Lessons in U.S. Expansion

Lessons in U.S. Expansion

From PROFITGuide.com

How a focused push into the States earned Fusion Learning $900,000 in foreign sales, with a few bumps along the way.

When Tim Magwood and Kevin Higgins set up Fusion Learning Inc. in the early 2000s, they started with a handful of local clients in Toronto. The pair watched their sales training outfit grow rapidly. Soon, the client list included national firms and then the Canadian divisions of multinationals, such as St. Jude Medical, a Minneapolis manufacturer of such medical devices as pacemakers.

St. Jude is a medical technology powerhouse, with 2012 revenue of US$5.5 billion, 16,000 employees worldwide and a presence in more than 100 countries. The giant firm retained Fusion in 2005, and was so pleased with the results, it asked Fusion to deliver its training modules to international sales teams in Japan, Europe and Australia—three markets that account for more than half of St. Jude’s revenues.

Suddenly, upstart Fusion was a global firm. Yet the company’s first sustained foray into the international marketplace turned out to be far more complicated than Magwood and Higgins had expected when they made the deal.

To service St. Jude’s sales training needs, Fusion had to scramble to find contractors and translators for the different geographical markets. But the firm wasn’t able to amortize the additional outlay: the market-specific materials for St. Jude were too specialized to be adapted to other clients.

“In a way, that was great for us because we could say we’ve done work in 10 countries,” observes president Kevin Higgins, noting that the relationship lasted three years. On the other hand, he adds, “the cost for us to do that work was dramatically higher.”

LESSONS LEARNED

The experience, Higgins says, “influenced us to say, ‘we’re not prepared to be global.'” Instead, the company set a clear strategic focus for international growth: establish itself as a player in the North American market, which is estimated to be worth almost $2 billion a year, by focusing on Fortune 500-type clients with Canadian subsidiaries. “Whenever we work in Canada and there’s a U.S. parent, we should be talking to those people.”

To open those doors, Fusion managers working with a multinational client identify the senior-most Canadian executive, and then inquire about a referral to the sales managers at the U.S. head office. But, Higgins says, “we’ve got to complete some great work that they’re thrilled with” before making the request.

Fusion’s focused push into the U.S. market has propelled it onto Selling Power magazine’s top ten list of sales training companies. The $7 million-a-year company, which ranked No. 318 on the 2013 PROFIT 500 ranking of Canada’s Fastest-Growing Companies, generated more than $900,000 in foreign sales in 2012, almost seven times more than five years prior. The foray into the U.S. has been so successful, in fact, that Fusion is in the process of opening a New York office and an American division, its first outside Canada.

“In a way, that was great for us because we could say we’ve done work in 10 countries,” observes president Kevin Higgins, noting that the relationship lasted three years. On the other hand, he adds, “the cost for us to do that work was dramatically higher.”

Originally published by PROFITguide.com. Download the Trade Tipsheet that accompanies this story at http://www.profitguide.com/trade-tipsheets

 

Categories Exporting, U.S.

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