A mix of strategies is best
Do you think there’s a potential market for your company’s products or services outside Canada? If the answer is “yes,” then selling internationally could be your path to faster growth, greater profitability and enhanced competitiveness—if you can find the right customers in the right markets.
“When you’re trying to identify customers abroad,” says Allan Place, VP Sales & Marketing at QuickSilk Inc., “what you’re really doing is identifying promising markets. But while you’re looking outward, you also need to be looking inward. That means engaging in a brutally honest analysis of your own business to decide whether the value proposition of your product works outside Canada—it may sell well here, but will it be compelling elsewhere?”
First, take a close look at your product. Does it suit the needs and tastes of the target market? Will the demand be enough to make the market a profitable one? Is that demand likely to grow or shrink? Does your product have a clear completive edge that will allow it to gain and keep market share?
Second, you need to analyze the market itself. Is the economy healthy and growing, or is it showing signs of instability? Are the country’s national and sub-national governments friendly to foreign businesses, or do they sometimes impose barriers on imports? How strong are the market’s legal and governmental institutions? Could political volatility threaten any assets or investments you might place in the country? This analysis should help you decide which market(s) will offer the best opportunities. If the competitive landscape seems as good, then the odds of success are in your favour.
So now that you’ve decided where to go, start considering who to approach and how. Experienced exporters tend to use a selected mix of strategies, from trade events to market visits.
“Trade shows can be the best way to spend your travel budget,” says Place. “Participating in them can help you understand the competitive landscape, since many of the businesses selling against you will be there, and they make it possible to connect with potential end users, partners and distributors. And if it’s a large regional show, then instead traveling to many different countries, the prospects will come to you. This can be a cost-effective way of covering a great deal of ground.”
Another way to connect with prospective customers is to work with your industry association, which can provide you with networking opportunities. Many of these organizations have a global reach since they are frequently connected to equivalent associations abroad. Their market knowledge can be a valuable resource when you’re developing new international business relationships.
Most company managers also agree that third-party recommendations can be helpful when you’re looking for distributors, partners or end users. First, check with your own suppliers to find out if they can recommend reputable distribution firms in your target market.
No substitute for a market visit
There’s no substitute, however, for visiting the market. Combining a visit with a trade show can be especially cost-effective. Before you visit, check EDC’s overseas offices to see if they have representatives in the market. They can help you find your way around, introduce you to decision makers and even match you with local business prospects. You can also contact the local TCS office , for information about market prospects, local companies, contact searches and briefings on current market conditions.
The “follow-your-customer” strategy, for your Canadian customers with overseas affiliates, may also work for you. If you sell your products to a company in Halifax, for example, and that company has an affiliate in Mexico, you may also be able to sell directly to the Mexican affiliate. Finding a ready-made international customer can eliminate much of the risk of entering a new market. Furthermore, your business with the affiliate will help you learn about the local market and give you a presence there, which makes it easier to find other customers.
Another possibility is to partner with a larger Canadian company that already has a foothold. These partnerships can take many forms, from contributing to a supply chain to providing a custom product tailored to the larger partner’s needs.
“Ultimately,” says Allan Place, “people will find reasons to do business with people they like and trust. To keep your customers, you have to mean what you say and do what you promise—never disappoint them. The most important thing is that their engagement with you has to delight them. They need to know that you’ll take care of them, that you understand their problems, and that you’ll help them go from where they are now to where they need to be. If you do that, they’ll be your loyal customers.”