In the last five years, many European companies have watched the US market as an opportunity for sales growth and profitability.
However, according to recent statistics from the National Association of Venture Capital (NVCA), less than 5% of these companies are successful in earning revenue and market share during their first year. Interestingly, an even smaller percentage continues their business in the United States after the year.
Despite this, it is the right time to expand as the US economy is recovering from the great recession, so today there is openness to new ideas and funds available in the US market. To take advantage of these opportunities, we must avoid the five major mistakes of entry into the North American market.
- Underestimate the demands of the US market
From our experience, the time from market entry US income to earning is at least 15 to 18 months. There are techniques that can be used to minimize this.
However, given the US market, any executive team should be prepared for time and financial investments for 18 months before generating a steady stream of revenue.
- Lack of focus on the ideal market segment
USA is a very large country, with many market segments and different demographic areas.
To be successful, it is important for the European company to identify one to three key market segments, whether in relation to industry, geography or another demographic group, as well as the area in which the company’s products and services can contribute value.
Once successful in penetration in an area, the strategy can be replicated in new regional markets of the United States in an efficient and profitable way.
- Not having a compelling value proposition
While there is openness to new ideas as well as the funds available to carry out strategic acquisitions, American entrepreneurs and consumers are not very much in sync with “I want it too” schemes.
These types of offers meet only part of your impulse needs. To win customers, gain profits and gain market traction, your company or product must be a clear, unique and convincing value proposition.
All marketing communications (through marketing promotions, sales activities and all customer interactions) must demonstrate how the product or service will deliver real value in financial, functional and emotional terms to the buyer/customer.
- Disapprove alliances with potential American partners
Although your company may have the resources to generate growth in the European market, US purchasing patterns, legal aspects and ways of doing business are quite different and often much more expensive.
To be able to penetrate fast in the United States market, we recommend that you reflect on the possibility of seeking partnerships or alliances with US service providers, sales channels and niche client groups.
These organizations know the dynamics of the US market understand purchasing criteria and decision-making processes and often have networks to provide faster access to prospects, customers, investors or other partners of value in the market.
- Pursue effectiveness in sales execution
Some companies had sensible business plans, a certain market approach and clear value propositions as well as good partners, but they never got a steady stream of revenue from a diverse customer base. Most of these failures can be attributed to ineffective sales execution.
In relation to sales, questions have to be raised in relation to the choice of the sales channel, the equipment or the sales process.
The sales process is vital to identify the ideal segments of customers, qualify them and develop them, before proceeding to the sales campaign, in a way that allows building a negotiation of reciprocal value that allows growing a long-term relationship.
In relation to the equipment or the channel, it is necessary to analyze how you buy the target customer, if you do it through “sales representatives”, prefer to buy online or through well-known distributors or partners.
As the US economy recovers, European companies have a great opportunity to plan and execute their international expansion in selected segments in the United States market.
Through awareness of these mistakes, developing the right strategy and relationships necessary to overcome these problems, executives and entrepreneurs can take advantage of today’s opportunities to develop a steady stream of income in the United States on a morning around 18 months.
Many companies fail to make these common mistakes when it comes to expanding abroad and can undoubtedly jeopardize the viability of such an operation. That is why any company that decides to expand abroad should consider as capital, hiring experts in competitive business intelligence to advise you on these and other issues.
Comerciando Global with resources in competitive intelligence and a wide myriad in foreign trade services, we can asses your company, its strengths and weaknesses, and advise you in relation to ideal markets and distributions channels, investment, strategy, pricing policies, adaptation, the time it takes to be successful or in how to select the best internal and external team for your international expansion, working with you and your company for as long as it may be necessary, as an additional resource of your company.
We are confident that this report will be of interest for you and your business. If you are determined to expand your business and want to make sure you make the right decisions advised by reputable experts, access the diagnosis on the potential of internationalization of your company, right form our website benefiting from the launching offer.
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