You can hardly get through an hour of TV programming or web surfing without seeing an ad from the government promoting export sales. Positioned as the panacea of economic growth, many Canadian companies have drunk the Kool-Aid and re-positioned their sales teams for international markets. There are some opportunities and pit falls with this overall sales strategy.
Defining your sales channel approach is an important consideration. Here are some of the top things you should put on your checklist when developing an international sales team:
1) Hire a Direct Sales Team
Many organizations quickly recognize that ‘local feet on the street’ is the best entry point to a new market. They are often pulled between moving an existing representative into the market or hiring directly from that market. There are advantages to both approaches in this direct sales strategy.
Hiring in the Target Market
Advantages:
Knows the market, the language, the laws and is potentially a better door crasher
Doesn’t need to relocate and therefore doesn’t require a moving allowance
More likely to stay in the position and in the market given it is their home.
Depending on the market, and the exchange rates there could labor cost savings.
Moving an Existing Rep into the Target Market
Advantages:
They know your product/service and become an instant expert in the trading area.
They have good relationships at the head office and they are good ambassadors having been homegrown in the company.
They know how to sell, and have proven themselves compared to a new hire.
2) Contracting Distributors | Dealers | Agents
This is normally the least cost approach to starting an international sales effort. This is the equivalent of sticking your toes in the water without getting a full bath. There are advantages and disadvantages in using this approach:
Advantages:
Low cost alternative
Least risk alternative
Potential established markets represented
Pay them when they ‘sell something’ approach
Disadvantages:
No direct control over their overall sales effort
Potential competing products with the distributor
Potential service issues when promises are made that can’t be kept by the manufacturer
Quality control of representation is hard to manage
What’s the best sales channel approach? Most successful international sales companies adopt a combination of both sales channel approaches. They normally start out by sending an existing representative into the market to establish distribution partners. Then once the distributors are signed, they proceed to hire a local sales manager in the trading area to manage productivity. Of course, this may change for different markets and/or products, but overall is a proven formula.
Paul Kidston, MBA, CSP | President/CEO | Sales Training Experts
1-877-353-7253 | pkidston@salestrainingexperts.ca