Expanding into new geographic markets can be a game-changerfor your business, but success is not guaranteed. McKinsey & Company says approximately 75% of B2B companies fail to achieve their expected results when expanding into new geographic territories, with the first 12-18 months being particularly critical. What?!!The most common reasons cited were not doing market research and underestimating local competition.
With careful planning, strategic decision-making, and an in-depth understanding of local dynamics, you don’t have to be a part of this statistic. Executing this correctly needs a mix of research, adaptability, and a good gut. Research by Gartner1 says smart segmentation, crafted messaging, and choosing the best channels to reach them are critical factors that influence your success.
Let’s dive into the three top points to ensure your expansion is not only smooth but also sustainable.
Smart Segmentation
A frequent pitfall of moving into a new geography is to assume that your targeted segments in the new location is identical to what you’re used to. Your go-to market strategy should not include focusing on trying to be relevant to too many segments, either.
Focus on validating your new market segments by building up a few first early adopters, and understanding their specific preferences, needs, and behaviors.
Start small - pick 3-5 early customers who are excited about trying new things. Give them a sweet deal to get them on board and prove your product works for your target market.
Keep in mind that selling tactics that worked back home might not fly in new markets. Pay attention to who actually makes the buying decisions (like if CFOs call the shots instead of CTOs) and adjust your sales approach accordingly.
Focus on finding the right customers rather than lots of customers. Once you get a few success stories, you can use those to bring more people on board.
And know your vertical, if there is a dominant one in your new market. This ensures that you segment your audience effectively, and that you choose quality over quantity in your targeting. Here’s an example, once a firm we worked with from the Northeast opened in the South and soon realized that race car driving was highly popular around these new clients, they switched out from nightly dinners to NASCAR events and gained new clients quickly.
Messaging: Talk Different
Regional differences influence buyer behavior. According to Gartner, “…however well-prepared you can be, the more subtle market needs will only reveal themselves once you are concretely operating in the new geography and can collect feedback from customers and prospects.”
Don’t forget you’re not likely to be the only firm in there. The local competitors already know how to market so you don’t want to miss your chance to make a good first impression. An early customer or two is extremely valuable in helping you navigate with expertise.
Crafting the right message is crucial for connecting but also differentiating your firm with customers in a way that resonates. Customize your messaging, services, and advertising strategies to fit the needs of each segment. Whether it’s adjusting the tone, highlighting region-specific benefits, or reframing your product’s value proposition, your message should tailor to the local mindset. Show that you understand their challenges and that you can provide solutions that feel relevant.
Best Channels
Your sales playbooks not only need to speak to this market but also on your buyers’ preferred channels, not yours. If you are expanding into areas where certain industries are dominant due to local economic conditions and consumer demands, it is important to be aware of the platforms they use to communicate.
In regions where technology and digital services are prevalent, LinkedIn, webinars, and content marketing will get decision-makers’ attention. In cities with strong healthcare and life science sectors, LinkedIn remains a top platform for connecting professionals, while email marketing and industry specific sites are vital for reaching key decision-makers.
Conferences and expos (both in-person and virtual) are essential for hands-on interaction while paid ads and SEO may be crucial for capturing organic search traffic from companies seeking suppliers or specific industry solutions. Tailoring your choice of communication platforms based on these nuances ensures a more targeted and successful marketing approach.
These strategies, when executed thoughtfully and with sensitivity to your local audience, can increase the likelihood of a successful geographic expansion. By understanding and respecting industrial preferences, you can build strong connections with your audience, driving growth and expanding brand loyalty across borders.
Did you know Leadarati has opened territories in over 20 cities? For help with your geographic expansion, contact us.
1Marchal, I & Xu, C. 2023. Key Actions for Tech CEOs to Successfully Execute Their Geographic Expansion. Gartner.
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