This blog post has been updated on the 13th of October, 2020 at Rinne & Partners website click here to read.
Different options to sell abroad
International B2B sales
Online
You could try to sell online. Crucial here is that you have clear in your mind who is your target customer and how can you motivate them to visit your website. The customer journey needs to be well thought off and the product or services needs to be simple enough to understand and buy so that customers feel comfortable to complete the purchase. If not, you should still engage in content marketing and social selling to generate leads for your sales team.
Airport hopping
Secondly, you can try to sell from home base. To be honest, I haven’t seen this method work. You need to have local people to do the job. Also, this is hard, time-consuming and many times frustrating. When the company CEO is doing a road show abroad, expect to see a dip in the cash flow from the
Payroll
You can hire your own salespeople. If you have the budget to pay for a good base salary + social security costs + commission, this could be a viable option. You need to really focus on the recruiting process with proper interviews and reference checking. You should be clear on targets (not unrealistic ones, it does take time) and prepare to be patient until the first one is closed. Formal employment agreements, compensation plans, other incentives,
Sales team outsourcing model
Actually, I don’t like to use this term at all. Companies shouldn’t outsource one of their most important core functions – sales. I have heard a word insourcing, which sounds better to my ears. If your business model is a channel, the approach is different, but also in this case you need people to manage the channel. In this blog I’m talking about hiring – not employing – sales team members to the market you’re about to conquer. So instead of employing your own people, you sign a contract with a full or part-time sales professional to work locally with end customers and/or partners. Usually, you pay a fixed retainer + commission.
Pros for using a contractor
Although you usually pay more per job or per hour, you will most likely save money overall since you are not required to pay them any benefits and do not need to commit to a salary. You have greater flexibility. When you work with an independent contractor and it is not a good match, you simply don’t hire them again. When you have an employee that doesn’t work out, you may need to fire them, which is not always easy. You can hire the right person for the task needed, contracting someone with specialized service. They often have many years of experience, so you do not need to train them. They are responsible for their own offices, permits and professional licenses.
Cons
You could lose some control over how tasks are performed because you cannot always closely monitor their work. So you need to manage your resources. They are hired short term, so you might not get the same worker for the next project. They usually operate on a first term, first serve basis. They have no sense of company loyalty but are a hired gun for one specific job. However, the key is to find the right profile to your team and do all required to motivate her/him so that you’ll have a real sales team member also for the long run. Most of the cons above can be managed with proper planning and good management.
Choosing a contractor
You should carefully evaluate your contractor to avoid huge disappointments. The world is full of service providers claiming to do this and that, but do not perform. You should focus on at least the following:
- Find the right partner that focuses on sales, forget about market entry consultants (you’re looking for a sales team member yes?)
- Do your homework and check references
- Interview candidates and make sure they have experience and contact to your target segment
- Be careful with agreements
And when you have signed:
- Engage your hire to get proper market feedback
- Prepare; do your go-to-market plan,
productise your value proposal - Training is key
- Manage your sales team professionally with regular sales calls and proper reporting
If you manage to find a good partner, you have a possibility to strike good business. Many service providers can offer more valuable services to you such as inside sales, lead generation, market research etc.
So…
There’s no one answer whether you should go for the contractor model. It depends on your company, your services, target market, and numerous other factors. However, if you are concerned about costs and wish to start in a new market with a lower risk, hiring a contractor could be your cup of tea. Please bear in mind that there are no shortcuts to success and prepare to run the operation at least 12 months before seeing meaningful results.
Happy to share my experience on working with contractors over the years.