Country-Level International Data Analysis and Why It Matters

Whether you’re just getting started with international expansion or you’ve been growing your international customer base for years, here’s one important piece of advice. Whenever possible, analyze data at the country level instead of the regional level. It doesn’t really matter what type of data you’re looking at. Looking at the country level enables you to make the biggest impact on your company’s overall international efforts. If you only look at the regional level, you’re likely to miss key signals from your most important markets that can help you adjust your strategy.

Companies based in large, relatively homogenous economies, such as the United States, often forget that the U.S. is a rather unique market in this respect. They build out their international models based largely on their home market, naturally. But where international growth is concerned, it’s important to remember that the “norm” of the U.S. market is actually the anomaly in most of the rest of the world.

Common Challenges with Geo-Level Analysis

Here are some common pitfalls to avoid when you’re doing data analysis for international purposes:

  1. Referring generally to “Europe.” The economies of Europe are wide and varied. Europe consists of very wealthy developed markets, smaller emerging markets, a BRIC country (Russia), English-speaking markets, non-English speaking markets, multiple currencies, countries that have trade agreements (or not), and a huge array of other diverse aspects and nuance to each country’s culture, local laws, and economy. Lumping companies into European sub-groups is common from a sales territory planning perspective. But for data analysis, it’s far more important to decouple the sales territories from the markets they might include. A sales territory is not a market. A country is a market.
  2. Looking at “Latin America.” One of the only large geographies in the world that is linguistically homogenous is Spanish-speaking Latin America, and these economies — and currencies — are more interconnected that those of other regions. We find Brazil in the midst of it, and while there are some similarities with other Latin countries, Brazil is a completely unique market. The earlier you can break out Brazil from the rest of Latin America in your reporting, the better. But Brazil isn’t the only country to separate out. Pull out your largest markets (countries), even if it’s just Mexico, which is typically the largest market for the rest of Latin America.
  3. Overlooking the diversity of “Asia.” Few major geographies could have more diversity than Asia does. With 2,300 languages, 4.5 billion people, and 48 countries, Asia is highly complex. Europe, by comparison, only has around 200 languages, 741 million people, and 44 countries. (But it’s still highly complex!) Even just the sub-geography of Southeast Asia has countries as diverse as India, Vietnam, Thailand, and Malaysia. Each of these markets has dramatically different religions, languages, and even writing scripts. Asia is complex, and one of the most important regions for which country-specific data analysis is important.

The biggest reason to look at data at the country level? You’ll be able narrow your focus and zoom into just the countries making up the majority of your data at first. This is where your opportunity is to make adjustments to your strategy that will have the biggest impact. Focusing up a level higher than that, ironically, can spread your analysis too thin, causing you to miss important cues from the markets driving most of your revenue.

Country-Level Analysis Simplifies Your Job

Just because you do country-level analysis doesn’t mean you need to act on the data for each country. Simply ignore — or spend minimal time on — the markets that are insignificant in terms of your total customer base. As a rule of thumb, if a country makes up less than 2% of your total international customer base, it probably shouldn’t be one that you spend much time on for international strategy, at least not until it surpasses a certain revenue threshold that you can easily define for your business.

What this means in practice for your international data analysis is pretty simple. For most U.S.-based businesses, even ones with a fair bit of experience going global, the domestic United States is likely to make up 40% or more of revenue globally. For the remaining revenue, it’s usually going to boil down to around 20 countries, with a much longer list of “long tail” countries making up 5% or less. Therefore, you can refine your analysis by looking at your top 20 international markets, as opposed to trying to glean insights from broader, more general regional groupings where the data will almost always be obfuscated. Your top 20 markets give you the most impact! Don’t let their market signals hide on you beneath a regional grouping.

A Simple Example of Why Country-Specific Analysis Matters

In consulting with a well-known SaaS company based in the U.S., their head of marketing asked for help figuring out why the company’s conversion rates for Europe were so different from their numbers in the U.S. They had tried numerous pricing and packaging experiments for Europe to no avail. I asked them to send me the conversion rates by country, which they had never previously pulled — having only looked at the sub-geo level previously.

Sure enough, there was a single country — France — with a much lower conversion rate than all other markets. A review of their sign-up page in French revealed that they had many elements on the page that seemed highly American and unfamiliar to French visitors. As a result, they tried removing some of those elements, improving the localization of the page, and saw their conversion rates gradually improve with each change they made on the page. Many of the lessons learned, they applied to other markets too. But by focusing on that one country and the issues that were impacting it negatively, they raised the conversion rate for the entire European region, since France was a major driver of revenue for that sales territory.

Focus on Top Countries to Lift All Markets

Broader, geo-level analysis has its place, but it’s most useful for sales headcount and territory planning — not for driving the strategy for your overall international business. While it might seem to be the opposite of what you would expect, the sooner you can focus on country-level data analysis, the faster you’ll make the best decisions to drive international forward at your company. Otherwise, these key market signals will remain muted, and perhaps lost in your data. Also, you’re more likely to spend time thinking about insignificant trends without truly understanding which country is driving them. Peel back the curtains as early as you can.

Remember — you don’t have to focus on all markets simultaneously to be successful with your international expansion, even if you’re a born-to-be-global digital company that started to see international interest from your earliest days. Focusing on too many markets at once — or lumping them together too broadly — will actually dilute your focus and spread you too thin. And, it will be exhausting for you and your colleagues if you go too wide, too soon, in your expansion efforts. It’s far more important to focus on your top markets instead. Use the lessons you learn from those top markets to apply them globally, and the smaller markets that you’re not even focused on will benefit and grow with you nicely along the way.

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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