nature of the market where it’s going to be sold and, of course, the company itself.
Invariably, however, regardless of the method of entry, companies tend to underestimate the time, cost and/or internal resources needed to successfully implement whatever strategy they have chosen.
The internal preparation needed will depend greatly on the market-entry strategy. As an example, here are the top priority items for developing an international reseller channel.
• Clearly articulate in writing your opportunity from a reseller’s perspective (information about your company, your market profile and product)
• Come to conclusions on strategic considerations
• Initial target markets (what countries, what cities, how many countries, in which order)
• Realistic objectives for those markets (you can’t grant or deny market exclusivity without having this)
• Pricing and payment policies
• Support requirements (technical support, marketing support, training etc.)
• Hiring an international manager (resist the temptation to “over-hire” for this position)
• Technical issues (what needs to be done to the software to make it acceptable to a local market – keeping in mind, translation is not always needed)
• Reseller manual
• Reseller technical and sales training
• Letters of intent and contracts
It is easy to blame the failure of international business ventures on cultural differences. However, we have found that good, sound business practices usually transcend cultural differences. Be a good partner, and your international partners will help you succeed.