Best Practices for International Expansion

• Pilot domestically to test & tune your GTM before going big internationally
• Relocate a strong existing sales engineer to the new office (this is possibly the most critical role to staff), especially if you sell to SMB/MM.
• ‘Soften the beach’ by raising brand awareness through comprehensive marketing (digital, field) before hiring a large sales team.
• If you sell very large enterprise deals, then you may need to relocate a co-founder or other senior executive. If you do not ordinarily close $1m+ deals, then moving these folks adds limited/no value.
• Hire a player/coach sales manager. Some requirements & expectations:
  • Seek someone who is an evangelist with a ‘brand’ in the region
  • By selling, they will learn from HQ how to position your product and localize as necessary
  • They know ‘how to sell’ in the region
  • They have relationships with key buyers
  • They have relationships with key talent to add to your team
  • They lower risk (to some extent) by proving out the value proposition in the region
  • They should serve as an evangelist
• SMB vs. Enterprise:
  • If you already sell to large, multi-national enterprises, then expand your footprint in new geographics
  • If you do not already sell to large enterprises, then you are more likely to gain traction to SMB. Otherwise, it is very, very hard for a foreign company to succeed, especially if/when there are local incumbents.
• In many instances, partners are the best way to enter a new market. This is especially true in Japan, Latin America, and the Middle East.

Managing International Employees

If you intend to hire international employees but do not yet intend to form a local entity, you will likely need to engage a service provider to serve as your employer of record (EoR), handle payroll & taxes, provision benefits, and share advice. Firm include:

• AtlasHXM
• Deel
• Multiplier
• Papaya Global¹
• Pilot

Selling in APAC

• While you can target large, multi-national companies with your direct (local) sales team, it is best to engage them as well as all other sized organizations via resellers.  
• Events, webinars, etc. are not effective for generating demand in APAC. The best way to sell is to go right the top, hand-in-hand with resellers.  1:1 is best but intimate gatherings of true peer leaders (ex: executive breakfasts) are effective.
• Benefits of partnering with resellers:
  • They have deep relationships with their existing customers. 
  • Many customers will only buy technology through their reseller partners.
  • They speak the local language.
  • They can transact in local currency. 
  • They transact on their paper and are able to absorb local preferences (like liability) better than most ISVs.
• APAC reseller considerations:
  • At the start, you need to bring warm business to them and run the sales cycle.
  • They will invest in sales & implementation capacity only if/when your product is in high demand. However, expect that you will need to manage implementation for several years. 
  • Typical reseller margins are 20% to 30%.   Expect to pay a higher rate on business sourced by the reseller.
  • Few if any resellers span multiple countries, even in SE Asia. Each country usually has 5-6 top resellers.
  • Resellers in APAC generally do not require exclusivity
  • Create partner tiers (ex. Platinum, Gold, Silver) based largely on how much business the partner brings to you. Higher tiers should earn higher margins.  You may also expect that partners in higher tiers invest more in the form of certified reps, solutions architects, and project managers. 
• Cultivate local referenceable customers early and often.
• Each country in APAC is different
  • ANZ
    • Many companies start here since it is a large, tech-friendly market.  They speak English. They respect name brands in the US and Europe.
    • Serve ANZ locally or out of Kaula Lumpur or Singapore. 
    • Transacting in USD may be OK
  • Japan
    • Many companies land here since it is a large tech-friend market.  It is critical to have Japanese-speaking personnel and a Japanese-ready product. 
    • Transact in Yen but USD may be OK
  • China
    • Very difficult to enter.
  • South Korea
  • India
    • Many SMBs but also extremely price sensitive.
  • SE Asia (ranked by GDP) – In SE Asia, you generally need to sell to the founder / majority owner
    • Indonesia
    • Thailand
    • Singapore
      • Transacting in USD may be OK
    • Vietnam
    • Malaysia
    • Philippines
    • (Myanmar; Cambodia; Brunei; Laos)

Selling in LATAM

The default for selling into LATAM is to engage partners – distributors, VARs/SIs, or MSPs. This is especially true for outbound selling and essential for enterprise selling.

Remember to pilot domestically to test & tune your GTM before going big internationally.

If a company has a transactional, inside-sales, inbound-response sales motion, then one may still prefer to scale domestically. Native Spanish speakers (though not necessarily Portuguese speakers) are plentiful in most locales.

Nonetheless, hiring direct sellers in LATAM is an option for transactional, inside-sales, inbound response. I recommend Buenos Aires but the following are options:

Location	# Sellers
Sao Paolo	6.5K+
Miami	3K+
Mexico City	2K+
Buenos Aires	1K+
Santiago	826
Guadalajara (too small)	307
Lima (too small)	221

Selling in the United States (“Coming to America”)

In addition to the Best Practices for International Expansion (above), here are some nuances about selling in the USA:

• You should have a US-based President/GM/MD. Outside of financial services, the President & GM titles are far more common than the MD title. Often this will be a dual responsibility for your US Chief Revenue Officer (CRO).
• Open a centralized HQ rather than operating as a 100% remote business
• If your global HQ is in Europe, you should generally site your HQ on the East Coast of the US. If in APAC, then on the West Coast.
• Inside vs. Field
  • Inside is suitable when ASP is less than about $40K
  • Field is suitable when ASP is over $40K
• Locating HQ with an inside sales dominant GTM:
  • Standard working hours – Starting no earlier than 8am (though 9a is typical) and stopping by 6pm in their local time zone. B2B professionals, outside of customer service, will not accept jobs with shifted hours.
  • To cover all time zones (there is a 3-hr gap between the East- and West-coasts), we recommend setting inside sales offices up in cities in the Central or Mountain time zones. The following are cities with major airports and sizable talent pools:
    • Austin, TX
    • Denver, CO
    • Phoenix, AZ
    • Salt Lake City, UT
• Locating HQ with a field sales dominant GTM:
  • Ideal locations vary by target industry:
    • Energy: Houston, TX
    • Financial Services: NYC (or Boston, MA)
    • Healthcare: NYC
    • Manufacturing/Transportation: Chicago, IL
    • Media: Los Angeles (or NYC)
    • Technology: San Francisco Bay Area (or Seattle, WA)
• In-office vs. Remote: As of late 2024, companies are still struggling to get employees back into the office. The current norm is either fully-remote or return-to-office for 2 to 3 days per week. Be very clear on this before hiring since demanding full-time in-office will lead to high attrition if you set other expectations.
• American states and regions are far more homogenous than countries in Europe. There really are no state-specific or region-specific buying considerations.
• US buyers (B2B or B2C) are very brand conscious and may be somewhat less price conscious. They want to purchase cool stuff not ‘cheap’ stuff. Because of this, they are not necessarily brand loyal. At the same time, they are risk-averse so prefer financially strong vendors and are wary of switching costs which makes it very hard to displace an incumbent.
• Enterprise software buyers are heavily influenced by Gartner Magic Quadrants. Forrester Waves are far, far less important. SMB & MM buyers, who often do not have access to Gartner, rely on G2. Other review sites like Capterra & TrustPilot are far, far less important.
• The US market is incredibly competitive. You need to be prepared for a ‘knife-fight in the gutter’ on every deal.
• US buyers are barraged by sellers and are thus very hard to engage.
  • Email response rates are low, << 1% and dropping rapidly
  • Call connect rates are 5% and dropping at a moderate pace
  • Do not cold text US buyers; this is considered overly aggressive. Even if it is legal, people will be annoyed and either block you or ignore you.
• You must localize your website as well as sales & marketing materials for the US.
  • Language: Words like “behaviour” (British English) must be replaced with “behavior” (American English)
  • Logos: Feature American customers that are most like you target ICP; hence, signing marquee US logos should be at the top of your priority list
• Americans are positive, generally non-confrontational, and have healthy egos. Given this, don’t be lulled into thinking that (a) opportunities are higher probability than they are (b) the person you are engaging with actually has influence or authority.
• Americans are very confident in interviews and tend to exaggerate their impact. Job titles are also inflated. Hence, backchannel reference checks are essential when hiring, esp. when hiring salespeople.
• Purchasing decisions are highly top-down with final approval often coming from the CFO. In the likely event that you never meet the CFO, you need a powerful C-level champion.
• US citizens, sadly, have strong implicit and explicit biases. In late 2024, anti-immigrant sentiment is rising. US buyers are fine with if not positively-disposed toward British accents but often prejudiced against strong accents from other parts of the World. These biases are more pronounced in the central part of the country versus the coasts.
• Americans place a high value on speed and thoroughness or response.
• While haggling is not a part of American retail culture, it is very much a part of B2B purchasing. Be prepared to provide discounts, flexible payment terms, etc.

Selling in DACH (Germany, Austria, & Switzerland)

• Prefer to buy from (local) German speakers (though some say this is becoming less critical than in the past)
• Need examples of / references to similar customers using your solution successfully; far less willing to be an early adopter
• Formality: Limited small talk. Be polite, respectful, and not overly-familiar.
• Punctuality: Start on time / end on time
• Detailed: More focused on technical details vs. marketing language. Facts & figures must be well supported. Be prepared to go deep in every meeting which means having a SME (sales engineer) involved from the start. Also, have plenty of robust collateral.
• Quality-First: Quality and proven results are more important than price
• More focused on security, privacy, & compliance
• Process: Well structured sales process
• Ensure your outreach is GDPR compliant. Respect do-not-call registries. Otherwise, cold calling is fine as long as your solution is relevant except in Austria. Cold-emailing is double opt-in (user signs up for list then clicks link in follow up email to confirm) and you must always provide an option to opt-out.
• Provide local (German speaking) customer service
• Legal negotiation tends to involve more back and forth; thus more expensive
• Collaborative approach: Listen, discuss, and show expertise rather than assertively pitching.

International Prospecting & Privacy²

When planning to sell internationally, consult advisors/lawyers with expertise on local privacy laws. For instance, some countries (ex: Singapore) restrict business dialing unless (a) you operate a local business entity and (b) individual reps are citizens or hold work visas.

Footnotes

(1) Disclosure: Papaya Global is an Insight Partners portfolio company
(2) All information on this site is intended to be educational and should never be taken as legal advice