Many B2B startups based outside of the U.S. consider the market to be a key component of their overall success strategy – even before they have generated sales within their own market. Considering the frequency of this approach, 151 Advisors works with multiple government agencies to support and advise today’s startups looking to venture into the U.S. market. To do this, we want to bring to light the top questions that these companies must ask themselves prior to investing valuable time, energy and money in landing U.S. accounts.
How did we gain our current clients?
Securing clients for a startup typically involves following a standard sales process since this is the procedure through which a business model is validated. Many organisations leverage established relationships to gain initial clients, which become a great foundation for the beginning stages of their business.
When attempting to enter the U.S. market, the primary issue that most companies run into is that their team will not have the key relationships necessary to leverage and will not know which client is their most reference-able. Changing the target market and prospect could potentially blow up the sales process.
Now, what do you do next?
(A) Hire a new U.S.based sales team? (Don’t forget to pay the recruiting fees!)
(B) Move to San Francisco and start knocking on doors?
(C) Shift your schedule so that you are working on Eastern Time while you are living in London?
Conduct competitive research, differentiate your company against U.S. competitors, develop marketing materials that are market friendly and target prospects that you can land. Larger companies like Tesla will not return your calls, so focus on companies that you can close before you begin trying to reel in the big fish.
How long can we operate in the U.S. without generating revenue?
If your company is only paying sales reps on commission, the answer is two to three weeks. Many companies think that a commission-only structure will work in the U.S., but it won’t. If a company agrees to this, then the result will be no commitment and the initiative will be a waste of time.
Depending on the go-to-market strategy and if the product is B2B or consumer, there could be a huge range in costs beyond actually hiring people – trade shows, advertising, marketing, certifications (FCC, UL, PTCRB, etc.), incorporation/accounting and travel expenses.
To begin determining the optimal path for your startup, identify the capabilities of your team. Outline everything that could be incorporated into a plan for the next 12 months. What are the two extreme options? What is the budget for the U.S. market? Somewhere in between these two questions is the strategy, and it’s necessary to go through the appropriate steps to determine it.
For sales that will not require a face-to-face meeting, an extremely lean sales strategy is available:
1. Develop a digital lead generation (LinkedIn ads, PPC, advertising) program that will drive leads to your site to encourage the downloading of a white paper, the watching of a webinar, or the requesting of a sales call. If your company offers a consumer product, Amazon should become your best friend (Amazon SEO best practices, advertising and FBA).
2. Work varied hours so you can follow up on leads and respond to customer inquiries. Talk with your team about who would be interested in a different schedule. Changing someone’s work schedule can negatively affect their personal life, so there may need to be a compromise to keep the employee positive about the change.
3. Entering the U.S. market can be a risky venture, so continue building your existing customer base in your home market.
Who will support our U.S. sales?
At some point during the sales cycle, the client will ask about hours of support. For a large vendor, 24/7 support is already baked into margins, but for a startup, that is not the case. To support a client in San Francisco, your London-based support team will always work late or respond to requests a day late. A balance between keeping employees sane and customers overjoyed with support needs to be found. Needless to say, this balance is easier written in an op-ed piece than done.
The service level agreement (SLA) will be defined in the engagement agreement, and every client will push you to support them during their hours (you would do the same). Extensive knowledge bases and unassisted training is one tactic that will minimise customer support requests, and can also be effective in the sales process.
Many companies have overwhelmed customers with “self help” support so it is now the norm. Defining the customer service tools and developing the material will be a full-time job. Don’t make this a last minute add-on. Additionally, a bad product overview video is worse than no video at all. The customer support material should be viewed as marketing.
Who is leading our sales initiative?
When you are prepared to hire a U.S. based person or team, the industry-specific experience and network that they bring should be the reason why you hire them. Relationships are essentially time machines and speed up the process of cold calling, navigating a company, finding the decision maker and securing the meetings. If a good candidate says that they have connections into target accounts, go to LinkedIn and validate. Secure references and be positive that this is the team that is going to drive revenue for your startup.
Steve Brumer, Partner, 151 Advisors
Image Credit: SFIO CRACHO / Shutterstock
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