8 bits of advice you need before expanding your CEE SaaS to new markets

Expanding to new markets is exciting but also demanding. The whole process is rather a big experiment, but there are certain things that you can plan and research before launching a new market expansion.

Zuzana Zamborska has been expanding SaaS, Fintech, and service companies to new markets for the past 8 years. She has been leading the business development of Czech and Slovak companies to the CEE and EU region, later also to the US.

After years of experience, she concluded that there is no pattern of expanding various verticals to different markets. But there are some points and activities that can be planned and executed in advance to mitigate the risk of expansion failure.

Let’s go through 8 practical tips about expansion you want to take advantage of once you decide to expand your business to a new market.

1) First things first. Research.

Before selecting the market you will expand to, do macro-economic research and put together your Competitive Arena.

From Macro-economic research, you should get a glimpse of understanding the market, which can include GDP, investments & business relations with your domestic market, travel connections. Do not forget about the market maturity to check if your offering is relevant.

Enehano is a Czech based company focused on implementing Salesforce CRM solutions. After a few years, it reached the local maximum, so it needed to start looking for markets to expand its services. Thanks to the opportunity of getting Czechinvest funding and their insights, Enehano decided to focus it’s expansion in the US. We focused on services targeted at Billing or Salesforce Community Cloud solutions. — Zuzana Zamborska

Here’s a free socio-economic chart you may want to use for your research. You’re welcome.

Firstly, define what is your unique value proposition (UVP) and based on that, check out your direct and indirect competitors in detail: what is the number of employees, what are their products/services, who are their customers, do they have crucial certifications to your business, are media writing about them, if so how do they position themselves.

You should set the attributes that you need to research as you know the best, what are the differentials your customers are looking for. Later on, based on these features, you can iterate and look for your unique offering. In this case, the Blue Ocean Strategy might be handy.

To give you an example. When Zuzana was expanding the company’s services to Nordics, the competitive advantage was their expertise in the financial sector. The strategy they followed was to build local teams cause nearshoring wasn’t the option. In the research, she focused on companies whose expertise was in the finance industry with a stable local team presence at each Nordic market.

You can spend a lot of time doing research. Be aware that there are plenty of rabbit holes to follow. Two tips that can speed things up:

1. Mystery shopping — understand the sales process of your competitors.

• How many calls do they need before sending you the offer?
• What information do they collect?
• How do they communicate?
• What does the pricing look like?

2. Talk to domain experts — especially in the start they can help you tremendously to gain a basic understanding of the market instead of researching on your own.

2) No Sales. No Expansion.

When expanding to a new market, the only way to validate is to sell. On the other hand, you cannot plan a detailed and exact sales strategy within an expansion, it’s more of a test and measure strategy, meaning do more tests on what works for you in sales on the market and what doesn’t. After each test, measure its results. Once you have data from at least half a year, you may plan a more sustained sales strategy. Here are 5 different sales experiments you can try.

You should be clear about which channels you will approach your prospects. The most important would be a customer case study with tangible results, which you will bring to the new markets. This way, you can create messaging, a pitch deck, and a kickoff. Or in other words: Try to be as personal as possible when you approach people. Always offer them the value they see at first glance.

See the difference between these two messages targeted to FinTechs:

I run COMPANY NAME that is BRIEF DESCRIPTION. We are helping companies to automate their marketing and bring them more qualified leads.

VS.

I run COMPANY NAME that is BRIEF DESCRIPTION. We recently implemented our product to one of the fastest-growing FinTechs VERTICAL in the EU CUSTOMER NAME. We managed to replace the inhouse ineffective solutions with our product that helped them to get 80% more qualified leads. Check out our case study.

3) To-Do Reselling Partners, Or Not To Do Reselling Partners

That’s the question. In some cases, depending on your business, you may search for reselling partners. If so, do not forget to search for them before selecting the target market.

Here are some pros and cons of reselling partners:

PROS:

• do not cooperate with your competition
• help you to spread your brand on a new market faster
• boost your sales activities without hiring a new full-time salesperson
• gain market know-how and gain most of the reseller’s contacts

CONS:

• you can’t directly influence how many leads they bring
• you can’t determine the sales cycle speed
• you have to brief them properly and create a knowledge wiki
• you have to allocate internal capacity for their support

From Zuzka’s personal experience, once you have a performing reseller partner, you can expect that they can bring you up to 10–15% of your business in the new market. To support your reselling partner and get the best performance out of them, create a wiki with all your company materials and knowledge.

4) ABM, LinkedIn, and more

Your marketing and sales strategy depends on your product or service. In the beginning, there is a greater need to dedicate yourself to sales than to marketing. As mentioned above, there is no expansion without sales. One initiative that we recommend to capitalize on is ABM (account-based marketing). It will be well aligned with your sales.

In Zuzana’s personal experience, the most influential channel is LinkedIn, not the company profile but the personal profile of the expansion manager. To build your brand and get first leads, create relevant content on your LI profile. One should also not forget about direct mailing when you decide to go for it, messaging should contain a powerful case study in a particular vertical. For direct mailing, it is good to have an automation tool where you can create email sequences consisting of at least 3 emails. Out of the tons of automation tools, Zuzka recommends Lemlist because:

• it has features to send personalized emails such as adding pictures with the customer logos or your customized videos
• you can easily set up email sequences and decide the day/time of sending
• it includes the analytics of the open/click rate
• it has integration to many different email providers

And of course, the obvious — events — research for online or offline that may be suitable for your sales, networking, or pitching activities.

5) Will you find skilled employees?

In the expansion, you have to be always two steps ahead, so your expansion checklist should include HR research. It is crucial to check the seniority for roles you may once hire and what skill set you need at the market. Lastly, you should consider whether you employ people locally or your colleagues will travel steadily to the foreign market, this way your team would work remotely.

6) Are you getting an office?

Another important thing you should consider is whether you plan to open a branch with a physical location on the market or you will operate remotely. Before opening the branch, compare the costs of the rent in the coworking spaces and office spaces.

From Zuzka’s experience in the US market, they decided to operate from a coworking space, as it was about the same price as renting a separate office. They leveraged the possibility to host events and engage with the already existing community. Before covid-19 for service companies was almost necessary to be present as some customers required the physical presence. Legally it’s not essential to incorporate in the market from the beginning of your expansion, especially if you are an EU-based company. If you are not, you should check with a few prospects what their statement and the legal process they require and then act based on your research. On the other hand, if you plan to raise investment in the market, you should undoubtedly consider incorporation.

7) Smart Money

If you are thinking about raising a new funding round, keep it on your mind while selecting the market.

For example, when expanding to Poland, check Polish investors who might be interested in funding you. Once you get invested, you will also gain valuable connections, an intro to first customers, potential sales reps, etc.

8) Set Your Scenes

Last but not least, set targets for your expansion so you can evaluate its results. The genuine period for the evaluation is after 6 months of your efforts.

Usually, you may want to set:

1. the best-case scenario
2. the middle-case scenario
3. the worst-case scenario

Evaluate these scenarios based on the axis of resources and expected outcome.