Digital companies have a distinct advantage over other companies: access to lots of data. But no matter how hard you look at the data, you won’t find the best answers to inform your international expansion strategy without adding qualitative local market research. The reason? Quantitative research, without its other half, qualitative research, is like a night without stars. Qualitative research sheds light on, and gives meaning to, the quantitative side of things, to enable you to truly navigate your way into a new market.
Why bother with qualitative local market research? You need to understand who your customer is, separately, in each of your focus countries. You also need to understand what your customer’s motivations are, before you can really start to make clear sense of their behaviors as portrayed via data. While it’s true that quantitative analysis will often lead you to interesting discoveries, qualitative research helps you understand the level of attention you should pay to those discoveries — including knowing when to ignore them entirely.
The Best Research Method? Talk to Prospective Customers
If you’re trying to develop a successful go-to-market plan for entering a new country or expanding your company’s presence there, the good news is that it isn’t actually very complicated. Just talk to the customer. Customers (or potential ones) are often very happy to share their insight with you, if you ask them for it.
The trouble is, many companies don’t bother to even take this critical step, forgetting how necessary it is. Companies that are accustomed to working in large markets, such as the United States, are particularly notorious for doing this. Ever wonder why American companies have a reputation for blundering into other markets without really understanding them? It’s because many actually don’t bother to do up-front research.
Yet, many of these companies see early successes in spite of themselves. It’s surprising how far companies can go without doing proper qualitative research into the local market. This is especially true if they have a great product or are first-to-market with a new technology that early adopters will latch onto all over the world even without true product-market fit.
American companies especially tend to look inward, at their own very small set of data, to try to glean insights and make decisions. Unfortunately, their data on a given country usually isn’t reflective of the market at large, but rather, tells them about patterns of early adopters only. This can lead them to false conclusions about the entire country. It often seems easier to tap into their own (limited) data from a small segment of the local market, when in fact, it’s easier to just ask the local customer what they think.
Avoid assuming you know your customers, or believing they see the world the same way you do, as research from Harvard Business Review recommends. This couldn’t be more relevant when it comes to international expansion and understanding customers in local markets.
Seven Simple Questions for Qualitative Local Market Research
Here are seven basic questions you can use if you’re working at a digital company and trying to come up with a successful local go-to-market entry or intensification plan:
- How would you expect to use this type of product? The answers to this question will tell you what the basic expectations would be for your product in the local market. In other words, this helps you uncover the local use case. You might be surprised by what you learn, especially in emerging markets. For example, some people might say they don’t want the web app entirely, and only want a mobile app for Android. Whatever you do, don’t ask if they use the product in a specific way that is already known to you, as this will bias your research and fail to uncover the local nuances you seek.
- What problem would you want this product to solve for you? This will tell you your product’s primary value proposition in the local market. Prepare for it to be completely different from the value prop in your home market. It’s possible that it’s the same, but you really don’t know until you ask. Quite often, companies are surprised by how different people’s true motivations are. For example, one primary benefit many Americans care about from many different types of product is quickness and convenience. A benefit many Germans care about is accuracy and precision. Even when you’re selling the same product, the benefits that matter to customers in different cultures will likely be influenced by their cultural values.
- If you didn’t have this product, how would you solve this problem? Here, you’ll gain an understanding of what your true competition is. It might not be a company, but rather, an older way of doing something without technology. For example, if you’re selling scheduling software, perhaps a written planner is a competitive product to yours in some markets, even if it isn’t a technology product.
- Where and how would you expect to learn about this type of product? Would they hear about it on the radio? From a friend? On social channels? In a flyer? A billboard on the way to work? From a business association’s newsletter? This will tell you what your most important local marketing channels will be. Again, these might not be what you think, because every market uses channels slightly differently. Make sure to listen to the market feedback on this front, and don’t assume you can use the same pathways you’ve used in your home market.
- What would make you more likely to buy this type of product? This will tell you what other strategies you might need to pursue to influence and persuade someone to make a purchase. The channels people use to learn about new products are not always the same ones they use to reinforce their decisions to purchase a specific product as opposed to changing a behavior or choosing a competing offering. As a common example, a customer might learn of your product in a paid online ad, but they might decide to purchase after checking your ratings out on a review site.
- What other companies do you enjoy working with to solve a similar problem? Here, you can learn which other companies are already doing a good job, have a strong brand, and are achieving success in the local country, so that you can learn from their patterns and do further research about what local strategies they are using in this particular country. Pay close attention to what your customers say about this. These could be co-marketing opportunities, partnership channel relationships, and important clues of ways you can build trust in local markets faster than you ever could by going it alone.
- What other important local trends do you care about? This will give you answers about possible PR and content marketing angles that you can play into. For example, if a particular culture where you wish to gain traction is committed to protecting the environment, and this comes up frequently in your interviews, perhaps you can highlight some of the aspects of your product or company that are environmentally friendly when you are in this market. Or, perhaps you should consider giving a free account to a well-known, local environmental group. This may generate goodwill and perhaps your company can be featured on their donors page or mentioned in a newsletter that reaches all their members to help you gain brand awareness.
Quantitative Research Pairs Nicely with the Qualitative Kind
Looking at data isn’t a waste of time — it can have value. It’s especially helpful to calculate your local and global market share. You should also use well-known, dependable external data sources for international expansion planning. But, the primary value of quantitative research, within international expansion planning, is to help a company narrow the universe of possibilities and develop a set of hypotheses about a market. That said, these theories cannot be looked at in isolation. Local market knowledge is the only way to truly make sense of most data and validate theories in order to make clear and informed decisions.
If you only look at data and fail to talk to customers, you’re likely to overlook a major market opportunity staring you in the face. You might be assuming things are “on track” from the data, when in reality, often a market that is simply “on track” by your standards is actually under-performing compared to the potential it offers. You might just not realize it, because your views are likely to be shaped by your home market.
Yes, there are often better markets for you than your home market, places where you can grow faster than you did in your home market!
Similarly, don’t assume that an entire market is “off track” just because that is what the data seems to say. It’s possible something else is going on. Perhaps one metric is skewing all the others, and there is a very small or time-bound item that is causing the problem, such as a holiday week in that country, a local power outage, or some other explanation. You’ll never figure out what it is without talking to customers, or at least doing more research about their local reality.
Doing local market research isn’t hard to do. But like anything, you have to remember to prioritize it. And let’s face it — for many American companies, non-US customers fall off the radar easily. This is why, so often, executive teams who go out of their way to talk to customers tend to think of customers in their home market first. This sets the tempo for the rest of the company to follow, which is why strong and clear advocacy for bringing foreign (non-US-based) customers into your research process is so important.
Give your local customers a seat at the table. Hear their voices. They’ll give you the advice you need to succeed in the market they know best, so that all you have to do is follow it.