I’m in B2B consultative selling for the past 18 years. For 9 years I run a boutique sales agency for software and services companies that want to enter and work the DACH market (Germany, Austria, Switzerland).
After all those years and different projects, let me summarize my very own, personal findings on how to beat competition. This is by far not a scientific research, it’s rather a hands-on experience from a quota-carrying sales guy.
Sadly, I see only 3 ways how purchases are made – ultimately, after the official bla bla:
- Buy local
- Buy cheap
- Buy from the best
You can’t play all 3, so let’s take a look at each one and find out what works for you…baby, I know the answer already.
1. Be the Local Partner
People tend to buy from local companies because of the following expectations they have on local:
- Easy and efficient collaboration (language, culture, time zone, travel, personal relationships).
- High flexibility and willingness due to tight connections.
- Effective escalation points due to instant access to decision makers.
- Calling them partner means they don’t pay for extras.
Examples for buying local:
ERP systems. In each country (no matter how small) you most probably see at least 10 ERP vendors serving their home market and they all have a decent market share. Crazy but fact.
Local SW engineering. Why would a local bank work with a local and expensive SW development company to develop their digital services? Just because of the reasons above.
2. Be the Cheapest
The more commoditized a solution (product or service) is, the more people tend to look for the cheapest option. People are educated, are aware of the risks and they do understand well that when they go for cheap they have to compensate missing components with their own resources.
A good example for buying cheap is business process outsourcing (BPO). Large and mature enterprises can successfully outsource some of their business processes (even difficult processes like SW development) to low-cost centers in India, China, Vietnam. Why? They know how to compensate the associated deficits with their own resources (so called management overhead) and it still pays off.
3. Be the Best
People also look for the best matching provider. Especially when cheap is too risky and local is not compelling. “Best” can mean totally different things for each market.
Obviously there are many examples of being “the best” in all industries and verticals. Some criteria are really obvious, some are absolutely not.
And what does that mean for you?
There’s not a lot you can do about “local” and “cheap”, except you decide to sell just in your home country or you are from Vietnam. Setting up a legal entity in Germany and having local, german speaking sales is a smart move and will help you in selling your stuff but doesn’t make you a local partner.
When people look for the best option they have to leave their comfort zone and look for various alternatives. They become more open. More open to discuss. More open to talk to good sales people. And this is your chance to start with consultative selling and to create an opportunity for you – and not for your competitors.
Therefore, for almost all of our clients “becoming the best” is their only way to succeed outside their home countries.
Some typical examples I’ve seen that didn’t work:
- Document scanning and digital archiving company from Greece that serves all major banks and many large domestic enterprises. Very successful in their home country but no proper value proposition for Germany due to commodity services where people look for either local or extremely cheap solutions.
- HRM (human resources management) software vendor from Slovakia that sells extremely successful in Slovakia and therefore tried to repeat that success story in Austria… But people in Slovakia (and in Austria too) do prefer local HRM providers or systems that are considered as global leaders (“no-risk option”).
- And I have many other examples (unfortunately) I can tell you on the phone.
But here’s also a few good examples just to make you think about your own value proposition:
- Can a Hungarian software engineering company be considered as the best software outsourcing company? Probably not. Can they be considered as the most valuable partner for German digital agencies when it comes to software development projects with customer experience and usability challenges? Absolutely!
- Can an Italian IoT platform be recognized as the best IoT platform in the world? Maybe. But isn’t it more likely to be seen as the best partner for HVAC manufacturers to enter the new and constantly changing world of IoT and smart services? Oh yes!
- Again, more on the phone if you are interested.
You should take away
- If you’re not a local company and not the cheapest in the word, your only chance is to be “the best” in something.
- Being “the best in something” is relative and depends on the niche you serve (target group and their needs, competition, your offer). Good news: You define the niche where you are the best!
- If you don’t believe that you can be the best in something, then your prospects will not believe in that either.
Can BizXpand help you to find out in where are the best? Fuck, yeahhh! That’s what we always do as one of the first steps to bring a company to the German markets.