5 ways to expand your business globally

Opinions expressed Entrepreneur collaborators are their own.

The potential for exponential growth associated with global expansion is attractive to Internet companies – especially service-based companies. Gaining first-mover advantage in new markets is often a more cost-effective way to secure market share than penetrating a crowded and highly competitive market.

Global expansion offers diversification and reduces geographic risks by generating revenue from different regions. These economic benefits can make a business – especially a start-up – more secure, with a higher potential for survival.

Based on my experience over the past five years expanding into a number of different global markets, including Japan, Taiwan, Spain, and the Middle East and North Africa (MENA) region, I have come up with these five insights for successfully expanding your online business globally.

Related: The right way to grow your business internationally

1. Avoid one-size-fits-all strategies

When introducing an expansion strategy, consider that the global market is not homogeneous. Although the Internet provides a unique platform for business expansion across geographic boundaries, there is no single approach that companies can take.

Each territory has specific characteristics, from the local economy, market and competitive landscape to unique cultural characteristics, consumption and usage trends, and different manners among local consumers.

Related: One Size Doesn’t Fit All: Customer Focus Is Key

2. Identify market potential in advance

When it comes to market development, it is crucial to understand whether the target market has growth potential. There are two approaches to identifying possible new regions. As a start-up, we tend to focus on the option that requires less resources and time by conducting our own analysis.

This begins with desktop research, and we will commission more extensive qualitative and quantitative analyzes if the initial research identifies growth potential. When we conduct desktop research, we consider five factors to determine a region’s market potential:

  1. Macroeconomic statistics: Factors such as population and demographics.
  2. Financial statistics: In addition to other statistics, we take into account data related to regional GDP, economic potential and average household income.
  3. Infrastructure: As an online service provider, we analyze the regional penetration of internet services to ensure wide coverage and adequate speeds.
  4. Online adoption and use: Potential target markets must already have scalable online payment capabilities and widespread adoption.

Another approach involves paying an agency to conduct the research, but the costs and time to completion are generally prohibitive. Furthermore, these involved research projects may take 2-3 months to complete, and the market may change during that time, which is a strategic risk.

Ultimately, both approaches will give more or less the same answer: either ‘yes’ or ‘no’ because it’s a binary option. We prefer a lower cost and faster path to understand the potential market and its net present value (NPV).

Related: How to Succeed in International Markets

3. Test potential markets for expansion

After identifying a potential new market, it’s time to test it. It usually takes two weeks to generate and convert leads in regions with similar languages ​​and cultures to existing markets.

For example, when we entered Chile, we mirrored our Spanish Latin site from our Spanish home territory, assigned teachers, some budget and some remote staff from the Spanish sales team to test it. This process meant that we got our first customers within two weeks.

In contrast, entering unique regions that are different from any other region takes more time because we have to customize and localize elements like our landing page and basic parent area. In these cases, the startup can take up to two months.

A pilot test is always the first step, regardless of the region, because it allows us to identify strategically significant trends and test specific approaches. At this stage we often fail, but the more we fail, the more we learn and can make the right decisions.

4. Invest in performance marketing tools

In each new region, we assign a dedicated person to manage marketing. In our experience, investing in performance marketing tools is key to market penetration. You’ll quickly determine whether a region offers a viable market by tracking accurate metrics.

However, it is important to understand that important metrics may vary from region to region. Common metrics we track include:

  1. Conversion rate
  2. Cost per client acquisition
  3. Customer retention rates

If data indicates slow adoption or lack of interest, companies can adjust their approach or choose to fail fast by reallocating resources to other identified regions.

Related: How small thank you notes can make a big impact on your business

5. Advance rapidly in new territories

Once we decide we’re ready to invest, we run multiple initiatives simultaneously to get the business off the ground. This includes investing in broader marketing opportunities and the most successful online channels along with influencer marketing, local media PR and affiliate partnerships.

Partnering with a local marketing agency in regions where you have no experience running online ads is often a prudent approach to maximize ROI and hit critical metrics early.

Other necessary steps include setting up infrastructure such as telephony and messaging services for clients to participate in the business. We also implement standard workflows to ensure a minimum standard of customer service.

From a human resources perspective, it is important to build a local team to support the remote team that has completed the pilot testing phase. Key local resources should include salespeople and a customer service manager. While the team may initially remain small, their goal should be to go through the sales funnel, process every lead and booking, and identify the reasons for low conversions or churn.

Customer development also becomes critical to success at this stage. A company needs to talk to customers to monitor satisfaction levels and get feedback that identifies potential technical problems and informs product development and marketing.

In this regard, we conduct a care call procedure to get feedback from users after using our service for a certain period. For example, in Korea we have identified problems with lag times in online classes due to the very fast internet speeds there. With this feedback, we escalated the issue to developers who worked to resolve it to meet user expectations.

This ongoing testing also informs business strategy in the region. For example, despite numerous bookings in India, we could not achieve our conversion goals. The survey identified price as a major barrier – average prices in other regions struck consumers there as expensive.

We determined that success in India would require 2-3 years of continuous investment in marketing and product development to individualize the offering. Although the region offers tremendous growth potential, we ultimately determined that the company could not allocate these resources to the market and abandoned it after six months of testing.

Leave a Reply

Your email address will not be published. Required fields are marked *