Tips for growth

Tip1: Try Market Mapping

To grow sales in a market, especially an offshore one – what do you need to know? This question is usually answered with “I need to know who my customers are”.

This is a good place to start, but typically misses the more important questions of “What does the marketplace look like?” and “who else operates in my marketplace?”

Most professional marketers will prepare telephone book sized reports to describe a market and drown their readers in facts and data. These can be useful, but successful business is usually about linked relationships – between suppliers, manufacturers, distributors, retailers and of course the consumer.

Virtually every business operates in a market that has different hierarchies or layers, with businesses operating at one or more levels. To really understand the market (and your company’s place in it), we need to accurately describe, in real time the relationships between all players in that market.

Because humans process information and data more easily in a visual context, CTM has developed a process called Market Mapping to help business owners visually describe their market.

By developing a market map, you will be able to link your relationships and opportunities and compare your position to those held by your competitors. Your strategy will become much clearer and your sales and marketing performance will improve dramatically. Get in touch if you'd like to learn more about what this approach can do for your business.

Tip 2: Learn how to evaluate the different routes to your target market

When breaking into or expanding sales in an overseas market, there are 2 main options to consider:

1. Choosing between direct and indirect distribution strategies

2. Evaluating a licensing model vs. a channel model

Once you've done this, you then need to think about how you go about finding, assessing, selecting and working with partners who will help make it all happen.

1. Choosing between direct vs. indirect distribution

When choosing between direct and indirect approaches, there are a lot of things to consider. This 1 page document illustrates the basic points in a simple 2x2 matrix which will help with this decision process.

Refer to the 2x2 matrix in the document and consider the following:

- High volumes combined with low margins will make it difficult for you to scale your own direct structure. If you have a lot of low value customers to handle quickly then you are likely to require distribution partners. Indirect approach favoured.

- If you have lower volumes and some good margin, then you have a better suited model for a direct approach

- Low volume and low margin – you are headed in the wrong direction!

- High volume and high margin will be difficult to handle directly, but this is a nice problem to have

2. Evaluating a licensing model vs. a channel model

The title suggests that the two are mutually exclusive – which they aren’t. But, in this usage we are distinguishing between setting up and managing a channel yourself or licensing a partner to do this for you. The best way to make a decision here is to carefully list out all of the functions required to make a complete sale, beginning to end.

The table in the bottom half of the same document shows some detail of the four main functions you need to think about. It is by no means complete - think of it as just a starter list.

Look at the table and consider this: if you go direct, you need to do all this yourself.  By comparison, if you choose to go down the channel route, you get to outsource parts of these lists, but you still have to effectively manage the channel to see they do their part, which is a challenging speciality in its own right – especially if there are functions the channel are meant to fulfil, but they do not get remunerated for – these parts will not happen.

If you choose to license, then you can enjoy some benefits such as getting some income as capital payments, up front fees, being able to slice and dice market opportunities for example. You do need however careful IP protection and good management of the relationship to mitigate your risks.

This is a complex area - contact us to discuss your specific circumstances!  We would also be pleased to talk to you about finding, assessing, selecting and working with partners who will help make the above happen.