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If you’re like most B2B companies, you’ve factored international expansion into your growth strategy. Your initial business plans may even hinge on tapping into new markets. You’re not alone; in fact, in the State of Global Expansion 2020 report, 90% of businesses surveyed said they have plans to enter into a new market in 2021.
Global expansion to strengthen your reputation and revenue
There are many reasons to take your company global. Besides increasing brand awareness and securing market dominance, you can:
- Increase your reputation as a mature vendor in your niche
- Increase your accessible market and sales revenue
- Create a competitive advantage by providing a product that works across territories and satellite offices
- Drive innovation with new audiences and by hiring new talent
Before starting your expansion, make sure your business is ready. Ask yourself these questions to help you decide whether domestic or international sales is the best way for your company to flourish:
- Does your product offer a solution needed across the globe?
- Are you prepared to hire employees in-region to close sales?
- Will your product need to be tailored for different territories?
Popular international expansion strategies
Unlike restaurants or consumer goods, B2B SaaS companies have some flexibility in how to approach expansion. Here are the most common strategies, as highlighted in this Principles of Management course:
- Indirect sales: Companies that may not have the infrastructure to expand their direct sales teams often utilize channel partners to aid in expansion. A partner program is a cost-effective way to gain global reach.
- Standardization strategy: Since many B2B SaaS products solve universal problems ( for example, CRM, marketing automation, etc), your company can treat the world as one market. There’s less need to tailor how your product functions for local audiences.
- Multi-domestic strategy: While the overall business is still overseen and controlled by the home office, regional managers have the flexibility to customize packaging, sales incentives, marketing campaigns, and pricing models to best serve their customer base.
- Transnational strategy: Companies that use this approach are able to maintain economies of scale by standardizing their products across all markets while still allowing each country to win on pricing against local competitors.
- Licensing: Instead of handling expansion directly, businesses can license their trademarks and patents to a company in a target region who then sells the product. The licensee pays a fee to the licensor in order to use this intellectual property and is responsible for any manufacturing, sales, and marketing efforts. This is a low effort, high return investment strategy.
- Franchising: Similar to licensing, a company in a target region can use the intellectual property of a business to reach an audience. The difference is that the parent company can enforce very strict business rules that must be followed. There is less operational freedom for the franchisee.
- Joint venture: Lastly, your business can collaborate with a company in your target country by joint ownership of a business and it’s operations. Having the reputation and knowledge of a local brand helps reach ideal customers faster. With equal ownership, both companies have to decide which one invests the most resources and how to split the profit.
Determining which markets to expand to first
Before beginning an international expansion strategy, conduct market research for your target countries. Find out if your products are suitable for the local culture, laws, religion, and other values of that country. Consult local experts to understand local laws and customs and answer these two questions: Is there a need for your product? Can you make a profit in this country based on your pricing model?
Finally, prioritize countries that are not already dominated by a popular incumbent provider. Instead, start with regions where there is less direct competition. If a target country is technologically behind your homebase, you can tailor a simpler version of your product to accelerate adoption.
Expansion strategy considerations
Market research will tell you the market size and potential growth opportunities for each new country. It can also highlight risks. For example, some countries don’t have stable local economies and costs can skyrocket unexpectedly. In some places, it may be illegal to sell your product, and if it is legal there can be restrictions on how you sell your product.
In North America, subscription based pricing is typical for B2B SaaS products. But local views on pricing models may differ. First, find out how your local competitors are pricing and selling their products. Maybe your model could be more advantageous to local businesses, but at the same time, they could see long term contracts as too risky.
Don’t forget about currency exchange rates. Western European buyers can probably purchase your product at comparable pricing to US buyers. Elsewhere, like India and much of Asia, will need a much lower price – but they’ll also have a lower operating budget.
International and local regulations
Each country will have unique tax codes, and some may be unrealistic to operate in because of high taxes for your type of goods. Also, banking regulations vary considerably. Find out how easy it is to set up a bank account in your target country. Factors like lengthy approval processes or limitations on how foreign entities can create bank accounts will slow down your plans. In some cases, your only options may be setting up a separate entity in the country or using international banks.
When you’re only selling domestically in the US, you don’t have to worry about the strict GDPR privacy laws of the European Union. But if you interact with any of their citizens, you’ll have to meet the GDPR security requirements or face large fines. Finally, ask what employment laws are enforced before hiring anyone. Some countries have at-will employment rules while others make it harder to fire an employee.
Business and cultural norms
In the US, the average length of a B2B software evaluation is almost two years. In France, the same evaluation can take up to two and a half years. Any number of factors can influence this time frame like the number of stakeholders expected to be involved in the decision-making process or your brand’s reputation in that country.
Cultural factors also regulate the appropriate way to approach potential clients, how to negotiate contracts, and whether your sales team should travel to meet prospects face to face before closing a deal.
Best practices
First, take a holistic approach to your interntional expansion strategy. How will you use revenue gains from one market to finance your expansion into new markets? Or, alternatively, will you re-invest your profit back into the same market’s growth?
Marketing
All of your marketing resources and collateral will need to be revamped for each new target country. What resonates with audiences in the US may not work in the UK or Indonesia. Customize your value proposition, KPIs, marketing campaigns, and pricing for each market.
Bring in local marketing experts that can attract customers and avoid offending buyers. Next, create location-based content including website copy, advertisements, and blog posts. Don’t just translate the same content from your U.S. website into the local language.
Determine which channels are the most effective in the target region. While local social media platforms may be an easy way to reach a new audience, some cultures may lean more towards trade shows, webinars, industry events, and local conferences or summits. Our current need for virtual events makes it easier than ever to reach global audiences that are ideal buyers in each target country.
Rely on local partners
Recruiting a local channel partner network is a great way to understand your new market and stay in compliance. These partners can navigate local language and customs as well as set expectations on how a sales evaluation should be conducted. Many customers will prefer to buy from a local company that they trust, instead of from an international company.
Partners can be onboarded into your partner relationship management tool so they have access to all technical and marketing resources. You can even collaborate on location specific campaigns to better serve your audiences.
Make sure that your partners are putting your interests first. Set up marketing development funds to reward partners who follow up on leads in a timely manner and sell your products by the rule book.
Main takeaway about expanding into international markets
Developing and implementing a global expansion strategy is one way to set up long term success for B2B companies. Through reaching new audiences, as well as hiring new talent, companies have everything they need to innovate and grow like never before.
partner management. She has been actively involved in the industry since 2018.
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Ali Spiric
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A Boost to Channel Programs: Allbound’s $43 Million Growth Equity Investment from Invictus Growth Partners
When building technology stacks, Sales and Marketing actively avoid tools with capabilities that heavily overlap in order to limit spending. This leads to a very common question: can I use my existing CRM platform to manage channel partners?
The short answer? It’s not recommended to rely upon your CRM for partner relationship management (PRM). This is because it’s not equipped with specialized features that speak directly to channel partners’ needs, such as content co-branding, onboarding, and automated content curation based on group types. The lack of comprehensive yet targeted PRM functionality will force you to rely upon multiple tools in addition to your CRM, complicating processes and erecting barriers to scalable operations.
Contrastingly, a PRM is a centralized hub intended solely to help companies enable partners through a variety of features and automations triggered by user actions and customizable settings. What’s more, PRMs are increasingly essential to staying ahead of the curve, as Forrester predicts the PRM market will grow to $679M by 2023 across all industries.
Still on the fence? Consider that PRM technology is relatively new and specifically designed to address CRMs’ insufficient abilities to service partners.
In this article, we’ll help you understand key differences between CRMs vs. PRMs and how to best integrate the two platforms.
What is PRM?
Partner relationship management software provides businesses with tools to track reseller and referral sales while also giving partners support, resources, and a portal to communicate with your business. The power of PRM comes from a personalized portal for partners where they can access documents, marketing content, market development funds (MDF), opportunities, and track deals.
PRM is considered the 3rd evolution of SaaS tools, the first being CRM and then marketing automation. When the market started changing, PRM stepped up to fill in the gaps.
What do PRMs offer in comparison to CRMs?
PRM software provides businesses with tools to track reseller and referral sales while also giving partners support, resources, and a portal in which to communicate with your business. When comparing it against CRM, PRM technology’s power can best be summarized by three points:
- It centralizes most functions and content within a partner-friendly interface - Content is housed in a library with a search bar. Features like market development funds (MDF) requests, deal registration, and prospect pages are all within a single platform. This allows both partners and your management team to be more organized, as well as to identify relationships between different portal activities and subsequent conversions.
- It grants partners controlled freedom - Partners can engage with training and quizzes when most convenient, co-brand select materials as needed, and find quick solutions using the portal’s search function. This results in partners having the autonomy necessary to be productive and achieve success on a mass scale.
- It utilizes automation to improve the partner experience - The portal micromanages partners on your behalf based on commands you set up prior to deployment. This means that you can gate some features and content from defined partner groups and map out content recommendations based on users’ past responses.
Another advantage of utilizing a specialized PRM is that it shows your partners that you invest in their success. You’re willing to spend to accommodate their needs rather than asking them to fit their square bodies into your CRM’s round hole.
Case in point, Serko, a technology solutions provider in the travel and expenses industry, uses Allbound to support their partners who manage over 6,000 customers globally. Channel sales managers at Serko were able to showcase a world-class partner program and portal in which each partner was provided with the right sales and marketing content for their needs. Serko now has 100% partner adoption, which you can read about here.
It’s not “PRM vs. CRM”, as you will need both
Your company’s CRM is not intended for managing your partner ecosystem. However, there are CRM capabilities that are indispensable to Sales and Customer Service that a PRM simply cannot provide.
The Value Your CRM Brings to Your Partner Program
Remember, CRM is an acronym for customer relationship management, meaning that it helps businesses track prospective and existing customers within a single system of record, regardless of whether they came from Direct or Indirect. Advantages of a CRM (in conjunction with a PRM) include:
- The ability for Customer Service to pull client information to better serve their needs
- Customer base data for easier analysis, enabling companies to create and test retention strategies
- The option to schedule emails to customers through the CRM and collect related open-rate data
- Comprehensive pipeline views and sales forecasting, achieved by pulling data from both your CRM and PRM into a single view
- Customer segmentation for intelligent automation and more in-depth analysis
In short, your CRM is essential to keeping all the won leads your PRM helped generate. Additionally, it grants long-term insights into the quality of partners’ leads. For example, if a particular partner group consistently generates customers with high abandonment rates, this could indicate that they’re pursuing the wrong audiences or are setting false expectations, both which modified training practices can fix.
How and Why to Integrate Your PRM and CRM
Your PRM and CRM should share real-time data with one another through integration. This will grant you:
- The ability to block duplicate deals across both platforms - when Direct Sales and a partner both lay claim to a lead, the results are messy. Avoid channel conflict by enlisting data-sharing between your PRM and CRM so both platforms will immediately notify users that the deal already exists within the sales ecosystem.
- A fuller understanding of your pipeline and sales forecasting - Your PRM and CRM should generate reports that give you an overview of today’s (and future) performance. However, why look at two separate reports when you can dive deeper into one?
- For data comparisons between direct and indirect sales performance - By enabling your CRM to pull data directly from your PRM, you can do side-by-side comparisons of how different audiences react to various strategies. This enables you to create better-informed hypotheses and have the sales channels learn from one another.
Allbound’s PRM technology has standard integrations with a number of CRM solutions, such as Salesforce, Pipedrive, SugarCRM, and Hubspot. We also can do custom integrations in order to accommodate new customers’ existing technology stacks. In order to have the process go as smoothly as possible, designated integration specialists will sync up our PRM with your choice of CRM (as well as with other technologies). The end result is seamless interactions between the two software with minimal maintenance required.
What About CRMs That Say They Offer PRM Capabilities?
Because of the rapidly accelerating interest in channel partners, the Sales world is abuzz about PRM technology. It’s only natural that some related software companies would want to capitalize on this interest by laying claim to the PRM title, even if their products don’t quite meet the definitions.
Remember, a true PRM acts as a centralized hub for partner management and sales prospect interactions. Read Automate, Scale, Integrate – PRM System Criteria for a fuller understanding of what features to expect, and remember that a tool that offers only a fraction cannot call itself a real PRM solution.
The Bottom Line About CRM vs. PRM
The market has already started moving to a comprehensive partner management approach. In fact, 65% of high-tech companies have already adopted PRM tools that deliver a significant amount of company revenue. Companies that continue to manage partners in traditional ways via CRM or spreadsheets are not only missing out on new end customer sales, but also valuable insight from the data provided by channel partners. Consider creating a great partner experience to see big returns on your bottom line.
To learn more about choosing a PRM that fulfills your program’s needs, we recommend reading Partner Portal Best Practices and Design Checklist.
How does PRM work within a complex partner ecosystem?
Channel partners are your company’s selling allies, an extension of your sales team. PRM tools give you the functionality to support a variety of partners and their end customers.
PRM tools automatically gather and analyze performance data and metrics, with a clear focus on revenue and activity metrics. Rewarding your most profitable partners with MDFs for hitting revenue targets, or training completions, ensures that you see ROI from your investment.
PRM and tracking revenue
The revenue metrics for partner programs are unique to the indirect sales model, which is why PRM tools have extensive features to track leads and revenue including:
• Partner portal software for easy communication and data exchange
• Access to relevant parts of the customer database
• Dashboards for tracking leads, deal progression, deal registration, and sales KPIs
• Data about which partners perform well and which individuals fail to generate or convert leads
• Integrations with contract, scheduling, expense, and content tools
What are the benefits of PRM?
Overseeing a partner program has traditionally involved complex spreadsheets and manual correspondence for every deal, which required switching between a CRM and other tools to fill in the gaps. This is a huge competitive disadvantage and makes it almost impossible to correlate partner activity and training to closed business. That’s why PRMs provide partner management specific features like:
• Business intelligence, automation, and template-based workflows
• Visibility on the impact of 3rd parties on reaching new buyers
• Partner segmentation for targeted experiences
• Partner channel avoidance through clear registration processes and pipeline integrations
• Planning, recruitment, onboarding, enablement, co-selling and co-marketing, and incentives
• Overview that channel managers can use to track how well training and content is performing in relation to deal registrations
Integrating your partner tool with your CRM
For a complete view of your entire revenue org, both indirect and direct, integrate your PRM with your CRM tool. Look for a PRM vendor that helps you get your integrations in order.
Allbound let’s users bring their existing sales tools with them into the partner management process. You can pass information between your PRM and CRM to create a consolidated pipeline that is your single source of truth and stays relevant with real time updates on deal registrations. Syncing your data also avoids duplicate deal registrations, making partner conflict resolution much simpler.