International Markets You Might Be Overlooking… and Why

If you’re a digital business with success marketing online in English, you’re likely to see international interest in your products or services from your earliest days. After all, English is a global language. Marketing in English, even if you’re just trying to target your home country at first, often creates a ripple effect throughout the world. Initial interest from outside your home country can be very high, even with zero localization.

While this might sound great at first, you can’t always trust that the signals you’re getting from your own data will guide you in the right strategic direction for sustainable international expansion.

International Traffic Data Can Be Misleading

For example, let’s say you’re seeing high traffic to your website from a given country outside of your home market. This could mean a number of things are happening:

  1. Bad traffic. Activity from international bot traffic hasn’t been filtered out of your Google Analytics reporting.
  2. Unmet local needs. The country in question has a large population but limited access to content from their country, so they are arriving at your website without intentionally seeking a website from your country.
  3. Search accidents. People are searching for a term or phrase that is not related to your product, but has another meaning in their country or language, and are coming to your website by accident.
  4. Broad interest. People in that country are searching for content related to your product category, even though your product does not actually support the needs of their country (such as language, currency, payment type).
  5. Global campaign bleed. Marketing efforts that you did not intend for global purposes are reaching people in another country.
  6. Competitor success. Competitors in that country are creating awareness of your general product category, even though they target a different type of customer than you do, at a different price point, and people are finding you when looking for alternatives.
  7. Channel creep. Reselling or referral partners of yours are telling companies outside your home country about you and taking you into new markets without your awareness.

In other words, not all inbound traffic to your website means the same thing. In fact, some of it should be ignored entirely. Before you jump to convert traffic into customers, stop to ask: Can we achieve sustainable local growth in this market, beyond just generating traffic from them? Is our business operationally prepared to truly address customers in these countries and serve their needs in a way that is relevant to their local market?

Examples of Commonly Overlooked Markets

Chances are that your company is best prepared to target the markets where most or all of the target customers already speak your language, or where you have other advantages due to a shared currency, trade agreements, or other such factors related to market complexity. Leaning into “easier” markets, especially during the early days of your international expansion, is critical for ensuring sustained growth.

Some of the countries that US-based digital companies fail to fully target in their earliest days include:

  • Canada. Americans often assume they will “capture” the Canadian market just by virtue of targeting North America generally via the US market. American companies typically underestimate the differences between US and Canadian markets. As a result, companies can only grow to a certain level of market penetration before they realize they’ll need to update their strategy to better target Canada distinctly from the US.
  • Nordic countries (Sweden, Denmark, Finland, Norway). Early success in Nordic markets often pleasantly surprises US-based companies, because they don’t usually think about targeting them differently in the early days of expansion. Yet, these are wealthy economies with a high cost of living, and they are usually early adopters of technology compared to other countries.
  • Benelux countries (Belgium, Netherlands, Luxembourg). Similar to the Nordic markets, these are highly English-proficient markets that tend to be quite tech-savvy and eager to adopt new technologies. Because they are not very large markets, they usually don’t boast many home-grown competitors either, and are accustomed to dealing with US-based tech companies. This makes it that much easier to obtain revenue more quickly in them.

Why do companies routinely forget about these markets? What I’ve been told when I ask business leaders why they didn’t target these countries more aggressively earlier on in their international expansion process, is that these countries just didn’t seem foreign enough (in the case of Canada) or offer enough total addressable market (in the cases of Nordics and Benelux countries) to really move the needle in a big way for international revenue. The international expansion push usually seemed to them like it required something bigger and heavier, even if initial revenue targets for international were actually rather light.

Companies often develop their initial market selection strategies based primarily on market size. The common assumption is that if you target a large market, you’re more likely to hit your goal. Digital companies rarely think about the complexity of the markets in their early days of expansion. Targeting larger (but more difficult) markets isn’t necessarily a bad idea. It’s simply more costly and less efficient than targeting easier ones, sooner — and using that revenue and experience to then move into bigger and more complex ones.

For most companies, it’s better to use a numbers-driven, revenue-based strategy. If your goal is to add, say, $2 million in revenue in the next 12 months, and your resources are limited, where will you expand into to generate that revenue, and how much will you invest? For many US-based companies, in the early days, the answer should be Canada — same language (for the most part), tolerant of the same currency (at least more than some markets are), same time zones, and less complexity than, say, targeting Australia or the United Kingdom.

When to (Intentionally) Look Past Easier Markets

Is there ever a time when it’s wise to look past the “obvious” markets where you can drive revenue more cost-effectively, in favor of markets that are more difficult and will take longer for you to penetrate? Yes, there are several circumstances in which this approach is merited:

  1. You have deep pockets. If you have access to plenty of funding for the foreseeable future, it can sometimes be a good idea to seed some of the “harder” markets, such as a US-based company entering Japan. Venture-funded companies can, and do, often spend more money on expensive international bets, albeit taking on more risk and complexity while doing so. Later on, if your business becomes more financially constrained, it might be harder to make a big splash in a new and expensive market.
  2. You have an early market advantage. If you’re bringing a brand new product category into other markets, or if you’re one of the first, sometimes it’s a good idea to do a land grab in a bigger, more complex market, in spite of the trade-off that you’ll likely need to spend more money and time figuring it out.
  3. Competitors are beating you to the punch. If you can acquire a local competitor before they gain major traction, it’s wise to do so, but very few businesses can afford this in their early expansion days. As such, it’s sometimes a good idea to begin your work in a highly competitive market earlier, as opposed to ceding the entire market to a local or global competitor.
  4. You have a strong channel opportunity. Often, breaking into international markets is easier through a partner. If you see a clear opportunity to move into a tough and expensive market via partners, this is often lower-risk than doing so on your own. In these cases, you might be wise to jump on the opportunity to make a bigger impact in a bigger market, sooner.

When to Leverage High-Potential, Deprioritized Markets

If you’ve historically ignored these “low hanging fruit” markets in favor of larger, more complex ones, here are some signals you might want to revisit them:

  • International needs more love. If you’re having trouble getting executives to pay attention to your international business, sometimes doing a focused “burst” into some of these relatively easy markets can help your company over-perform in a given year or quarter. Consider allocating some of your sales and marketing power to some of these markets to generate more interest in international and how you can support the company’s global growth goals.
  • Other markets start to slow down. If the markets you’ve traditionally focused on start to show some wear and tear, due to local market regulations that impact your business in an outsized way, local competitors, and so on, consider steering some resources toward these untapped markets where you can grow your penetration more quickly.
  • You’re still figuring out product-market fit. This is a variation of the prior scenario. Sometimes, with a digital business model, you’ll hit your international targets thanks to early adopters, but what about when you hit the mainstream in some of the markets where you’ve achieved early success and traction? Often, this is a good time to lean into those “easy” markets, where you can probably charge the same amount, in a currency you already offer, in the same language, and grow more with some targeted marketing.
  • ROI suddenly matters more. It’s possible, especially in high-growth companies, that if you keep hitting your numbers, your investment decisions will not be questioned much initially, so long as you keep contributing to the top line. As attention on financials increases over time, and as your company becomes more mature, you’ll need to be able to model the return on your investment more granularly. This is a good time to learn into the markets that require minimal investment for a high return.

In summary, there are times in which it makes sense to overlook certain international markets, even if they truly offer the greatest return in the shortest timeframe for your business. Sometimes, your time horizon is longer, the window of opportunity is open, or your pockets might be temporarily lined with funding.

Likewise, it’s also possible — and not uncommon with digital companies — that your data can mislead you and cause you to focus on markets that are actually more difficult to penetrate than what your top-of-funnel metrics might indicate. Just make sure that you know that focusing on these markets can sometimes offer you high potential for short-term growth, perhaps at a point in time when you need them most.

Nataly Kelly

Nataly is vice president of 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 57 countries (so far).

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