Many US-based scale-ups look at Europe as their first expansion area. Makes sense! The European Union with its 28…soon 27 member states is indeed the largest buyer market in the world for ICT products and services. Yet a question remains: Is hiring a first sales/busdev person in London the right approach to conquer the market?

While it obviously always depend on what you’re trying to achieve and what type of business you’re in, the approach of starting expansion by hiring sales/busdev resources to open a market is almost always doomed to fail. Here’s why.

During my 20+ years of driving business expansion across Europe, I’ve lived through really great and utterly bad experiences. And while the assignments came from various companies, rather differing substantially in offering—license vs SaaS, SMB vs Enterprise vs Government, direct vs indirect sales process—the only constant for the really great and successful experiences depended on the market approach.

The bad. There will be those overseas companies that want to see the additional revenues from an EU expansion, without really making efforts nor investments, to properly assess the market for the long-term. They will hire a first sales guy/girl as an extension of their existing sales department, require that person to follow global sales processes, get support from HQ-based shared marketing and support resources, financed by some marketing left-over budget from a global P&L. They will look at London for a regional foothold as they seemingly experience the UK market as both familiar (culture, language…) and generally large and will ad-hoc do some actions outside the UK, maybe in Germany and/or France…

This set-up has several major drawbacks, all contributing in not meeting expansion objectives:

• the company lacks focus and determination to succeed in the new market. Shared resources operating on both home and expansion markets will do foremost what they’re used to do, and focus where most revenue still comes from (at this stage), the home market.
• the expansion market and its potential customers may react differently on offerings. A product/market fit was (ideally) made for the original home market, yet changing market, some wrongly assume the exercise is still valid.
• customers do not trust foreigners, won’t necessarily buy for the same USPs, and won’t accept 1st line support to come from a distant place from some other time-zone.
• supporting partners are not keen to quickly sign up and help sell a solution that is primarily to the vendor’s benefit, even if that vendor is lucky enough to have no/little competition. In fact, even convincing a potential partner to invest in training its people and provide 1st line support may reveal to be a challenge…
• the UK may not be the best market for a certain product or service. On top, Europe is a union of different countries, with different cultures, different buyer personas, with different local legislation…

If the problem of not selling persist, these companies often start replacing their fine sales people, or add some more… yet always with a ROI that is far worse than in home country.

The good. When a company started its activity (in its home market), it was relying on visionary- and early adopter customers to produce a product/market fit. From there, it defined a go-to-market strategy and build customer operations around an optimal customer journey. In going to a new market, this is the exact same process; be it that it is much easier to adapt from an existing model than to create from scratch.

Companies entering new markets should start with having their global marketing prepare awareness programs targeted to attract first few model customers; only few. Doing this for several new target markets, this will allow—with only little investment—for finding out which markets to hold most potential. The whole customer journey should carefully be monitored, local buyer personas defined with focus on any potential differences. From the local go-to-market strategy, dedicated resources should be allocated to support that journey, from inbound marketing to customer success. Local partnerships may be considered to support the journey, only if required and beneficent for the business; fore-mostly for creating trust with- and providing 1st line support for the local customer.

While this all may sound more complicated than simply extending existing structures and processes, it actually is not. Nor is it much more expensive, taken into account that every euro spent wisely, is [at least] twice better spent than half a euro wasted!