Expanding sales into international markets is exciting but challenging. Common queries we hear are:
- I am worried about distracting the current sales team and impact on current sales
- I need flexibility in case my current product market fit is not reflected in my new market
- How do I manage cultural differences and get visibility in remote management?
And so our our focus piece this month highlights considerations that may make outsourcing a strategic and valuable initial phase of expansion when going global:
1. Market Expertise and Local Knowledge:
Getting it right in an international market needs a direct understanding of:
- Local culture
- Language
- Business practices
- Customer preferences
Outsourcing sales to a company that provides local teams provides this immediate knowledge. Local sales people understand the market, enabling them to tailor their approach, build trust with prospects and customers, and to communicate your value proposition accordingly.
This local expertise can significantly reduce the learning curve and unlike a single local hire, delivers supported management plus the insights from other customers they have. Add to this the fact they typically measure everything to report back to clients, risk is very much reduced in the selection of the salesperson and the chance of failure.
2. Cost-Effectiveness, Scalability, and Risk Reduction:
Launching in a new country can be expensive. It involves setting up offices/legal entities, hiring and training sales staff, and investing in infrastructure. Outsourcing your sales function can significantly reduce these upfront costs or delay the need until the market is proven or established. It is uniquely different to a reseller/partner model as the team is normally your team, white labelled but just structured on a commercial not employment contract.
You can leverage the team, resources and infrastructure of your outsourced partner, avoiding the need for significant capital investment. Additionally, outsourcing provides flexibility and scalability. You can easily adjust team size based on demand, meaning the right resources at the right time without worrying about local HR laws etc.
Critically, outsourcing also reduces risk. By partnering with established local experts, you minimise the risks associated with navigating unfamiliar legal, regulatory, and business environments. They have established processes, understand local compliance needs, and are on the ground to handle unforeseen challenges, mitigating potential financial and reputational damage.
3. Navigating International HR and Employment Rules:
Each country has its own unique set of employment laws, regulations, and HR practices, often changing regularly. These can be complex and very different, including payroll, benefits, contracts, termination and disciplinary procedures. Outsourcing your sales to a partner avoids the risk of non-compliance and potential legal fall out. Not only does a partner understand the specific requirements for privacy and legal compliance but more importantly hiring, managing, and compensating employees in that region, plus they are taking responsibility for it – the contract with them will be a commercial not employment contract, meaning that you effectively don’t fall foul of local regulations.
Reducing the Risk of International Sales Growth?
Outsourcing sales for international expansion is a strategic decision that can reduce the risk of international sales growth. From market expertise and cost-effectiveness to scalability, risk reduction, and navigating international HR and employment rules, it can help you navigate the complexities of new markets and accelerate growth.