A common phenomenon I encounter in my work meetings with B2B software companies and startups is the frustration of founders, CEOs and sales managers that although they have an excellent product it is very difficult to sell it overseas.
The frustration from this situation is particularly big when it concerns a product that has succeeded in the local market in Israel, so there is no doubt about the usefulness of the solution, its rich functionality and the company’s delivery capabilities. Somehow, when turning to international sales everything becomes more difficult.
First, one should not be surprised that the sales overseas are difficult. This fact is well known and I do not know one company that had no difficulties during the penetration process to international markets.
Known difficulties in international marketing of startups and B2B software companies include:
- Absence of existing customer basis as references in international markets
- Distance from the market and the customers, and the absence of established sales infrastructure in the target country – neither an office nor local sales staff. This situation is completely different from the activity that existed in the Israeli market.
- Great international competitors – you may not have met them yet in Israel, but in the international markets you may meet them and you will have to deal with them and with their broad and rich solutions, their impressive references and with their marketing budgets, which are bigger than yours.
- Local competitors – of which you have not yet heard, since their activity is local at your target country, but they have excellent solutions, adjusted to the customers and the local business environment and standards and they are backed up by a local implementation and support team.
- Need for industry specialization – in technological or complex products and particularly in the B2B field, professional expertise is required exceeding the boundaries of the product and the technology but relating more to professional acquaintance with the industry and best practices.
- Handling and fostering business partners – in cases in which we choose to operate by means of distributors, this distribution channel must be fostered and invested in: training, conference calls, meeting, preparation of marketing materials and sales tools, price lists, quotation templates, agreements and more.
- Globalization versus localization – dealing with the dilemma whether to go out to overseas markets with unified products, price policy and branding and the need to invest and carry out local adjustments to the various markets.
Companies, startups and entrepreneurs less experienced in international marketing, which are trying their luck overseas, operate under the wrong assumption that a good product is enough. They believe that if the product is excellent, and even exceeds that of the competitors, the road to successes is paved.
Among the reasons for the decisive advantage of an excellent product, which I encounter, the following points arise:
- The product is unique – there are no such products on the market
- The product is richer in functionality
- The product is technologically more advanced
- The product has similar functionality but is much cheaper
Accordingly, they believe that it is enough to spread the word about the product to the customers and they will immediately stand in line to purchase it. However, reality shows a completely different customer behavior.
To the best of my understanding, this assumption stems from two interrelated reasons:
- The one is the technical/product background of the entrepreneurs – which is very dominant in B2B software companies. The entrepreneurs’ view is very technical and logical: if the product is better than other products, then the customers will run to buy it, and all that is remains is to be, perhaps, a little more flexible with the price.
- Ignoring the customer’s world, environment and point of view. According to this approach, the customer is focused on examining the company’s solution and the only decisions he may make are:
- He is interested in purchasing the product and desires to make progress in the buying process;
- He is interested in purchasing the product, but he does not have the budget;
- He is not interested in purchasing the product.
This approach ignores all the marketing challenges in general and the international marketing in particular:
- Mostly, your product is not unique and there are others similar to it. The reasons why entrepreneurs do not know this are:
- The focus, which has been so far on the local Israeli market, where not many of the international competitors are active (due to other territories priorities, the market size and language difficulties)
- Failure to conduct a market research. If an orderly process of market research had been conducted, as part of forming the company’s marketing strategy, they would have surely detected the major competitors.
- Even if the product is rather unique in its functionality, there are competitors who solve a similar problem by means of another solution and software.
- In most cases, customers do not purchase the product in order to be advanced. They are looking for a much clearer and more tangible value. For the most part, this value will move around reducing costs, achieving a competitive advantage and reducing risk to the customer.
- Even if the competitors do not solve at all the problem, which your solution solves, or do not create a competitive advantage for the customer, which your solution provides, there are other pains, not less important, that they do solve.
In order to clarify the last point, let us take for example a company, which sells software in the Martech field, and let us assume for the purpose of the example, a tool for building and designing excellent landing pages. When approaching with the solution the CMO or the relevant decision makers at the marketing department in order to suggest the solution, in fact the picture these customers see and experience is similar to this:
This is in fact the market ecosystem of all the solutions, tools, systems and platforms in the marketing area. Countless suppliers, solutions and tools. Each one is good in its field and each contributes a different benefit or solves a different problem the customer may have. Most of them are not direct competitors of our company but almost all of them try to reach those same decision makers, to create an interest and “steal” their time. All of them try to present their products, their benefits, their ROI or the competitive advantage they grant their customers.
In this context, they are definitely competing with our landing page building company. They compete for the time of the decision makers and their attention as well as for the budget – since we do not expect the CMO to purchase hundreds of products.
If so, why should the customer bother to take interest particularly in your products and at the end, also take a risk and purchase them (particularly if the company has no references)?
Does it sound discouraging? Not necessarily. One must simply be familiar with the customer’s world and then he will be more prepared. So how does one get out of this situation? Exactly for this, a marketing strategy is essential.
We will not be able to expand this complex area in this article; however, we can point out in short that a marketing strategy assists in several ways:
- By the mere fact that it is required to rely on a market research and rises the level of our knowledge about the various players and competitors operating in the market.
- It forces us to focus on a certain type of customers, for instance according to vertical, size, standardization related to the industry or other parameters. When selecting the type of customers most suitable for your solution (i.e., those who will derive maximum benefit from it), then it is possible to be more specific in the messages conveyed to the customers. It is possible to better prepare for their world, and demonstrate professionalism in understanding their pains and therefore be more relevant than the other dozens or hundreds of vendors assembling at their door.
- Once we have defined very accurately who our target customers are, then it is possible to define the Unique Selling Proposition (USP) – a definition, which responds exactly to the question why the customer should bother and take the risk to purchase a product from an unknown company – a definition, which connects directly between your product and the needs of your specific target audience.