Business Insights

Business Insights

Expanding beyond the uk? The marketing guide for scale-ups

When you launch, you grow quickly. You’re going to outgrow your initial market, you'll look around for other opportunities to grow, and you’ll find yourself wondering “where do I go next?”

For businesses that start out in the UK, the answer is likely to be “abroad”. British businesses are twice as likely to expand into international markets as similar firms elsewhere. “Similar”, here, means “growing in size or turnover by 20% per year over the last three years, and started out with more than ten people" - that’s the definition of “Scale-up” as the Scaleup Institute sees it. If that's where your business is, this guide is for you.

The UK is a relatively small market, so businesses looking to sustain this kind of growth don’t have much of a choice - if they want to see serious, sustained growth they have to look for it elsewhere.

Taking your business international can feel like a leap into the unknown, across cultural and language barriers. Your time, attention and cash are all in high demand anyway, and expansion plans will stretch them even further. And when things go well, it’s easy to be distracted by success and start chasing an unplanned, unrealistic goal.

To set the right goals and make the right choices, international markets need… marketing.

Finding the opportunity

You’re not looking for a completely new market for a completely new offering. Like any growth strategy, internationalisation can follow the Ansoff matrix of managing one new thing at a time - specifically, by selling what you already sell, to the same sort of people, just… elsewhere.

Market research can guide you to those customers and the markets they exist in, helping you find the right opportunities for your growth plan. The Department for International Trade (DIT) will help you out here: they literally exist to help UK businesses grow internationally. Use their research to find a viable target market, and find out the barriers to growth that market will put in your way.

Each country works differently and presents different challenges - it’s not as if you can expand into a vaguely defined “Europe” and expect the same approach to work everywhere. The key is to think not in countries, but in market segments. If there are similar customers buying similar things for similar prices and similar reasons in Italy, Spain and Switzerland, it makes sense to expand into those markets at the same time.

From there, marketing can help you plan your entry around key areas like price, promotion and place. Best practice here is to make the plan, then experiment on a small scale (dipping a proverbial toe in the water), and continuously refine your approach once you know what you’re doing works.

Routes to market

Routes to market are a key practical consideration. You want to expand into an overseas market, but what will that expansion actually look like? Will you open an office of your own straight away, or will you work through partnerships, agencies or a distributor? Will you offer a limited set of your services and products, or the full suite straight away?

To decide, you need to get to know the market you’re looking to move into. Again, the DIT can help you here - they run networking events designed to introduce buyers and suppliers from the UK and Europe to each other. If you’re aware of how your potential customers in Denmark and Germany like to do business - sticking to their own distributors, for example - then a distribution partner is the right option for that market. The decisions you have to make are matters of scale, logistics, investment and culture, based on what your business can commit and what you expect in return.

The main thing to remember is that “export market” is just a term of convenience. It’s an umbrella term for a whole series of different local markets in countries just as idiosyncratic as the UK. Do the research; pick the targets.

Getting the timing right

Expansion into international markets - or any new market - is all about timing.

You need to start marketing the brand before you launch to the end customers, otherwise no-one will know who you are. Without that brand equity built up, your salespeople will need to be miracle-workers if your brand’s going to get off the ground quickly.

However, you shouldn’t market too early, either. If you start winning customers before operations have been implemented on the ground, you can’t service those clients with the speed and attention they need. Businesses live and die by first impressions, and a poor one can be difficult to shake. Worse: you can end up giving your competition time to match your offering and shut you down before you start. 

Expansion into international markets - or any new market - is all about timing

Best Buy failed to take off in the UK for half a dozen reasons - no grasp of how Brits shopped for electronics, or how often, plus a lack of visibility in a small marketplace with two established retailers - but the nine-month lag between their marketing push and their actual opening can’t have helped. By the time Best Buy’s flagship store was open, PC World had retrained their local staff and could match the Best Buy value proposition head to head. Factor in PC World’s existing brand equity, and this holed the US retailer below the waterline on day one.

Operations and marketing need to grow together, and they need information about the customers and the competition.

Choosing the best tactics

In the early stages, PR and events are effective ways to build awareness before launch without committing too many resources. 

Exactly what you bring to the new market will depend on what your business does, of course. New tech innovation is an exciting prospect and will attract press coverage. Firms in other industries may not be blessed with a headline-grabbing product, so they’ll need to get creative. Thought leadership - working with the target market’s press and partnering with key businesses in the country to produce and distribute reports and insights - can put a new business on the map without racking up huge costs.

Later, you can change gears, focusing on case studies and testimonials from international clients once you’re in situ. This helps you start proving your value to customers in the target market: the sooner your value proposition is out there, the sooner prospects will start to take an interest.

Localised customer support can be a huge boon. 86% of contact centres receive enquiries in languages other than English, and 72% of customers are more likely to buy if they’re supported, helped and informed in their own language. Your salespeople will also struggle with working across a language barrier, and that frustration’s not going to reflect well on your business. If there’s one thing worth localising early on, customer support is it.

Avoiding the pitfalls

Cultural nuances are the biggest pitfall for businesses going abroad. The specific tone of voice and way of selling that works in the UK may not be ideal for the Chinese market. It’s one thing to avoid a branding faux-pas from mistranslation - HSBC telling customers “do nothing” or Ford telling Belgians their cars were corpses - but small details of person-to-person interaction matter too.

Marketing strategy, material and tactics from your home country are not going to work everywhere. Brand adaptation is probably required. Of course, you should remain true to the value proposition that founded and drove the business to the point it is now, or you'll lose what made you successful. The trick is, once again, to do your research and find out how people in your target market like to be told things.

Pricing is something to get right at the beginning: make sure that the added value delivered by your international partners is matched by the price benefit they get. Likewise, look into contract and payment terms of the region you’re expanding into. How will people be paying you for your service; what are their rights and what are your responsibilities?

The best thing to do? Make sure you enter an international market through the eyes of a local. If you don't understand it well, find someone who does and work with them.

Taking a business international - especially for the first time - can be bewildering for a business owner. To wrap your head around the challenge, think of it like recruitment.

You advertise a job, and the CVs come in. You whittle down your options through setting criteria for each stage: long list, short list, interview. How do you know it’s worked? When you hire a person. If you haven’t found someone worth hiring, you go back a step or two and try again. 

If your plan is well researched, well timed, and paced realistically with stages of measured and targeted expansion, you can test it and roll back and adjust in the same way - and you know it’s worked when your growth target is achieved.

Marketing strategy looks at the bigger picture. How does your business work, and how can it work better? To find your opportunities to grow, use the Marketing 360.

See the range of business guides from The Marketing Centre

Topics:
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