Reasons why companies fail to grow in Europe
You’re probably thinking COVID-19, that’s why companies fail to grow in Europe!
But that’s not it. As we do business development throughout Europe, we meet many companies and more important: their management. What binds them is their wish to grow their business, their willingness to invest in growth and their understanding that they can’t do it without support.
Although in a very Dutch way (in other words bluntly honest) we explain what needs to be done to grow your business in Europe, we still encounter a lot of challenges in the implementation of our experience within clients.
That’s why we decided to publish reasons why companies fail to grow in Europe. Assuming that you don’t have billions of euro’s to spend on marketing then here are some critical success factors for your European growth.
Europe has many countries. Some of these countries cover a quite big part of Europe and some of the European languages spoken are used in neighboring countries as well. For example: The German language is used in Germany, Austria and Liechtenstein. But also, Switzerland, Luxembourg and Belgium use German as one of their official languages. Next to that parts of Denmark and Italy also speak German. The same arguments can be made for Italian and French.
In the past (before globalization took off) companies could suffice by communicating in their native language and reach all their potential clients. Here now lies the problem. We see many SME’s with potential to grow outside their language domain who just need to communicate in another language. Of course, Europe has 24 languages and not every country is a potential target. The easiest way to communicate outside your language domain is by using English. Still many SME’s use their native language on LinkedIn, Facebook etcetera. Guess what, most people only read messages in their native language and if any, their second choice is English.
Our advice: Start communicating in English on LinkedIn, Facebook and all other social media and add English as a alternative language to your website. This way you’ll reach more prospects.
Europe has many cultural differences. Even more than languages. Understanding and working with these cultural differences is not easy. However, if you want to do business in a country, you have to play by that nation’s rules.
One of our clients based in the South of Europe was contacted by a global leader in luxury goods and fashion. They were asked if they could help setup a global e-business. The CxO committee of the luxury goods and fashion company had decided to only invite trusted partners to participate in the process. Their definition of trusted partner was: “We already have a proven relationship with the supplier at the C-level.“
Our client had all capabilities in terms of IT, however they needed support with logistics and fulfillment, so NextSales was asked to help find a competent subcontractor. We reached out to some leaders in the field based in the Benelux. We explained the process and the requirements of the project. Even then, after the first conversations between our client and 1 of the logistics companies, the huge gap between both cultures became clear:
- The sales process of this logistics company assumed that every deal is competitive and the chances of winning or losing needed to be weighted in a deal-review
- Our client was in the process of strengthening the relationship with the luxury goods and fashion company through meetings Southern European style. As a result, there was no competition left
- In the South of Europe these type of meetings have involvement of the C-level
- This logistics company was represented by a sales rep. Their director just joined for an hour
- In the South of Europe you have a great dinner with your clients
- This logistics company hosted a quick sandwich during the visit of the CIO of the luxury goods and fashion company to the Benelux
Needless to say, that our client who was awarded the contract with the luxury goods and fashion company didn’t continue with this logistics company and contracted one of the other candidates.
Our advice: When in Rome do as the Romans (Adjust your behavior and expectations to that of your client).
We as no other understand that all sales people are under pressure to perform. Every sales person knows the stories of “low hanging fruit” and “bluebirds”. These are great real-life stories, but certainly in Europe most of them are not reflecting reality. Building trust and relationship takes time and Europeans (specifically those of the South) have a different approach in taking meetings with sales reps than British or American people.
A European who gets contacted by a sales rep will be reluctant to have a meeting because this can be interpreted as “I will buy from you”. Whereas a Brit or American thinks “It never hurts to hear what this sales rep has to say” (taking the meeting is no commitment to buy).
This is just one factor that makes doing business in Europe a longer process than in some other parts of the world. Again, you have to demonstrate the appropriate amount of patience.
A leading IT services firm implemented a HR-policy to every six months fire the lowest selling sales rep (fyi: lowest could still be 2 times their target). The idea behind this policy was that it would scare the hell out of the sales reps and would push them to deliver at their best.
This policy resulted in firing a regional sales manager. However, after a few months’ clients started to call for the fired sales rep. They explained that they had no business for him in the past months, but now they had, and they wanted to award his perseverance. Since the sales rep had left, the client commitment was also gone, and it became level playing field between suppliers. In other words: instead of cashing in on the sales investment the investment had been whipped out by lack of patience.
Our advice: If you can’t afford the time don’t start. If you really need business that badly, you probably need other management.
How to grow your business in Europe?
We offer 1 hour of free consulting on how to grow your business in Europe. If you are considering to grow your business in Europe, we will give you best practices and direct you to relevant resources. You are free to discuss your own agenda!