Timing Your Expansion into International Markets

Many digital companies struggle with the question of when to make a big, concerted advance into international markets. How do you know if the time is right?

Ask yourself the following seven questions.

1. Have we committed to any other big corporate goals?

If you have, you need to make sure they won’t be in conflict with your international expansion agenda. Generally, if international expansion won’t land in your top three objectives companywide for annual planning this year, consider taking it off the list. Global growth is a big project, one that actually requires cooperation from various parts of the company, and over a period of many years.

2. Do we have a clear owner (or team) to lead international expansion?

You’ll need to. Without a person who is specifically tapped to champion global expansion, a major push simply won’t be as successful. Ideally, there is a cross-departmental team of people who will be involved. Global growth is most definitely a team sport. If you don’t have a team of people willing to spend time on international growth, you might not be ready for a large, concerted push but rather some small test projects instead.

3. Do we have executive support?

Again, you’ll need it. For a major international expansion effort to succeed, the C-suite needs to be fully aligned and supportive. Your exec team will need to stress the importance of international objectives both internally and externally – during company meetings, board calls, and investor calls. You’ll need to make sure that “international” has a prominent seat at the exec table, or at the very least, the ear of the exec team.

4. Do we have a plan to properly fund and staff it?

Many companies underestimate the costs of going global. Simply translating the content within a product interface does not, in and of itself, constitute a plan for international growth. How will marketing attract sufficient leads to support the salespeople for the region? How many salespeople will need to be hired to make the quotas that lead to the necessary monthly or annual recurring revenue? What will in-language services and support look like? Are systems, legal, and finance geared up to support the new countries and currencies? All of these things take time and money, and many companies don’t plan sufficiently for these costs up front, especially from a headcount perspective.

5. Do we have early indicators of success?

At most digital companies, you’re likely to get a peek at data higher up in your marketing funnel, such as web analytics by geo, that will help you make better global expansion decisions. And because you’re likely to have some recurring revenue already from outside your home market by the time you think seriously about international expansion, you probably already have a smattering of customers outside your own borders as well.

Do you know their churn rate for the countries and regions you’re considering, even if it’s a small cohort of customer data? Do you know their conversion rates at every stage of the funnel? Look at your data to really ask yourself if you have enough credible data to feel confident about moving forward with a larger and more concerted program. If not, you might want to do some small, lower-risk experiments in some of these markets before making a larger push.

6. Do we know how we’ll quantify success?

Creating your metrics before you develop the plan is as fundamental to international expansion planning as test-driven development is to software. Far too many SaaS companies embark on international expansion plans without solid metrics and goals. What is it exactly that you’d like to achieve, and by how much?

You might have numerous goals, such as install base growth, lead flow growth, overall churn reduction (offset by newer install bases in your new focus markets), or perhaps other goals, such as increasing overall market share, beating a competitor to the punch, and so on. Whatever it is you’re trying to achieve with international expansion, make sure that you quantify it and that others are aligned.

7. Do we have product-market fit in at least one market?

This last one is particularly important for B2B SaaS companies, many of which struggle to build a complete product and truly establish product-market fit. Many such companies fail to truly understand the needs of complex, business customers in their home market before undertaking international expansion. This can lead to a very risky scenario.

In general, digital companies should wait until they’re confident in their business model before investing significant time or energy into international growth.

Remember: product-market fit is achieved one market at a time. And one “market” typically means a single country.

If you can answer with a confident “yes” to all seven of these questions, the timing is right to pursue international expansion goals at your company.

Nataly Kelly

Nataly leads international operations and strategy at HubSpot and has previously held diverse roles leading marketing, research, product development, and localization. She writes for Harvard Business Review on topics of international marketing and business. Nataly grew up in rural Illinois, lives in Boston, and has visited 44 countries (so far).

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