Intro
Working with a local sales agent or representative is a bold yet strategic move for businesses aiming to scale internationally, especially when operating with limited investment resources or attempting to challenge the status quo of existing operations
This approach is often utilized in the earlier stages of global expansion to validate opportunities and develop new markets. However, even businesses with mature international operations continue to rely on local agents as trusted advisors to assess and enhance in-country execution.
Typically, the three most common activities performed by an international agent are:
- Validating market feasibility
- Adjusting the value proposition for the new market
- Building and Managing a Complex Ecosystem, including Resellers or Distributors
Validating market feasibility
Experienced local agents provide invaluable insights into the feasibility of entering or expanding within an international market
They offer detailed market research that covers demand, competition, local consumer behavior, pricing strategies, distribution channels, and regulatory factors
These insights are crucial for making informed decisions about whether to proceed with expansion and can help reduce the uncertainty often associated with entering new markets
The agent’s expertise provides a competitive advantage, allowing you to assess market conditions and make necessary adjustments before committing significant resources
Adjusting the value proposition for the new market
Agents play a pivotal role in helping tailor products or services to suit the unique needs of a new market
Acting as your “eyes and ears” on the ground, they bring essential local knowledge that helps fine-tune offerings to ensure they align with local consumer preferences and meet regulatory requirements
Whether it’s modifying product features, gathering consumer feedback, or assisting with design and packaging, agents help ensure that your value proposition is effectively adapted for the target market
By leveraging their market insights, you increase your chances of success and establish a solid foundation for long-term growth in the region
Building and Managing a Complex Ecosystem, including Resellers or Distributors
Agents are essential when it comes to building and managing a complex ecosystem, resellers, and distributors
They help identify, select, and establish relationships with the right partners while providing ongoing support and ensuring smooth communication
Agents play a critical role in building trust, monitoring performance, and fostering collaboration between all stakeholders, which is essential for expanding the market presence and driving sales growth
Their local expertise allows you to sustain long-term value that aligns with market dynamics, helping your product reach a broader audience and grow in a new market
Market Development Alternatives
Agents or representatives
Role: Represent your brand with limited authority to negotiate. Often, they assist your team in managing and negotiating in-country business requirements
Working Style: Agents usually work with multiple brands, not just yours. Ensuring alignment with your internal expectations, and incentives is key to a successful partnership
Trust and Network: A good agent comes with an established network. However, an experienced agent will typically only share their best contacts after they have developed trust in your company and value proposition
Local Offices
Cost Considerations: Local offices are more expensive because they require hiring not only sales staff but also support personnel (e.g., accountants, lawyers, legal representatives)
Corporate Preference: The preferred option for doing business with local corporations: legal presence and taking on in-country responsibilities
Control: A local office gives you full control over marketing and business development directly within the country, allowing for more tailored strategies.
Digital Sales
Suitability: For high-volume products, like plug-and-play software, distance selling can be a viable option, as it allows you to manage everything from abroad
Payment and Support: Local payment options and customer support in the local language may be required
Lead Generation: Digital strategies, including marketing inbound and sales outbound activities, can be effective when combined with an adjusted sales playbook for the local market. Understanding metrics like LTV (Customer Lifetime Value) and CAC (Customer Acquisition Cost) is essential when deploying digital sales efforts.
Finding and engaging the best agents to work with you
Finding top-tier agents is like recruiting top sellers from any organization
The best agents are already working with leading deals and are part of a selective group
These agents can often be found through government agencies or referrals from other agents you’ve worked with in different markets
Key Considerations When Approaching Potential Agents
Reputation: Agents are selective about their partnerships and highly protective of their reputation within the local ecosystem. Ensure that your company aligns with their standards and values.
Transparency: Communicate your value proposition and expectations to foster a strong working relationship
Background Checks: During negotiations, thoroughly assess the agent’s background, both at the company and personal levels, to verify their integrity and trustworthiness. A highly positive but unverified agent may raise red flags
Initial Agreement: It’s recommended to begin with a small, low-risk project (such as a funded proof of concept) to test the working relationship and market feasibility. Define clear timelines and deliverables to ensure both parties are aligned and can evaluate the collaboration before making further commitments.
Conclusion
In conclusion, working with sales agents or representatives can be a highly effective strategy for scaling internationally, especially when resources are limited or when you're entering a new market
Agents provide crucial local insights, facilitate market development, and help establish sustainable networks of resellers and distributors
By carefully selecting and managing agents, you can ensure a successful market entry and long-term growth in international markets.