How do global market differences impact revenue growth?By: Alexander Group Sales Growth
The world continues to shrink. Individual nation economies are increasingly connected, forming a single, global economy. The effects of market change in one market are felt almost immediately across other major markets and vice versa. The internet has made it possible to provide uniform product information to anyone, anywhere in the world. How does the globalization of business impact a company’s revenue growth strategy? Logic would indicate sales leaders should aptly leverage trends toward market uniformity to their advantage. Are leading companies doing this, and if so, where and how? Meanwhile, in the midst of increasing globalization, important market differences persist. What are these differences, and how do they impact revenue growth strategy?
Greater interdependence across regions around the world suggests an increase in market uniformity, consistency and similarity. Many companies have achieved global reach for their products and services, providing buyers access to the same or very similar products across markets. Companies should benefit from patterns of uniformity and consistency across markets, which allow for more efficiency in sales models, which leads to higher levels of productivity. If a go-to-market model is successful in one market, it could be leveraged across other markets with equal success. For example, a named account coverage model that works in the U.S. could be applied to Europe and Asia, particularly in target industries. Or a technical product specialist role works equally well in a complex, solution-selling model across markets. Where market uniformity exists, it makes sense to drive and deploy a globally consistent go-to-market strategy.
As much as markets begin to look the same, certain differences don’t seem to change. These market differences require companies to form market-specific strategies and deployment models. What are some of the important differences, and how are leading companies addressing them? Our client experience suggests there are three primary forms of market differences that directly impact revenue growth, as follows:
Economic differences. Perhaps one of the most obvious differences is the state of the local market economy. Markets experiencing higher levels of economic growth, such as China and India, may warrant more aggressive sales coverage and thus higher levels of investment and cost of sales. Meanwhile, sales investments in slowing or declining economies should be carefully evaluated and possibly trimmed. The governmental differences across markets, including legal, customs and taxes, cannot be ignored as well, and directly influence the economic realities for each market, as well as the hiring and firing practices companies must adhere to when modifying their sales organizations.
Market maturity differences. Markets are often described as either emerging, growing or mature. The difference is in the level of awareness and understanding on the part of the customer as it relates to a specific offering. For instance, new technologies in telecommunications and networking may be readily adopted in mature markets that are accustomed to staying on the cutting edge. Companies may have an easier time selling in mature markets. But they may realize higher revenue growth opportunity in growing and emerging markets.
Buyer preference differences. As much as people are the same all around the world, our tastes differ, and as a result, our preferences for products and services are different. Some of these differences are cultural or societal and so can be analyzed and addressed at the market level. Business schools are full of case studies where a U.S. company took a product designed for Americans and tried to import it into another country with disastrous results. The differences may be product-related and/or process-related, as in the way customers buy and the relationship they desire with the company. The solution may require customization of the product, or the approach or route to the customer, or both.
Large companies that operate across multiple continents can often have stark internal differences of their own, resulting in different models and practices across markets within the same company. These can be a result of mergers and acquisitions, a decentralized governance model or differences across product divisions. In our experience, these internal differences can often prove more challenging to address and overcome than external market differences. In certain markets like Europe, the differences can develop at the country level. Differences in leadership styles, sales cultures, channel models, role definitions and sales compensation practices can make it difficult to align strategies and sales deployment models consistently across markets with similar buying needs.
How well does your 2015 revenue growth plan account for these market differences? What can we learn from leading companies in these areas? This spring the Alexander Group will be conducting research on the impact of these market differences and what leading companies are doing to address them. To learn more about this study, please contact Michelle Rittenberg at firstname.lastname@example.org.
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Original author: Paul Vinogradov