Top 10 Reasons Why Cracking Into the US Market Is Tough
Insufficient Marketing & Sales BudgetWagner says Europeans particularly are guilty of underfunding sales and marketing budgets. He points to management teams comprised of technologists as one of the reasons. “They still view marketing and sales with suspicion, distrust and as a necessary evil,” he said. Wagner also said underfunded budgets are often a result of Europeans unaccustomed to a marketing team that drives leads.
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Hiring the wrong talentOften, European companies either send someone from HQ to the US or hire a third-rate US-based sales and marketing person without thinking through the strategy. Wagner recommends working through recruiters and securing US investors and advisors that know the lay of the land to help bring on board the right talent.
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Wasting Money instead of OutsourcingEuropean companies need to look at outsourcing, and keep launch budgets focused on the right elements of success. Well-known and highly experienced service providers and partners can bring maximum benefit and value to the company. Hiring a consulting firm to weed through the scores and scores of outsourcing firms and who can identify the top talent will save time and money.
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Using the same marketing strategyWhat worked in Europe, does not work here. Companies need to formulate an entirely different marketing plan for US entry and focus on geographic areas where purchasing and seasoned professionals abound. Asking strategic questions and performing analysis on target users and buyers, channel distribution, marketing communications plans, and geographic distances and differences are all essential for success.
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Continued use of European-originated sales collateral & websiteOne glaring error most companies make is to not adapt marketing collateral and the website to the US market. Wagner says that error occurs in more than 90 per cent of US market entries. Instead, collateral needs to be more benefit driven and include ROI studies. He says, “Just accept this as a fact and budget for some major rewrites.”
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Endless tinkering to make the product “perfect”Over-engineering a product and being late to market is not an option for those companies who want to succeed in the US. Instead, companies should introduce a “good enough to do the job” product if necessary to establish significant lead time. A product’s success is dependent on getting out in front of competitors and building leadership and credibility in their market space.
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Location of the first US officeWagner says office location is critical and advises companies against locating in California unless their business requires it (ex. Movies or semiconductors). Wagner recommends the east coast or some central states to help mitigate the time difference between HQ and the US and find high-quality talent. He points to Boston for high-tech, Washington, DC for telco and green technologies and Texas for energy-related businesses.
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Expecting significant cash flow too soonStart-up operations in the US usually take more time and are more expensive than new market entrants expect. Americans make the same mistake, but European companies coming to the US for the first time face even more potential hazards. The US market is dominated by more complex distribution and larger geographical expanse. Again, Wagner recommends utilizing consulting firms to gain a cost reality check and help with cash flow break even projections.
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Naïve and unsophisticated pricing policiesEuropean companies often think European pricing determines US pricing. That is not the case, says Wagner. Instead, he says, that successful US pricing should be based on what the US buyer will pay, product quality, availability and deliverability.
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Knowing what you don’t knowMost companies entering the Asia market search out advice, but Wagner says that US-entry seems less daunting, but, he asserts it’s essential to get serious advice before US market entry. A poorly executed strategy can lead to crippling a company. Wagner suggests that companies discover what they do not know and formulate a clearly defined strategy.