This is part of a series of seven posts. The first can be found here.

#5. providing poor pales channel support:

Unless you’re willing to invest in a dedicated sales team, you’ll have to find help to close deals and manage your US customers. This is where manufacturers’ representatives and distributors can help you, but only if you treat them with the same support like they are your employees.

There’s a general misconception, both with Israeli and US companies, that reps and distributors primary focus is to generate new sales. While they might get your products in front of their existing customers, their strength lies in closing and maintaining customer relationship. Don’t expect them to actively prospect new leads — unless the prospect has an immediate need.

Know that they have to manage all of the products they represent, not just yours. Most of them carry or represent a dozen if not more manufacturers — making very busy and easily distracted.

You can’t expect them to treat you like their number one manufacturer if you don’t provide them with the basics:

• Great sales tools (asked them what they need)
• Ongoing product training (webinars are fine supplements)
• Face-to-face time meeting with customers and prospects in their territories (minimally once a quarter you need to help schedule meetings)

The truth is that they are often neglected by the manufacturers that they represent — especially American companies. So any special attention that you offer — such as providing qualified, ready-to-close leads or bimonthly joint sales calls — will help you gain more of their attention. And in return, they will help you generate more sales.

But be sure not to take on more distributors and reps that you can truly support — or you’ll fail quickly. Many companies make the mistake of believing that they need coast-to-coast coverage, and sign up reps and distributors accordingly. They believe that they need one in every state of the United States — that’s pure bullshit. Don’t hire a rep in North Dakota, if there are not many prospects in North Dakota.

Focus on the regions that have the highest concentrations of companies and where you can provide staffing support. When you understand the one niche market that you’re focusing on and where clusters of those prospects are located, you can develop your sales channels efficiently. You can also support them effectively, cut your travel expenses significantly, and generate sales more efficiently.

Your sales channels will support your sales growth only if you can effectively support them.

Next Sin: Giving Up too Soon

This is part of a series of seven posts. The first can be found here.

#4. focusing on branding, not lead generation:

The dot.com boom (and bust) happened in the early stage of my career. In the late 90s, I spent a lot of time in the San Francisco Bay area. Back then, there were a lot of companies that raised a lot of money to kick off their Internet startups. I remember attending a lot of launch parties during my visits. They were excessive, booze-filled events that were meant to grab the attention of the media.

During one event, I remember chatting with the company’s marketing director who earned an MBA from a well-regarded school. He told me that his startup spent $250,000 on the event that evening — my Midwestern jaw dropped. He grimaced at my reaction, and said that generating buzz and brand recognition was the new way of doing business. I took his business card, as I had done at all of these events, smiled and left.

Today, not a single one of those companies whose business cards I collected are still in business. While many of these US marketers had learned this lesson in the late 90s, I still see many exporters making this mistakes today.

While great brand recognition often helps the sales efforts, it far from guarantees them.

For many emerging B2B tech firms, great branding is a byproduct of successful sales efforts. And to get sales, you need prospects. And to get prospects, you need effective lead generation efforts.

Developing a great lead generation program doesn’t take millions of dollars or flashy presentations and brochures. It takes common sense and focus:

• Make sure your basic marketing materials — whether they’re brochures, presentations, white papers or even websites — all have a strong “call-to-action.”
• Make sure they are written to the industry that you’re targeting.
• If you just starting out, make sure that your prospect list is well under a thousand well-targeted contacts — 400 to 500 is ideal.
• Messaging is more important than method — you don’t need a Facebook page if you focus on creating a dialogue with your prospects.
• Focus on a higher frequency of “touches” instead of flashiness — which is expensive and guaranteed to have minimal return on investment.
• And don’t forget inside sales support — especially if you’re working with distributors and manufacturing reps — despite what they tell you, they won’t do follow up calls.

And if you still think that you need brand recognition to break into your target market, reach out to the media, industry analysts, and other thought leaders. For they will have a greater impact on your bottom line than any full-page ad

When you focus on generating great prospects one by one instead of your brand, name recognition will follow your sales growth.

Net Sin: Providing Poor Sales Channel Support

This is part of a series of seven posts. The first can be found here.

#3. being product and not customer centric:

What’s always impressed me about Israeli companies is the immense level of product innovations for a country of under 8 million people. Whether it’s medical technology, software encryption, mobile telecom or from a wide range of other industries, Israelis develop more product innovations per capita than any other country in the world.

That said, outside of you and I admiring this fact, no one cares.

No one cares that your technology might be light-years ahead of the industry. No one cares that your latest feature set is dramatically better than your competitors. No one cares about the awards you won, the staff that you hired, or anything else about your company.

No one cares unless you can show how your innovations can benefit them first.

If you’re truly interested in entering the US market, you need to check your ego at every customer’s door. You need to translate the most recent “bells & whistles” that your developers just released into bullet-pointed benefits that they will deliver. And you need to let your customers, not just your engineers, help drive your product development efforts.

US companies have a lot to gain from the innovations developed by your Israeli firm, but it’s up to you to translate those innovations into benefits that that they can understand.

Next Sin: Focusing on Branding, Not lead Generation

This is part of a series of seven posts. The first can be found here.

#2. targeting too many niches:

America is big: big cars, big people, and big opportunities. Many exporters and small American companies make a fatal mistake when trying to grow their sales: they bite off more than they can chew.

This common American phrase means that often people take on more than they can manage. This is especially true when you’re trying to enter new markets. Many of America’s niche markets are larger than some countries gross domestic product (GDP):

• Georgia GDP is US$10.7B (2009); US spent $15B on Bottled Water
• Costa Rica is $30B; US spent $32B on Tobacco
• Israel is $200B; US spent $213B on Advertising

While you might not be interested in bottled water or cigarettes, there’s a wide range of niche markets that you can focus on, exclusively, to generate sales. With many billion-dollar niche markets in the US, there’s a temptation is to focus on many of them.

That would be a grave mistake.

Many US companies fail every year because they try to sell their products in far too many markets. Exporters are at greater risk of doing the same.

Those who succeed tend to have a very narrow focus. They may select only one industry, they may limit themselves to one geographical area, or they could do both. The large size of American niche markets offers a lot of room to specialize products to better meet needs, instead of needing to generalize them to sell into more than one.

But succeeding in any one niche market takes time, effort and a fair amount of marketing dollars. Exporters who focus on entering their products into more than one of them at the same time will fail.

So before you consider exporting to the US, you need to invest the time and research on figuring out which one niche market to enter first. A great place to start is looking at where you succeed locally with your own customers, and evaluate those US markets first.

Next Sin: Being Product and Not Customer Centric

As I was prepping for my presentation at Israel-Gateway 2010 this month, I took some time to consider the mistakes many B2B technology exporters make when trying to enter the US market. Enjoy and your comments are appreciated.

#1. misunderstanding scale

The sheer scale of the United States market is mind-boggling, overly distracting, and financially deadly to those interested in exporting their products to Americans — especially within the high-tech space. But let’s throw out some quick numbers:

• 7.5M people in Israel; in the US: 307M
• Urban Tel Aviv is home to 1.3M; there are 2.5M nurses in the US.
• 610K live in Haifa; the US has 689K science & engineering staff in the computer hardware industry alone.

These mind-boggling numbers do not mean that an Israeli med-tech company’s products for nurses have a potential market of 2.5 million. Their market potential is a small fraction of that audience — especially when their competitors have been selling to nurses for decades.

The US market can be overly distracting as well. Most successful US businesses succeed through specialization of their products. Overseas companies, especially from significantly smaller home markets, are at a disadvantage. Products developed within smaller countries often need to be designed to appeal to a wider local audience with more features to fit more of prospects. This generalization of products works against you within the US.

For example, let’s say an Israeli software developer creates a point-of-sale system for smaller retailers. Their POS has sold very well to clothing stores, gas stations, bakeries and many other small and medium-sized stores within Israel and other smaller countries. But when they tried to sell it into the US, they ultimately failed. There are 115K gas stations in the US and 53K retail bakeries, and each of them expects that their POS is specialized to their own types of stores.

And with a country as large and complex as the United States, many companies’ efforts are financially deadly: they overestimate the market potential while underestimating the cost and time to enter a market. They forget to factor in customization costs, sales channel development and a wide range of other necessities needed to export their products into the US market.

So does that mean exporting your products to the US is near impossible? Not at all — it takes time, some product specialization, and the support from people who understand the scale of the market for you to be successful.

Next Sin: Targeting too Many Niches