Initiating Sales in New Markets (PART 2): Socializing Your Market Entry

In Part 1 of this series, we discussed how a good ecosystem map can be a strong tool to determine who is who in a potential new market. But, the utility of such a map depends on a company's ability to engage with the right local players, at the right time, and in an optimal manner. Part 2, therefore, explores the importance of socializing the introduction of a new product in Latin American markets in a manner that creates a foundation for sales.

Cultural Considerations

Before engaging with ecosystem players in new international markets, it is important not to overlook the importance of business culture. In Latin America, perhaps more than most cultures, one needs to be highly attuned to the importance of establishing personal and not only business relationships. Unlike in the US, for instance, where first business impressions are often made based on presentation skills and a command of data, Latin Americans place a premium on getting to know who they will be doing business with, their values, and broader goals. This is not to say that data and facts are not important, but a new market player cannot simply rely on an impressive business plan to generate business – it must also commit to generating trust and good will at a very early stage.

How to establish personal relationships in business can be the subject of several blog posts, but here are some of the pointers we give our clients:

-- Engage a local, well-connected person to introduce you.

There is no way around the fact that building personal relationships takes significant investments of time, which is why getting an introduction from a well-connected and trusted local advisor is invaluable. A well-placed introduction by advisors that can vouch for your company can significantly reduce the time and energy required to generate trust and goodwill.

-- Commit to in-person meetings.

In an environment that places a premium on personal relationships, there is no substitute for direct, personal interactions. Phone calls and emails are fine, but one cannot approximate the value of shaking hands, sharing a meal, and taking the opportunity to visit and demonstrate interest in a new country or city.

-- Be prepared to talk about yourself and not just your business.

Take to heart the old, but still highly-practiced custom that business in Latin America is done over coffee at the end of a meal. Don't rush into a business talk -- there will be plenty of time for that. Focus instead on establishing a rapport, identifying common interests, and why doing business together will be personally and not only financially worthwhile.

Initial Engagements

With these cultural considerations in mind, we advise our clients to embark on a campaign to socialize their planned entry in ways that foster relationship-building. A socialization campaign can take many forms, ranging in cost and levels of formality, but we have found that three socialization strategies stand out in terms of early-stage value for expanding companies:

1. Business meetings with key players of the ecosystem –

A company seeking to break into a new international market is likely to have many questions about how to structure a sales strategy, including product mix, pricing, seasonality, etc. And there is no better audience to field these questions than potential customers and partners. With this in mind, a new entrant should consider setting up meetings where the new entrant gains an introduction to established players and gets feedback relating to the local market.

Some of these meetings can be informal, introductory meetings typically arranged with the assistance of a local contact or advisor with the ability to arrange and facilitate high-level introductions. For companies desiring a more analytical approach, we recommend that they arrange more formal interviews in which carefully chosen interviewees are informed at the outset that a company is analyzing its entry into the market and wishes to develop a well-informed strategy. We have found that, if handled well, these interviews can be a great way to gain introductions and valuable information in a business-like setting. The interviews can also pave the way for follow-on meetings geared to further developing and formalizing business relationships.

Whether a new entrant pursues informal meetings or interviews, it should always seek to meet with the highest ranking managers and executives in an ecosystem company. The higher the level of the contact, the higher the chances that an initial meeting will result in buy-in and support for a more lasting relationship.

2. C-Level Conferences and Other “Splash” Events –

Events where potential customers and partners are invited to hear about a company's upcoming expansion plans can also provide significant socialization benefits. However, we have found that the following event-related strategies can significantly increase the likelihood that these events result in beneficial “splashes” (rather than expensive belly flops) for new entrants.

First, the events must feature the participation of at least one high ranking executive of the new entrant -- preferably the CEO – and target the participation of his or her peers in potential customers and partners. As mentioned above, markets such as Latin America place a large premium on personal contacts. Even if a CEO cannot meet personally with every potential customer in attendance, he or she can generate substantial goodwill simply by showing a willingness to travel to the new market, present the company in person, and show interest in getting to know potential business partners. Often, and of course depending on the local market’s awareness of the new entrant’s brand, a CEO appearance at an event may command a fee that can substantially, if not entirely, defray the cost of the event.

Second, in anticipation of the C-level event, the new entrant should try to generate press – ideally for free -- in business periodicals and journals. There is no shortage of well-respected and circulated business periodicals in Latin America that are typically quite interested in new entrants. We have found that these periodicals are very receptive to writing articles about the new entrant, feature the background of a visiting executive, and even put in a free plug for an upcoming event.

Third, the event hosts should find a way to create a memento of the event that can serve as a starting point to create brand knowledge and loyalty. These mementos can take many forms, but the more personalized they are, the better. Recently, for example, we learned that a CEO of a company seeking entry into a major Latin American market had written a leading book in English on his company’s services model. This seemed like a great opportunity to not only have the CEO visit the new market, but also bring with him signed copies of his book, translated into Spanish, that would be personally handed to event sponsors as well as participants who paid an entry fee. As it turns out, the event was a big success and was paid for by the entry fees alone!

Fourth, in keeping with the importance of establishing in-person contacts, the event should provide a format for follow-on engagements where the new entrant can engage directly with ecosystem players. Again, although a CEO cannot be expected to stay in a new market to meet all would-be business partners, he or she can certainly assign an executive or team to do so and ensure that there is follow up.

Lastly, to help ensure all of the moving pieces are organized well and professionally, the new entrant should obtain the services of an experienced, local event planner. A local event planner will be able to keep to a budget while providing key assistance on activities such as organizing and executing invitations, determining which periodicals might plug the event, finding options for where to hold the event, and helping determine how much should be charged (if anything).

Part 3 of Initiating Sales in New Markets will focus on Product and Sales Team Planning as a way of setting the stage for closing initial sales.

For a PDF version of this post, please click here

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Juan Pablo Navas is a founding partner of Nextant, currently co-leads Nextant’s Consulting practice. He has ample experience leading consulting and development projects in different industries and geographies. During his tenure at Nextant, Juan Pablo has led over 100 projects related to expansion and optimization strategies, organization, sales and marketing models, customer services and business transformation.

Email Juan Pablo at: jpnavas@nextant.com

Andres Snaider is a founding partner of Nextant, a consulting firm specializing in assisting companies expand their businesses in international markets, with a strong focus on Latin America. With a degree in law and experience working as an international attorney and businessman, Andres has advised clients on a range of commercial matters and investments in almost every country in the Americas, including the US, Mexico, Colombia, Brazil, Ecuador, Argentina, Chile, and Canada, just to name a few. He is a graduate of the Harvard Law School and currently lives and works in Boulder, Colorado.

Email Andres at asnaider@nextant.com

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Nextant has extensive experience in assisting leading clients through its Market Expansion and Business Optimization services. For more information on how Nextant can assist your company in socializing a market entry and initiating sales, please visit our website at http://www.nextant.com

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