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The potential for exponential growth with global expansion is attractive to online businesses, especially service-based companies. Gaining a first-mover advantage in new markets is often a more cost-effective way to secure market share than entering a cluttered and highly competitive market.
Global expansion brings diversification and reduces geographic risk by generating revenue from different geographies. These economic benefits can make businesses, especially start-ups, safer and more likely to survive.
Based on our experience of expanding into multiple diverse global markets such as Japan, Taiwan, Spain, Middle East and North Africa (MENA) region, etc. over the past 5 years, we have gained 5 insights for expanding your online business globally. rice field.
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1. Avoid one-size-fits-all strategies
As you develop your expansion strategy, consider that the global market is not uniform. The Internet provides a single platform for expanding business across geographic boundaries, but there is no one-size-fits-all approach that businesses can apply.
Every region has certain characteristics, ranging from the local economy, market and competitive landscape, to its unique cultural characteristics, consumption and usage trends, and varying manners of local consumers.
Related: One Size Fits All: Customer Centricity Is Key
2. Identify market potential in advance
When it comes to market development, it’s important to understand if your target market has growth potential. There are two approaches to identifying potential new areas. As a startup, we tend to focus on resource-intensive and time-consuming options by doing our own analysis.
This begins with desk research, and if initial research identifies growth potential, we solicit broader qualitative and quantitative analysis. When conducting desktop research, he considers the following five factors to determine the market potential of a region.
- Macroeconomic statistics: Factors such as population size and demographics.
- Financial statistics: We consider data on the region’s GDP, economic potential, and median household income, among other statistics.
- infrastructure: As an online service provider, we analyze local internet service penetration to ensure wide coverage and adequate speed.
- Online implementation and use: Your potential target market should already have scalable online payment capabilities and widespread adoption.
The second approach requires paying an agency to conduct the research, but the cost and time to complete it is generally prohibitive. Additionally, these related research projects may take two to three months to complete, during which the market may change, which is a strategic risk.
Ultimately both approaches give more or less the same answer. Since it’s a binary option, it’s either ‘yes’ or ‘no’. We prefer low-cost and fast methods to understand potential markets and their Net Present Value (NPV).
Related: How to Succeed in International Markets
3. Test potential expansion markets
Once you’ve identified a potential new market, test it. It typically takes two weeks to generate a lead in a region with similar languages and cultures and convert it to an existing market.
For example, when we went into Chile, we mirrored Spanish Latin pages from our Spanish parent area, allocated teachers, allocated budgets, and tested and tested remote staff from our Spanish sales team. This process allowed us to win our first customer within two weeks.
In contrast, entering a unique region that is different from others takes more time because you have to customize and localize elements such as landing pages and basic parenting areas. In such cases, it may take up to two months to start.
Pilot testing is always the first step, regardless of geography, as it allows you to identify strategically important trends and test specific approaches. At this stage, you will often fail, but the more you fail, the more you will learn and make the right decisions.
4. Invest in performance marketing tools
For each new region, we assign a dedicated person to manage marketing. In our experience, investing in performance marketing tools is key to market penetration. By tracking the right metrics, you can quickly determine if the region offers a viable market.
However, it is important to understand that key metrics may vary by region. Common metrics we track include:
- conversion speed
- Client Acquisition Cost
- customer retention rate
If the data indicates slow uptake or lack of interest, companies can choose to adapt their approach or fail quickly to reallocate resources to other identified regions.
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5. Launch quickly in new territories
When you’re ready to invest, run multiple initiatives simultaneously to get your business off the ground. This includes influencer marketing, local media outreach and affiliate partnerships, as well as investing in broader marketing opportunities and top performing online channels.
In regions that have never launched online advertising, partnering with a local marketing agency is often a smart approach to maximizing ROI and achieving key metrics early on.
Other necessary steps include establishing infrastructure such as telephone and messaging services to enable your customers to engage with your business. We also implement standard workflows to ensure minimum standards of customer service.
From a human resources perspective, it’s important to build a local team to support the remote team that implemented the pilot testing phase. Key local resources should include sales representatives and client service managers. The team can start small, but the goal is to work through the sales funnel, process all leads and bookings, and identify the reasons for low conversion rates and customer attrition.
Customer development is also critical to success at this stage. Companies need to talk to their customers to monitor their satisfaction, identify potential technical issues and get feedback to inform product development and marketing.
At that time, after using the service for a certain period of time, we conduct a care call to ask for your opinion. For example, in South Korea, Internet speeds are so fast that problems were identified with online class latency. This feedback escalated the issue to the developer, who worked on a fix to meet customer expectations.
This ongoing test will also help our business strategy in the region. For example, we had a lot of bookings in India, but didn’t hit our conversion goal. Research has shown that pricing is the main barrier. Average pricing in other areas was expensive for local consumers.
We determined that success in India would require 2-3 years of continued investment in marketing and product development to personalize our products. The region has great growth potential, but we ultimately decided that the business could not allocate these resources to the market and pulled out after six months of testing.