Business expansion in the European Market is not a simple task. Depending on where you want to market your business, there are many factors to consider. You need more than being prepared and fully committed. You need a proven and tested method to be successful in Europe.
There are four key factors we have proven that will help you expand successfully in the European market using these 4 Exportia steps to your first million Euros in Sales. They are:
- Export Readiness Diagnostic
- Market Validation
- Lead-Generation Phase
- Scale Your Business
Export Readiness Diagnostic
The first thing you need to do is make sure your company is ready to do business in Europe. It includes having the resources and doing the necessary preparation before you start. We call this the Export Readiness Diagnostic which incorporates four of the Seven Export Pillars we have covered in more depth in previous blogs. These areas are your Dashboard, Product, Team & Customers.
With the Export Readiness Diagnostic, we conduct an assessment, and provide you with a report that includes:
- Using a benchmark, we will share what successful small businesses have done to become multi-million-euro businesses.
- Diagnose your current situation based on our 7 Pillars.
- Provide you with the next step and recommended actions for your business.
You can also create an initial Export Readiness Diagnostic within 20 minutes here: http://diagnostic.exportia.com.au/7pillar/ It will show you a report summarising if your business is ready and includes a personalised to-do list for your next step.
Market Validation
Following our assessment of your business’ readiness for export to Europe, we check if there is potential for your business in the European market. We call this Market Validation. We will help you select the two top European countries you should concentrate your efforts on. European expansion can be challenging for small businesses.
Selecting a suitable European country for your business is critical to your success. Once the two top countries are selected, we prepare a long list of potential channel partners or distributors in each country. Sometimes, we also identify key users in both countries.
In the Market Validation phase, the goal is not to sell. The idea is to gain feedback about the potential of your business in the market. You will lose touch with your European contacts if you sell right away. It is much easier to get their opinions if you ask them, and it is also less threatening. People love to offer their advice as experts. You will get a lot from this phase.
How should you prepare before you begin?
- Prepare your marketing collateral: company profile, product brochures, and case studies
- Identify the ideal sales channels for your business and your European customers.
- Research who your ideal customers are and which European country you want to sell to.
- Test and seek feedback from your customers.
Remember, when you ask for feedback, sell nothing and genuinely ask for their opinions. Here’s an example you can use when asking for feedback:
Dear [XXX],
I am in charge of preparing the entry to the [French/ German/Italian] market for my company XYZ.
The product is/does/provides …
The product value add is …
The product credentials are [award-winning, recognition, important clients] …
We are now gathering feedback about the suitability of the product to the [French/German/Italian] market.
In that context, we would like to have your feedback as a [major/renowned/respected] player in our industry.
I have attached a brochure, case study, and company profile for your perusal.
Would it be okay to schedule a 30-minute call with you to have your feedback?
After you’ve conducted your round of calls and analysed the feedback, decide what your next steps should be. It is usually best to concentrate on the countries that have shown the most interest in your product. Organising face-to-face meetings with potential clients, sales channels, and key opinion leaders would be a great way to start.
Lead-Generation Phase
As soon as your product or solution has been reviewed by distributors in two European markets and has received positive feedback from them, it’s time to generate leads and close your first sale. To achieve this goal, two things need to happen simultaneously:
- Create your leads by using the “push” mechanism.
- While “pull” refers to securing your distribution channels.
Both actions are interrelated. By bringing leads to the table, you will secure and motivate your distributors. The local partner or distributor who will handle transactions on your behalf is your channel to the market; they will turn leads into sales for you. Generating leads so that you can:
- Sign a test, or close your first sale
- Identify your anchor client
- Sign up your first distributor
Push Mechanism
Let’s begin with lead generation or the push mechanism. As a first step, you need to create leads and convert those leads into your first trial, test, or whatever call-to-action you have defined. To attract a prospective client, you must define a low-commitment action. Prospective clients should find it easy to make this decision. For example, you can offer a free trial.
Attending conferences and trade shows is a great way to generate leads. These events allow Exportia to launch a client’s product and create our initial customer list. You will have the opportunity to meet new customers and partners as a newcomer to the European market at major shows held by the Europeans. Using this tool, anyone can get a quick overview of a market.
Ideally, you should exhibit at large international expos, but also at smaller and more targeted conferences. Sometimes, conferences with fewer attendees may be more effective.
Pull Mechanism
As soon as you have generated some leads, find out from your potential customers who they are buying from. Once you trigger the interest of their clients, you will generate the interest of a potential distributor or partner more easily. In my opinion, the best way to target a large potential client is to make it as large as possible.
Your potential distributor certainly prefers large customers. Getting that customer on board is the key to winning that distributor. As a newcomer in the market, this is the most valuable tool you can use. The customer is King. A distributor can help you get your product to an important client.
Scale Your European Presence
After you generate your first sales, you need to scale your business up to the first million euros. Scale is a step where you industrialise your approach to sales and transform them into long-term sales for your business. If you want your business to scale, you will have to find a way to finance further expansion, and you will have to structure your European systems for them to grow with local teams.
Based on our experience with Australian companies in Europe, we’ve observed that it usually occurs in three stages:
- If you want to sell several hundred thousand euros, you must Secure your anchor clients and Convert leads into sales.
- Accelerate your sales from 500,000 to one million euros.
- Once you reach one million euros: LEverage your resources.
Every step requires a specific focus. To be successful, we need to be careful not to go too fast.
And to give you an idea here’s a quick explanation of each stage:
Scale Stage 1: Secure anchor client and convert leads into sales
From initial sales up to 500,000 euros you are strengthening your European foundations and securing your position in the market. When you have completed your Lead-Generation phase, you should be able to explore further expansion. We recommend that you have one or two distributors. The key areas at this stage are:
- Securing Anchor clients is your first priority
- Activate your sales channels
- Be regular at trade shows
- Hiring sales agents
Your distributors should have generated sales. You need to keep doing the same. By In addition, focus on only those distributors you just engaged during the Lead-Generation phase. Do not overspread your resources.
Scale Stage 2: Accelerate your sales
This is the expansion stage from 500,000 to a million euros in sales.You need to target your first one or two distributors in one country which will give you the time and focus to make growth happen. The key areas to this stage of accelerating your sales is:
- Anchor Clients: Reach out to them for friendly introductions. Many, if not all, of your clients, have branches in Europe.
- Sales Channel: Reevaluate your initial channel partner profile and learn from your experience.
- Marketing: Collect case studies from Europe. You can generate leads from additional countries by exhibiting at international trade shows in Europe.
- Dashboards: Monitor your leads and their conversions with dashboards. Convert these leads into sales by working with your distributors.
Additionally, you need to take on more accounts. It may mean expanding into a new industry, launching a new product, or offering a new service.
Stage 3: Leverage your resources
Once you have reached a million euros in sales, it’s time to structure your presence in Europe. As you expand, you want to leverage your European wins and fast-track your sales. The key areas to this stage of leveraging is:
- Hiring your first team members in Europe: Know the type of people you need. Create a pool of candidates and understand your obligations as an employer
- Work with your team to maintain consistency, regular contact, support and accountability with KPIs. Remember it is also important to be culturally sensitive.
- Set up a European subsidiary taking into account where most of your turnover comes from as well as your logistics platform and any potential Government incentives. Staying in the EU is also a major advantage.
- Maintain excellent customer service through local teams and start to increase your marketing. Lobbying influencers is a great way to be seen as a major player
You now have the opportunity to implement our method piece by piece and create your own European empire. As you know, they did not build Rome in a day, so you must keep in mind that this is a long-term undertaking that will require a considerable investment of time, money, and resources from you. The European market has great potential, and if you are well prepared, it can be a safe market for your business.
Want to know more about how to effectively market your business in the European market? Get your FREE copy of “The 4 Steps to Generate Your First Million Euros in Sales” book here: https://www.exportia.com.au/export-business-europe/
You can also create an initial Export Readiness Diagnostic within 20 minutes here: http://diagnostic.exportia.com.au/7pillar/ It will show you a report summarising if your business is ready and includes a personalised to-do list for your next step.
Contact me to schedule a 45-minute debriefing session with me once you have your report.