As the CEO of a growing company, one of your biggest decisions is expanding overseas. The US market is large and dynamic, leading to a constant demand for innovation.
A company that can meet this demand can secure predictable and scalable revenue growth. Also, the innovations and improvements the company develops for the US market can give you a competitive advantage in other markets.
Yet in such an aggressive market, a hasty move can cost you that opportunity.
Too often, international CEOs fall short in the USA because they don’t understand the United States. English is the international language, and American culture is everywhere, so many founders believe that they know all they need to know about the USA.
The real story though is in the differences between the US market and the markets they know: They aren’t prepared for American needs and tastes, or the tough competition of American companies.
Founders are eager to make fast sales and often don’t realize how important their company’s readiness and product-market fit are for the new market.
More often than not this results in costly failures. Expanding to the US market is risky, but a methodical approach can greatly increase your chances of success while reducing the cost of failure.
The scope of this guide is to provide international founders with a blueprint of how to prepare for the US market in order to maximize the efforts and results and focus on what matters the most — acquisition of new customers and not losing any opportunities that come their way.
Before we dive into the step-by-step process of preparation for the US market, this section sheds some light on some related fundamental elements, that in our experience not all founders are aware of.
Even if you are an experienced entrepreneur it might be worthwhile to quickly review the basics of:
· When and How to Enter a New Market?
· Methodical approach
· Product — Market Fit
When and How to Enter a New Market?
When and how are two fundamental questions that all founders ask themselves when they consider expanding.
There is no one-size-fits-all strategy, but there are patterns that founders should take into consideration.
Jason Davis, former MIT Sloan School of Management Professor and current INSEAD Professor conducted research that sheds some light on this matter. Here are his key findings:
Timing is everything nowadays in almost all aspects of business, and the same is true with new market entry.
Today’s companies can no longer afford to wait until they become major players in their home market before they go international. The sooner they expand into new regions and markets, the faster they will grow.
Single market or global?
Definitely enter one new country at a time. This allows your company to consolidate and digest the new experience before entering the next market.
It is highly recommended to test your product first in a smaller market before entering a larger market like the U.S.
Seeding or soloing? It’s all about learning.
Successful companies use two dominant strategies when entering new markets: seeding and soloing.
Seeding is when executives begin learning about foreign market entry by looking at what others have done or by seeking advice from experienced consultants or experts.
Soloing is when managers learn about a foreign market through experimentation or improvisation, and then rely on similar approaches over time.
Jason Davis’s research shows that soloing companies, in the first two new countries they entered, took less time to capture their first sale, took less time to break even, and reported higher overall ratings of success than the seeding companies.
But while companies that used seeding did not perform as well initially, they performed better in the long run — when they entered their third and fourth international markets. No matter the method, you need to be ready to learn quickly and learn a lot!
Lastly, Jason Davis’s research reveals another very important insight — the importance of a team’s quality.
Companies with management teams that have broad international business experience are more successful than those whose managers lack it.
Companies with a broad and diverse management team tend to lean more heavily on seeding and are therefore more successful in the long term. They have a bigger network so the knowledge they gain from others is much greater and richer.
Products and markets are unique, but the path to product-market fit is not. - Sean Sheppard
Every product is unique and so is its journey. Nonetheless, each goes through the same steps or phases from its ideation to success.
This is also true for introducing products or services in a new market. Knowing the steps and where you are on the path can help you stay focused and take the right actions.
For example, there is no point in worrying about scaling your sales process or hiring when you have no customers.
By focusing on the right questions and tasks at the right time, you can execute without feeling overwhelmed or getting burned out. Not to mention a systematic approach usually helps to prevent unnecessary mistakes and find the truth early. This leads to smoother processes and faster results.
If you follow a proven method of learning, testing, measuring, and validating, you’ll be able to decide whether you should iterate or you are ready to scale.
This process allows you to create a functional learning organization, find the proverbial product-market fit, and begin to generate predictable, profitable, and scalable revenue, or hit the traction milestones you need to ultimately secure your next round of funding.
Our experience has shown that during the early stages of a company, having a data-informed and market-validated awareness of the predictability, profitability, and scalability of revenue is far more important than the sheer volume of revenue.
Product - Market Fit
There is no doubt that the best early customers are the ones in your backyard. Physical proximity to them helps you to get rich feedback and reach product-market fit faster.
Unless you plan to move to the US early on, it’s usually a good idea to confirm the problem that you solve and prove the benefits of your solution/product with customers that are located near you.
For the purpose of this guide, we assume you have traction and steady growth in your home market. This means your product or service is solving a problem and satisfying a need that people are paying for. Congratulations, you have a product-market fit.
However, do not let your local product-market fit mislead you. Success in your home market is no guarantee of success in the US market. Understanding your market fit is vital to any company that wishes to enter the USA.
When entering the US market, you need to refine your product-market fit. Even if you have already done these things in your existing markets, remember that the US market is unique. Be prepared to do this work again as you enter this market.
At this point, we would quickly like to remind you of the basic reasons why companies lack product/market fit. As Clement Vouillon explains in his article, you might identify yourself with one of the 3 main scenarios:
Nothing is aligned: you have an idea, but you are not sure yet who your customers are and how to market your product/services to them.
There is no market or the product is not good enough.
a) When your product answers a need that is a “nice to have” and not a “must-have” and it’s hard to make users excited and generate repeat business, it means that there is no market.
b) If competing products are better-known, or your current product just doesn’t answer the needs of the customer well enough this means that your product is not good enough.
Distribution is broken: You have a product that answers a clear need for defined customers but your distribution doesn’t follow. Your customers are happy, but you have a few repeat customers and poor lead generation. This can be because:
a) You don’t know how to “market” your solution yet. New solutions or complex products can be extremely hard to explain and market to the end-users. Learning how to market a product can be a long and difficult process.
b) The sales model is not adapted. For example, you sell to Small and Medium Businesses (SMBs) in your local market, but don’t have a lead generation engine that scales to larger companies. Or you sell to the enterprise market but don’t have a great sales team, or your end-user is not the real decision-maker, etc.
c) Distribution brings the wrong type of customers. It’s totally possible to have a marketing team that performs well in terms of lead volume but that brings the wrong type of leads.
Whichever scenario applies to you, keep these points in mind when you evaluate product-market fit in the USA:
Learn how your competitors solve your customers’ problems. This will help you emphasize the advantages of your solution for the US market.
Be your own worst critic, and never assume that your solution is the best. You need to study your market deeply, until you know your customers’ problems as well as they do, if not better. Only then can you be confident that you are competitive.
Don’t underestimate your customer’s urgency — customers solve urgent problems first. This is the difference between a necessity and a luxury — between a real pain point and “nice to have.” If your customers are out of time and money before they even consider the problem you solve, then you don’t have a market.
As we stated in the section Methodical approach, the process of entering a new market is similar for most types of companies. Knowing the steps and where you are on this path can help you stay focused, take the right action, and lower the risk and cost of failure.
We want to share with you the approach we have developed while helping international companies to enter and tap into the US market.
On a high level, entering the US market consists of 3 main phases:
In short, Market Preparation is about checking whether you are ready for the US market and building your hypothesis about potential customers in the US.
Validation is about testing your hypothesis and determining whether you can scale in the US market. If your hypothesis is right, it allows you to build the first version of a market playbook for the US market.
Scaling is about testing, measuring, and pivoting accordingly to the market playbook that you created during the Validation to scale in the US.
As the title of this guide suggests, it focuses on Market Preparation, which consists of the following steps:
Step 1: Company Snapshot
How ready are you for the US market?
Company Snapshot is the first step to the US market. Before taking any further steps, you need to answer the fundamental questions about whether you are internally ready. Being internally ready means having resources to support early market presence and having sales, marketing, and product development process in place and optimized to support early scaling.
You can check how ready you are by following these activities:
During Company Review, you want to analyze your company to create a map of the people, processes, and technologies. Later during the Customer’s Review, you will compare the data from Customer’s Review against your Company Review data to learn whether your sales and marketing approach led to the acquisition of your customers.
The goal of Customer Review is to learn what kind of customers your company is acquiring and how they really were acquired, as opposed to the previous activity where we were just mapping your approach to sales and marketing along with technologies used. You will do it by taking a deep dive into your current accounts. Later, this data will also help you to build your Ideal Customer Profile(s).
Step 1 - Activity 1: Company Review
The Company Review consist of the following activities:
Company Resource Mapping — What resources do you have available today?
The goal of this activity is to learn about your company’s internal capabilities. This information will help you later during Market Outreach and Market Scaling to explore how these resources and capabilities can be adapted to increase competitive advantage in the US market.
A company’s resources can be divided into three basic stacks: tangible, intangible, and human resources.
Tangible assets are typically financial and physical resources to which the company has access to. Intangible assets are — for example — patents and technology, brand names, valuable relationships, exclusivity contracts, etc. Human resources and capabilities, on the other hand, enable these tangible and intangible resources to create value and a competitive advantage for the company.
During this activity, you will have three tasks:
Create a list of all tangible assets with the necessary details.
Create a list of all intangible assets with the necessary details.
Identify each team member’s roles and responsibilities (in-depth) on both the market and product sides.
a) Identify the distribution of time between roles and responsibilities.
b) Identify and pinpoint opportunities for specialization.
c) Identify and pinpoint potential capacity stress factors and necessary hires to scale.
d) Gain clarity on the product and market-focused teams.
Use the following templates to complete these tasks.
Tangible / Intangible assets:
Marketing Process Mapping — How do you generate inbound leads today?
The goal of this activity is to map the company’s approach to generating inbound leads in the current market(s).
Later during the Customer’s Review, this map will help you to determine how effective your marketing efforts have been so far and which one can be improved. You may skip this step if you do not generate any inbound leads at this stage.
Process mapping is a visual way of identifying activities, tasks, and steps in a work process. Process mapping defines what gets done in a process, who does what, and what is produced at each stage.
A process map is a flowchart that can be drawn from a “higher altitude” to show only the major parts of a process, or from a more detailed, “lower altitude” perspective to show all activities, tasks, and steps that go into the process.
The following everyday example shows you how process mapping looks in practice:
Getting back to the marketing process, a higher altitude process map covers all stages from the selection of channels through which a potential customer can reach out to you to become a lead and continue through prioritization to becoming sales-ready. This should also include who is doing what and which tools are used.
Map all the activities, tasks, and steps of your marketing process based on your marketing playbook or any other documents that provide guidelines and instructions for your marketing efforts.
You should also interview employees responsible for marketing. Your employees will be your main source of information if you do not have any internal documents about your marketing efforts.
During the mapping of your existing marketing process, you have to answer the following questions:
What are your current marketing channels?
What is the number of inbound leads per month/year per channel?
What is the overall number of inbound leads per month/year across all channels?
What is your monthly/annual budget per channel?
What are your inbound leads’ prioritization criteria per channel?
How many leads are handled to the sales team as sales-ready per channel?
Who is responsible for each channel?
What tools do you use for each channel?
What is your average cost of acquiring each lead per channel?
What is your average cost of acquiring each qualified lead per channel?
The following template will help you to do that.
Additionally, you should know the answers to the following questions:
Is your website in English?
Is your website Search Engine Optimized (SEO)?
Do you have a content marketing strategy?
Do you have any content in English?
Do you use social media? If yes, how often?
Do you have a lead nurturing process?
Do you have a lead scoring system?
Who should perform this task: Founder | Marketing Manager
Sales Process Mapping — How do you reach out to potential customers and close deals today?
The goal here is to map the company’s approach to generating sales in the current market(s). This will help you later in the Customer’s Review to determine how effective your sales efforts have been so far and which one can be improved.
We have found that by mapping your sales process, people in various areas of the company learn how they all fit together to contribute and create value for the company to achieve the ultimate goal, which is sales.
In sales, a higher altitude process map covers all stages from a lead being sales-ready (at the end of the marketing process) to closing or losing the deal. It will also include outbound efforts that are handled by the sales team from the very beginning. The map should also include who is doing what, and which tools are used at each stage.
Map all the activities, tasks, and steps of your sales process based on your sales playbook or any other documents that provide guidelines and instructions for sales. You should also interview employees responsible for sales. Your employees will be your main source of information if you do not have any internal documents about your sales efforts.
When mapping your existing sales process, you have to answer the following questions:
What is the number of outbound leads that you generated per month/year?
Out of all outbound leads, how many are qualified per month/year?
What is the number of deals won and lost per month/year?
What is the churn rate per month/year (If applicable)?
What are your outbound lead qualification criteria?
What does your qualification process look like?
How long is your average sales cycle?
What is your cost of acquiring each customer through outbound?
What are the most common friction points in the sales cycle?
Do you have any supporting marketing collateral prepared for salespeople to send to prospects?
What system do you use currently to track sales performance & metrics (e.g. CRM, Google Docs, etc)?
How are the responsibilities shared among team members for the sales process?
What are your conversion metrics at each stage of your sales process?
What is your pricing model?
You can document those answers in any way.
Who should perform this task: Founder | Head of Sales
Step 1 - Activity 2: Customer's Review
Once again, the goal of this phase is to learn what kind of customers your company is acquiring and how they really were acquired, as opposed to the previous phase where we were just mapping your approach to sales and marketing.
We will do it by taking a deep dive into your current accounts. Here you will also compare the data from the previous phase to learn whether your sales and marketing approach led to the acquisition of your customers.
Later in Outreach Preparation, it will also help you to build your Ideal Customer Profile(s).
The Customer’s Review consists of the following activities:
The Customer’s Profile Map — Who did pay for your solution until now?
The Customer’s Profile exercise asks you to lay out all of your customers for analysis. You will list out the granular details about each of your current and past customers to identify customer trends and characteristics.
Later, during the Outreach Preparation phase, it will help you to build your Ideal Customer Profiles (ICP) for your current market(s) and build hypotheses for the US.
Additionally, it will help you to deeply understand the pain points that your customers face, and how your product is solving them.
Fill out the account review template below in as much detail as possible — the more detail, the better you can build your ICP later on. By now, you should be able to answer the following questions:
Who are your past and existing customers? What do they use your product for?
Which industry(ies) do they belong to?
Where are they located?
What is their size in terms of employees and revenue?
What is the ideal size for each customer? What is the average deal size?
One-time or recurring (active) customer?
When was each customer acquired? How long they have been using your product?
What is the current status? Why did they churn (if applicable)?
Who are the decision-makers? Who are the influencers? Is there more than one decision-maker in the sales process? Who are they?
What specific reasons can you identify for why that deal was won?
How, how much, and how often are they currently using your product?
How many market segments do you have?
How many customers do you have in each segment?
Does each segment have the same use case? Why or why not?
What is the most common use case of my product? What features are they using and why?
Can you identify any trends across your current accounts and customers?
What is your hypothesis for classifying a good customer vs. a bad customer?
Use this template to do it:
Customer Acquisition Map — How did you actually acquire each of your customers?
In the Company Review phase, you analyzed your approach to sales and marketing according to your playbooks, interviews with your employees, and other documents that provide guidelines and strategies for sales and marketing.
The goal of this activity is to analyze how your company has really acquired customers. This activity will help you to understand where the leads are coming from, of what size, how much time it takes to close the deal, who generates the most leads, and who closes the most deals.
Later, during the Sales Funnel Review, it will help you to determine whether your approach to sales and marketing led to the acquisition of your customers.
Take the list of accounts that you created in the previous activity and map backward each customer’s acquisition path step by step in the following order:
From lead creation to qualification. Gather the following information:
Who brought the lead and how? Inbound or outbound? What was the channel?
How many touchpoints did it take to qualify for the lead?
What type of touchpoints?
What kinds of sales and marketing materials were used?
Who did what?
2. From the lead qualified to deal won, gather the following information:
How many touchpoints did it take to close the deal?
What type of touchpoints?
What kinds of marketing and sales materials were used?
Who did what?
3. What is the length of the sales cycle for each customer?
4. What customer type had the shortest sales cycle? Why? What customer type had the longest sales cycle? Why?
Put everything in a spreadsheet for easy comparison. The template spreadsheet you can find below.
Customer Journey Map — How do your customers experience your product?
For marketing, sales, and customer success purposes, mapping out your customer journey is a way to illustrate each customer’s buying process and the benefits they receive from your product or service.
While a customer journey map can take several forms, the goal is the same: to teach you and your team about your customers — how your customers discover their needs, how they learn about your product, what factors they consider before purchasing, how they engage with it post-purchase and what information they request at each stage of the journey.
Later, during Market Outreach and Scaling, it will help you to move customers from one stage to the next as quickly and smoothly as possible.
In order to accurately chart your customer journey, these are the following key steps you must complete:
Identify your customer lifecycle stages. One example of customer journey stages can be: Need, Awareness, Consideration, Selection/Purchase, Experience/Training, Loyalty, and Advocacy.
Identify Indicators. List down all the indicators that help you to identify which stage your customers are in. At this step, you further recognize what value (or not) your customers see at each stage.
Identify your activities that help customers move through the stages. List for each stage how you help your customers today to move to the next stage in their lifecycle. Identify the people who perform these activities and the tools they use.
Identify content strategy. List for each stage the types of content that you use to move customers to the next stage in their lifecycle.
Use the template below to perform this exercise.
Funnel Map — How do your current sales funnel look like?
In this activity, combine the data that you gathered during Marketing Process Mapping and Sales Process Mapping to create your complete sales funnel.
Now you can compare this with Customer’s Acquisition Mapping. The goal is to learn which parts of your marketing and sales process/funnel actually led to the acquisition of your customers.
Additionally, you need to analyze what strategies and techniques lead to customer acquisition and reallocate your resources accordingly. In terms of things that don’t work, you should dig deeper to determine whether they don’t work: because they are not a fit for your type of business, or whether they weren’t conducted in an effective way.
Once you discard the parts that are not working, you end up with a complete sales funnel that is actually working for you.
Later it will help to organize your sales and marketing approach for Market Outreach. Remember, only being internally ready can maximize your efforts and results and focus on what matters the most — acquisition of new customers and not losing any opportunities that come your way.
Who should perform this activity: Founder | Head of Sales
Step 2: Competitive Analysis
How do other solutions solve the same problem?
Even if your product or service is very competitive in your local market, the American market may have innovations or issues that you haven’t considered. Study your US competitors and learn about their products.
Brian Stolle wrote in Forbes magazine, “The best entrepreneurs know their competitors’ products as well as their own, and are honest and frank with themselves and their team about the competitors’ advantages.”
“buying decisions are often justified by specific product features or a price point. However, these factors are not actually the primary sales drivers: motivation for a purchase usually lies in achieving a competitive advantage, reducing costs, and/or resolving a top pain point.”
Learn how your competitors solve your customers’ problems. This will help you emphasize the advantages of your solution, and you can begin to shape your own product to meet the needs of the US market.
Sometimes a company can have hundreds of competitors and substitute products. More often a small number (3–8) of key products/companies dominate the niche you are focusing on. While you can treat hundreds of competitors as a class or category, you must have a deep understanding of the key products and companies.
Use the template below to document a detailed comparison with your competitors. Remember that this is a continuously evolving document as your competition is changing all the time. It is recommended to review this every few months.
Step 3: Ideal Customers Profiles (ICPs)
Who are your ideal customers?
The Ideal Customer Profile (ICP) is not your Total Addressable Market or your Total Available Market. These are estimates of your market size — the total of all potential customers.
ICP is not your “target customer,” which might be any company that would buy your product or service.
The ICP describes your most valuable customers and the prospects that are most likely to buy. It is a composite description of an organization (company, government agency, or non-profit) that derives particular value from your offering, and provides exceptional value to you in return.
A lot of founders are afraid to narrow down and focus on one ICP because of Fear of Missing Out (FOMO) among other customers. But in reality, if you don’t focus then you end up trying to sell everything to everyone.
Your marketing and sales become vague and it becomes difficult for any customer to see how your offering applies to their problem. In the end, you don’t connect with anybody including your ideal customers.
Understand that the goal of creating your ICP is not about determining the only type of customer you ever focus on, it’s about focusing on your ideal customer at a particular time, stage, and situation of your company and product.
Later you will use this information to construct your data acquisition, outreach strategy, buyer personas, and messaging and fill your sales pipeline with great leads.
Below is a step-by-step approach to defining ICPs
Identify and list your customer segments by analyzing your customer profile mapping across the existing customer base. If there are additional potential customer segments not in your current customer base, add them.
Dive deeper! Do additional research to further understand who the customer is, what pain points they face, and how your product solves their pain points. Understand what differentiates you from competitors solving their needs.
Make an ICP for each segment of customers using the following template:
Now in order to prioritize your ICPs, follow those three steps:
Define one or more specific goals you wish to achieve at this stage. This can also be the value you need most from your customers. For example, goals can be — X number of new customers with Y average annual revenue, X number of customer advocates, etc.
Define a time frame to achieve this goal. Three to six months is generally a good time frame to start with, but it really depends. This is where you consider parameters that can affect your goal like your typical sales cycle, number of touchpoints, etc. from customer profile mapping.
Prioritize these ICPs based on the goal and time frame you decided in steps 1 and 2. Revise goal, timeframe, and ICPs if needed until you have a clear fit between one or more ICPs with goals and timeframe.
Use the following template to perform this exercise.
Remember that these are hypotheses that have to be edited as you learn more about your customer segments.
These ICPs will be your first hypotheses about the ICPs in the US market. However, just as in your current market(s), you should prioritize them to meet the goal and timeline of Market Outreach. In order to do so, repeat the 3 step approach to prioritization from above to choose ICPs that are going to be the best fit for Market Outreach.
Who should perform this activity: Founder | Head of Sales | Marketing Manager
Step 4: Buyer Personas for ICPs in the USA
Decision-makers are humans, what do you know about them?
Your ICPs describe potential customer companies but never forget that the decision-makers at those companies are individuals with their own needs, ideas, and constraints.
You need a deep understanding of those drivers to guide your content creation, sales channels, product features, sales techniques, and nearly every other aspect of your sales, marketing, and retention.
Buyer personas give you this understanding. They are fictional composites of the people who actually have the power to pull the trigger on a purchasing decision.
Ideally, you will make a separate buyer persona for each type of decision-maker in your markets. Think about why those people bought your product? What features do they use the most? What problems do you solve for each of them?
Building on your ICPs, collect the following information:
Create a list containing titles of the decision-makers from your past and existing customers that match each of your ICPs.
Find 5–10 companies in that USA that are most closely one of the ICPs in your current market(s).
Find names and profiles of titles from step 1 in each company from step 2.
Who should perform this activity: Founder | Head of Sales | Marketing Manager
Step 5: Pricing
How much your customers are willing to pay for your solution?
The fastest and most effective way for a company to realize its maximum profit is to get its pricing right. Setting the right price, however, is a process and can be difficult when a company is first (or one of the first) to market
All too often, companies charge well below or much higher than the real value of their product or service. This exercise will help you evade the pricing problem by helping you develop a pricing hypothesis that can be tested against the US market.
Let’s start with your current pricing. Based on the pricing model and the number of customers, define your ideal average deal size. Now, take the average deal size that you defined while creating the Customer Profile Map and compare it to your ideal average deal size according to your pricing
If they are close to each other, then it means your pricing is working and you got it right. You can just take it and test it in the USA market.
If your average deal size based on your pricing model is much higher than your average deal size, then your pricing is too high and you are giving a lot of discounts.
If your average deal size is higher than your average deal size based on the pricing model, it means that your pricing model is not adequate for what you offer and you customize it for different customers.
In both of those scenarios, we recommend the following exercise in order to decide on the pricing model that you are going to test in the US.
1. What are your current business goals?
Consider the goal you created while discovering your ICPs in the last steps. Is this still compatible with your ICPs and buyer personas for the US market? If yes, keep this goal in mind while defining the pricing strategy. However, if you think it is not compatible, step back to identify the mismatch until these three pieces fit together: your current goal, ICP for the US, and buyer personas.
2. Analyze the market and the competition’s pricing.
Once you are clear about your strategy, you can move on to address external factors such as competition and substitute products. Simply spend some time listing and analyzing the packages and pricing of your competitors.
While focusing on your competitors, do not forget to check substitute products that can solve the customer’s problem in a very different way. The biggest competitor for a business class seat in one airline is not another airline but a good web-conferencing system.
3. Analyze your target audience.
Steps 1 and 2 give you a direction but always define your pricing based on the value you provide to your customer. This is called Value-based pricing. What does your product help your customers with? Does it save time/money? Does it help them make more money? Does it help to reduce risk? Does it help them to comply with regulations?
Always try to put a dollar amount for the value a customer gets by using your product. Value-based pricing has two main benefits. First, you can potentially start with a higher price point if you can show a higher value add and willingness to pay among your customers. Second, you can raise your prices as you find out more about your customers and add features to your product providing more value.
4. Define pricing options and packages
Most companies have more than one type of customer or target market segment. In such cases, we advise you to break down your market segments into 3–5 ICPs. Find out as much qualitative and quantitative information as you can for each ICP with extensive research.
Based on your research and current customers, list all features and the main value proposition each ICP is looking for. In the end convert this into dollar amounts both in terms of the value proposition, customer acquisition cost (CAC) and lifetime value (LTV). This will not only define your packages and pricing for each ICP but also might tell you that some ICPs are not worth targeting.
Now take your current pricing model and compare it with what you have created in this exercise. If they are very different, we recommend testing the new pricing in the US market. If they are not, that means that your pricing is right and you need to dig deep to answer the question of why you give so many discounts or you customize pricing.
Who should perform this activity: Founder | Head of Sale
Step 6: Market Messaging, UVP, and USP
What do you say to your prospects to get them excited about your solution?
Great customer experience with your company starts with the right messaging. It means focusing on what your customers need as opposed to what you offer.
Customers do not care nearly as much about features and what technology you use to build/deliver your product; they need to know at a high level if you and your product or service can solve their problem(s) and what benefits it can bring.
They need to know your Unique Value Proposition (UVP). The goal here is to design the first messaging for ICPs and buyer personas for each channel that you later plan to use in Market Outreach.
What Is Market Messaging?
The right market messaging allows you to convert new customers, as well as reinforce to your existing customers that they’ve made the right choices.
Effective market messaging is based on understanding who your customer is, how your product or service benefits them, and how your company delivers value.
To deliver the right market messaging, you need to understand your customers, especially their pain points, how they address them without your solution, and how your product can change it.
Crucial at this point is to interview your current customers to discover how your product impacted them — for example, “Your tool helped us to speed up the sales process by 20%”. Any data that you can get from your customers would help you to create more powerful messaging, especially unique selling points.
As you probably have no or few customers in the USA, your first messaging will be based on your current customers’ needs and so may not resonate with your American customers. But that’s ok; it’s a good starting point. However, you should set up an A/B testing process and keep adjusting your messaging accordingly until you start achieving ratios in line with industry standards.
If you are not sure about specific pain points, how they address them etc. you should conduct a more in-depth interview with your current customers.
But remember, your US customers may see value somewhere else, or they may address the pain points differently, so do not assume that it is going to be 100% accurate. However, as we stated above it’s a good starting point if you don’t have anything else.
Creating a Unique Value Proposition (UVP) and Unique Selling Proposition (USP).
There’s an old story told by sales professionals in the US. A man who made mattresses was having trouble selling them.
A friend asked him, “What are you selling?” The mattress maker replied, “Why, mattresses of course.” His friend shook his head and said, “No, mattresses are what you make. What you sell is a good night’s sleep.”
Think of USP as what your product does, and UVP as what it does for someone. A quarter-inch drill bit drills quarter-inch holes — that’s USP. It allows me to make my wife happy by hanging a picture on the wall — that’s UVP.
Your UVP is what you do for your customer. A unique value proposition is a clear statement of the tangible results a customer gets from using your products or services.
For each of your ideal customer profiles (ICP), you’ll develop a UVP that clarifies what value your product delivers, and how that differs from your competition.
Whole Foods: The groceries may cost a lot, but the value of being healthy outweighs the cost.
Unbounce: Web-Page A/B Testing Without Tech Headaches.
Zappos.com: The world’s largest shoe store delivered to your door with free shipping both ways.
The unique selling proposition (USP) is what your product does and how it is different from your competitor’s products. The selling proposition is a promise of quality to be delivered and a belief from the customer that value will be experienced. That’s how you create competitive differentiation.
The graph below presents 8 questions that help you define your USP. Answer them all and you will be able to create your USP.
Examples of USP include:
Specialization: We specialize in working with financial institutions.
Guarantee: We guarantee service in 4 hours or your money back.
Methodology: We use a unique tool called SureFire! to analyze your critical needs
Now it’s time to create specific messaging for buyer personas for each ICP.
Messaging is not only about making email copies or phone scripts out of your USP and UVP. It’s also about providing the right information in the right format based on your prospect’s stage in the customer journey.
For example, if the prospect is unaware of their own problem, explaining your product’s user-friendliness will do little to convince him/her. You can put together the content that is needed for each stage of the customer journey and each channel in English according to UVP and USP using the template below:
By now we hope you, as a CEO, have answered the following questions in order to decide your company’s readiness to expand into the US market:
Did you define your value proposition i.e. specific customer pain points that your product solves?
Did you define your unique selling points?
Do you have a clear understanding of customers in your home country?
Do you have a clear understanding of customers outside your home country, if any?
Did you map your marketing and sales process along with their effect on past sales?
Do you have a full understanding of your customer journey?
Do you have a competitive analysis for the US market?
Do you have your ICP and buyer personas ready for the US market?
Do you have your first version of your messaging and content ready for the US market in English?
Do you understand your internal assets and weaknesses?
If the answer is yes to all 10 questions, then it means that you are ready for the next phase — Market Outreach.
This part is hard to generalize as factors like the type of target market, pricing strategy, and others play a vital role in deciding the details and process of market outreach. You can start by gathering qualitative and quantitative feedback from your potential customers in the US to assess your product-market fit in this market.
Feedback — positive or negative — will help you to better understand how your customers interact with and feel about, your product or service. Their honesty will guide you to make smart adjustments to your product and increase your chances of success in the US market.
While working with international startups, we noticed a number of common mistakes when entering the US market. Avoid them if you want to be successful in the US market.
Selling to US customers from the home country by a person who has little or no knowledge about the US market.
Inappropriate investment — Investing too much money or not investing at all.
Setting expectations too high while underestimating competition and differences in market needs.
Failing to involve the CEO in acquiring the first US customers.
Hiring a US representative with the wrong set of skills.
Failing to listen to US customers.
Reacting too slowly to customer feedback.
Lacking knowledge about competitors.
Applying the sales and marketing strategies from your existing markets to the US market.
Underestimating the fast pace of the US market.
This content is for subscribers only
Sign up now to read the content and get access to the full library of content for subscribers only.