Lean growth in the international marketplace
Lean is smart. It’s minimal. It’s efficient and less expensive. And it is the way many companies are starting and growing these days. Even if your company is already well-established, the lean approach may be precisely what you need to introduce your product to foreign markets.
Entering a new market requires a very similar process to starting a business from scratch since much of the work you’ve done to learn your own market has no bearing on what you’ll encounter elsewhere. The skills and knowledge you and your employees have gained may not be relevant. It’s a risky proposition, which is why a lean approach, similar to what many startups use, makes sense.
Lean marketing is all about starting small and building slowly. The path forward is through testing and making changes on the results before testing again. Flexibility is required and failures are par for the course, but if you focus on doing a few things very well, you stand a chance of making it. Does this sound dire? Hey, you’ve already beaten the odds once—you have a thriving business!
To help your business thrive in a brand new environment, we’ve mapped out what a lean strategy looks like for growth in international markets.
Step 1: Do your homework
When entering into a foreign market, your key to ultimate success is to do a tremendous amount of research in the beginning. Even if all you want to do is translate your smartphone app, you still have to research your target market and competitors, as well as how marketing strategies work in your chosen region.
For example, a common marketing strategy in the U.S. is to build links by guest posting. However, if you suggest that idea to an Italian blogger, they may be unfamiliar with, or suspicious of, the concept. The golden rule is to never assume, and that goes for your target audience, their preferred keywords, their behavior, interests, preferred content formats and favored media.
Step 2: Launch!
After you’ve researched, tested and iterated, it’s time to bring this project to the next level: launch. This is when you’ll have to invest real money and time into the international portion of your business—and it will take time. Just like founding a startup, you don’t want to invest everything right away; the whole concept of “lean growth” is to risk as little as possible in the beginning, optimize, and grow based on the results.
Step 3: Grow
As you gain traction in your new market, continue testing, iterating and optimizing until you’ve hit on a specific approach that works. Then, invest in doing that approach bigger and better. You may want to hire native team members and open an official office if you don’t already have one. Eventually, you’ll need local staff to communicate with local vendors and suppliers, but start by hiring out more than hiring in to maintain flexibility and reduce risk.
When hiring, keep in mind that the best employees for growing businesses are those who are flexible, adaptable and have experience building revenue from low numbers. Also realize that as your business grows in its new location, it will “go native” as it adapts to the customs and culture.
Another method of growth is to take on a local partner. This is what Walmart did when it first entered Mexico in 1997. Walmart’s CEO, Sam Walton, knew he and his U.S. staff didn’t have the experience necessary to expand into Mexico, so he took on as venture partner Henry Davis, the CEO of Cifra, a native Mexican who studied at Harvard, to bridge the cultural gaps. This partnership allowed Walmart to leap the hurdles of Mexico’s problematic infrastructure, competitive retailers and local laws and regulations that limited expansion of big box stores.
Step 4: Mature
Continue optimizing sales and marketing strategies and double-down on what works. By now, you’re likely an expert on the region and what sales and marketing practices work best. Hire local staff, build your local brand and use local vendors, to become an integral part of your new community.
Going global may be the next logical step for your company, and if it is, it’s a step that will change the way you do business forever. If you’re ready to expand into other markets, check out our free eBook, Going Global, Part II: Lean Globalization, for more tips on how to build a scalable global strategy.