Recently got a query from German start up which I was evaluating. How to break into international market – foray into US/India ?
I think, this is common concern across all SaaS start-ups.
To begin with, it is very important to define your target market in terms of ‘Customer’ as well as ‘Geographic’ perspective.
On one side, you will have target customer in mind – in terms of attributes, buying behaviour, his ‘aha’ moments. On other side, you should be having geographies you are trying to address.
Spreading across national as well as international borders brings its own set of challenges.
Here are some guidelines on that note.
- When you expand to specific geographies (e.g. Europe/US), understand how selling works there. There might be multiple selling models such as –
- Reseller (Commission) model – Reseller works as extension of your marketing team and completes the sale. You will pay commission based on sale. End-user is still buying from vendor.
- Reseller (Affiliate) model – Reseller sells your product to customer and works as affiliate. So, he may even work as after-sales service agent and is generally responsible for end-to-end customer life cycle management.End-user is still buying from vendor. You will pay affiliate commission to reseller.
- Wholesale model – Reseller will buy wholesale licences from you and completes the sale. End-user will buy from resellers. Here reseller has procured licenses at discount from you. He will add mark-up and sell it to end-user.
- White-label model – Its same as wholesale model except reseller/partner will use it as ‘white-label’ product. So, he is free to tag it under his own brand and sell it.
- Understand product fit to newer target market – new geographies bring in new customers ( and related customer requirements). It is important to figure out how much you are ready to accommodate in product scope without affecting overall vision.
- Refine marketing model in terms of partner compensation model/partner contracts as well as marketing materials for new geographies (including revamped web site/ local language requirements)
- Have your on-boarding model ready in terms of sign-ups, regular connects, product informations – technical and sales training, free trials and demos
- Finally, monitor and adjust. Should include quarterly business plans, allocation and usage of marketing development funds as well as special offers/incentives.