Online businesses, especially those that are services-based, have the potential to experience exponential growth as a result of global expansion. gaining a first-mover advantage in new markets is often a more cost-effective way to secure market share by navigating a highly competitive and cluttered marketplace.
Global expansion allows for diversification and lowers geographical risks. It generates revenue from different areas. These economic benefits can increase a company’s security and survival potential, especially for a start-up.
Based on my five years of experience in expanding into many different global markets, including Japan, Taiwan, Spain, and the Middle East and North Africa (MENA) region, These five tips will help you grow your online business internationally.
1. Avoid one-size-fits-all strategies
Consider the fact that there is no global market that can be used to develop an expansion strategy. The internet offers a single platform for scaling a company across geographical borders. However, companies cannot use a one-size-fits-all approach.
Each territory is unique, with its own market, economic and competitor landscapes, unique cultural traits, consumption and usage trends, and different mannerisms among local consumers.
2. Identify the market potential before you go
It is crucial to determine if a market has growth potential when it comes to market expansion. Two approaches can be used to identify potential new markets. We, as a start-up, tend to choose the more resource-intensive and time-consuming approach by performing our own analysis.
It all starts with desktop research. If the initial research has identified growth potential, we will order more detailed qualitative and quantitative analyses. When conducting our desktop research, we consider five factors in determining a region’s potential market:
- Macroeconomic statistics: Factors like population size or demographics.
- Financial statistics: We consider data related to regional GDP, economic potential, and average household income among other statistics.
- Infrastructure: We analyze the regional internet service penetration in order to provide broad coverage and appropriate speeds.
- Online adoption & usage: Target markets should already have scalable online payment capabilities and widespread adoption.
Although the second option involves paying an agency for research, it is generally more expensive and takes longer to complete. These involved research projects can take up to 2 months and market conditions could change, which is a risky strategy.
Both approaches will ultimately yield the same answer. Either a ‘yes’ or a ‘no’ because it is a binary option. We prefer the lower cost and quicker route to understanding the potential market and its net present value (NPV).
3. Test potential expansion markets
It’s now time to test identifying a potential new market. It usually takes two weeks to generate leads and convert them in areas with similar languages and cultures as existing markets.
When we arrived in Chile, for example, we copied our Spanish-Latin page from Spain, and allocated teachers, budget, and remote staff to test it. We were able to get our first customers in just two weeks.
Entering unique regions that are not like any other takes longer because we have to tailor and localize elements such as our landing page or basic parenting area. It can take as long as two months to launch in these cases.
No matter where you are located, a pilot test is the first step. It allows us to identify strategic trends and test specific approaches. This phase is often difficult and we make mistakes, but we learn a lot more and can make the right choices.
4. Invest in performance marketing tools
For every new region, we allocate a dedicated person to manage marketing. Our experience shows that investing in performance market tools is crucial to market penetration. By tracking the right metrics, you can quickly determine if the market is viable.
It is important to recognize that important metrics can differ from one region to the next. We track the following common metrics:
- Conversion rate
- Cost per client acquisition
- Customer retention rates
Businesses can adapt if the data suggests slow uptake or a lack of interest in their approach or choose to fail quickly to reallocate resources in other areas.
5. Ramp up quickly in the new territories
We launch multiple initiatives simultaneously once we have decided to invest. This includes investing in wider marketing opportunities and the most successful online channels, influencer Marketing, affiliate partnerships, and public relations in local media.
It is often prudent to partner with local marketing agencies in areas where you don’t have experience in launching internet ads. This will help maximize ROI and get critical metrics early.
The business must also establish infrastructure, such as telephony or messaging services, so customers can interact with it. Standard workflows are also implemented to ensure the highest standard of customer service.
It is crucial to building a local team to help the remote team who implemented the pilot testing phase. Salespeople and a client services manager should be key local resources. Although the initial team may be small, they should have the goal of working through the sales funnel, processing every lead and booking, as well as identifying reasons for poor conversions and customer attrition.
This phase is also crucial for customer development. Customers must be consulted by the business to gauge their satisfaction and to get feedback to help identify technical issues. This will inform product development.
We conduct a call procedure to collect feedback from customers after they have used our service for a certain period. We found issues in Korea regarding lag time for online classes because of the high-speed internet. We received this feedback and escalated the matter to developers who fixed it to meet customer expectations.
The region’s business strategy is also informed by this ongoing testing. We could not convert targets despite having many bookings in India. Research revealed that pricing was the main barrier to conversion. The average price in other regions was too high for Indian consumers.