You’ve made the decision to expand your business overseas, but what next?
The following top tips will help you overcome difficulties in setting up your business in foreign markets.
Review all your international accounts (and your domestic ones) and how you control and administer them. Look at sales trends, sales values and volumes and the margins involved. Is your international price list up-to-date and the discount structure clearly geared to maximise sales and margins in every market?
It is easier and less costly to sell more to existing customers than to find new ones.
Once you have reviewed your key accounts your focus should be placed on supporting and developing them. Examine the geographic and product splits, as there will be some markets and products that are not as profitable as others, and focus on the ones that are most likely to continue to help you build sales and margins.
Can your systems and administration be simplified to be more effective and provide useful management information on a weekly basis? If so you can react quickly to trends and developments in your business sector and this will help you consolidate and focus.
Many companies sell to a specific group of clients within particular business sectors but there are occasions when customers from other sectors may have an interest in your products or services. Do some in-house research to see if there is any demand for your product/service (or a modified version) being sold to customers in related sectors or fields.
In many businesses a wider portfolio of related products can prove more attractive to buyers and retailers who prefer a single group source as it provides efficiencies in buying and managing their supply chains.
Things to consider:
Although it’s important to focus on key customers, it’s easy to overlook the importance of devoting time to networking and finding new customers or new products for existing customers. Attend more industry events and let more people know what you do and what you can do for them. Take the time to look at new markets and customers and carry out research. There may be quick wins in reviewing old client contacts, 60% of buyers report that lack of contact is the primary reason for not reordering.
Visit overseas customers and markets as carefully planned direct contact can give you a critical advantage over competition. Market Visit Support (MVS )finance may be available for certain markets, check this with your local UKTI office.
Devise incentives to stimulate sales of particular items or group items to attract new interest. Particular markets or customers may react differently to promotions, so gear them to the products you know will attract them. Incentives, such as prizes or business visits, can be used to promote sales through Agents/ Distributors.
In some industries offering free or subsidised training for overseas staff can also be of long term benefit.
Tailor your website to attract foreign customers - Have you considered multi-language or foreign URLs? Does your business lend itself to direct selling and handling worldwide Ecommerce?
This is the time to review your market coverage, do essential desk research and consider if current exchange rates will give you a competitive advantage in markets you have considered but not entered before. This will help to spread your company’s financial risk and take advantage of the markets that are still growing. UKTI market research and introduction services can be a cost-effective way of investigating new markets and finding new partners.
The Overseas Market Introduction Service (OMIS) is available to British companies investigating viable markets for their product/service to help them find the most suitable partners to work with locally. Both the UKTI Export Market Research Scheme (EMRS) and Export Communication Review (ECR) services can also be used to help companies decide which markets fall within their business, commercial and communication objectives and which ones they feel comfortable to manage.
You need to know what is happening in your markets from those on the spot. If you have Partners, Agents or Distributors overseas encourage them to have regular monthly contact. Ask for feedback on market/competitor information, sales performance and demand trends. Avoid undue pressure as this may prove counterproductive. Attempt to secure medium-term volume/ sales commitments to new proposals.
Have you/they considered using local exhibitions or seminars to boost promotional activities? The UKTI TradeShow Access Programme (TAP) can be used to help fund your participation in local exhibitions.
Your international pricing strategy has to relate to the costs of servicing international accounts. Freight costs are currently more negotiable and you may obtain better rates by using firms that specialise in certain markets.
Discuss the financial services and products available to help you with your banks and financial advisers from documentary credits, hedging against Forex risks and generally be aware of the cost benefit implications of such support.
Put this insider knowledge into practise and you’ll ensure you always stay one step ahead of the game.