3 Hacks to Keep in Mind When Expanding to New Markets
The secret to expanding into geographic unknowns can be found by listening more, especially to locals who know it best.
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A question that regularly pervades the thoughts of ambitious entrepreneurs is, "How do I take my business proposition into new geographic markets?" The thought of sharing your vision and offering with the rest of the world can be a heady and daunting one. While geographic expansion may not be essential to success, attracting new customers can unearth an area ripe for rapid growth and, if executed well, you can scale your business globally.
Having started a business in one country (the U.K.) and then launching and building in the U.S. (now our biggest market), here are three hacks I've learned for launching into new terrains.
1. Put your boots on the ground.
There is no substitute for spending time in the destination before you launch, using that period to understand your audience and their culture to determine whether your product is a solution they actually need. Many companies pursue expansion based solely on online research, a few scouting trips, and a belief that smart SEO and digital engagement will reel in customers from disparate locales.
The powerhouse coconut water brand Vita Coco successfully expanded their offerings into the U.K. (far surpassing the original U.S. market) very deliberately and with some ingenue, activations, and giveaways that appeal to different types of consumers. They understood expansion also meant keeping prices competitive across different markets, while shedding the elixir's former yuppie image to make it accessible. The learning? Spend time in the market, see what matters, ask questions, become the audience. You needn't live there but regular immersion with the consumer helps entrepreneurs understand the culture and, most importantly, where the opportunity lies.
2. Lay your trust in local experts.
Many businesses experience 'failure to launch' when exploring new markets where huge swathes of capital are invested only to get fundamentals of the strategy wrong and ultimately come up short. For example, Dasani poured millions into its U.K. launch and failed by duplicating a product that worked in the U.S. without adapting to a different consumer. In the UK, because Dasani was not sourced at a pristine glacial spring but instead merely filtered water, it tanked with a consumer base who appreciated the unspoiled image of the natural world. A commonality in these failures is that these businesses did not work collaboratively with local partners to facilitate their entry strategy.
Many companies invest heavily in outsourcing by shipping staff and extensive resources from their original market, at considerable cost, instead of finding local partners at the outset. Working with localized partners brings market knowledge and insight that help grow and amplify your offering at arms length without having to commit huge amounts of capital. Local partners take various forms depending on your needs from public relations, marketing, and distribution to many more. Be deliberate in selecting plugged-in local experts and set clear goals for them to help you test, introduce, and shape your offering to provide a foundation upon which to grow.
3. Tailor your offerings and adapt to different markets.
A common mistake businesses make when entering new markets is assuming their original offering is perfect as is, not tweaking and adapting to best suit demands of the target audience. While the world is increasingly globally connected, local quirks and nuances still need to be factored into your offering. Pret a Manger achieved massive success with this by realizing that U.S. customers chiefly demanded customization, variety, and are impacted seasonally.
When launching Black Tomato in the U.S., we identified that the needs of our target audience varied from the U.K. market from style of service and marketing messaging to destinations and travel experiences. As a result, we adapted our offering to suit that. We also saw nuances in customer needs from state to state, so adapting our communication and strategy was a key for success. We were thinking about and listening to our new customer instead of bulldozing with a one size fits all approach. As an outsider approaching a new market, winning the 'hearts and minds' of your audience by thinking thoughtfully about them and being prepared to tweak your offering is critical. Doing so will help build an initial customer base that facilitates growth with a level of confidence in the long-term opportunity for the new market.