Having a strong Value Proposition is vital to successfully entering new markets
Where can companies look for inspiration and help in exporting? The news that Enterprise UK is closing in April after it was announced that the Government was withdrawing its funding is not helpful and the governments new initiative “Business Coaching for Growth” is yet to get going.
UK Trade and Investment provides assistance on exports but there are a number of things you can do to help your organisation get fit to enter export markets. You won’t be surprised to learn that we passionately believe that creating and defining your value proposition is a key part in developing and optimising your export strategy.
Talk to your Existing Customers
The first thing to clearly establish is what it is your customers and your potential customers really value about the product or service you provide or could provide. This is a key component in your company’s value proposition. It is easy to make wrong assumptions and fail to maximise your appeal because you put insufficient emphasis on the right attributes of the product or service you are selling and fail to take sufficient account of cultural and business differences in the export markets you are entering.
The best way to gain clarity on this is to talk to some of your current clients and ask them. If they confirm what you already suspected then you can move forward with greater confidence and establish a clear road map for growth. If what comes back is unexpected then you can adapt your approach and sales strategy to take account of the findings. Either way it will provide you valuable insight on something you can’t afford to get wrong.
Talking to your existing customers is the best way to get an objective view of where your value really lies. Then you can test to see if this can be ported over to new markets.
Choose Your Channels and Communications
Your value proposition impacts on a whole raft of other key decisions. Understanding clearly what your customers value will impact on other business decisions you need to make, for example are you going to sell direct to the customer or via a distributor? You can enter into a licensing agreement or joint venture with a third party or you may even open a branch in the countries you are exporting to. If customers raise speed of delivery and customer service as areas that they value greatly then you will need to adopt a strategy that doesn’t compromise these aspects of your value proposition.
In export markets communication becomes much more important and difficult to achieve cost effectively and efficiently. Cost of travel, language and cultural differences, customer behaviour and media consumption differ greatly across Europe and even more so if you are exporting further afield to India, China or the Middle East. Your value proposition will help you focus on the aspects of the product or service you should concentrate on and this in turn will help you establish the most cost effective PR, marketing and sales activities to adopt. The rules on products, advertising and marketing standards also differ considerably by country.
Choose the Right Customers
Picking the right customers to do business with in export markets is even more important than it is in home markets. A well developed value proposition takes into account risk as well as opportunity so it will help you to identify customers that are the best fit for your business and avoid those that aren’t. Plenty of businesses go bust chasing customers who are inappropriate for their organisation because they will never value sufficiently what you provide. Rule No1 – Only choose customers who want and value what your can provide. Even if customers only say that they want low price, there are always others ways to add value and not get caught up in the low-price vicious downward circle. Although pricing is made even more tricky when you take account of currency fluctuation and taxes. As an SME with small margins for error, selling purely on price in overseas markets is a very precarious business. Your value proposition will help you to establish and maintain client relationships based on the value you bring of which the product or service you sell may only be a part.
Establishing a strong value proposition is just one consideration when seeking to export to new markets but it has an important role to play in informing those decisions.
Futurecurve are proud to be an Enterprise Ireland partner working on the Export Selling Programme for SMEs.