5 Things European Tech Companies Need to Know to Crack the US Market

Published on Feb 11, 2019 by Diego Pineda | 6 min(s) read time

Thinking about expanding to the US? Perhaps you could learn a thing or two from marathon runners.


A marathon is the big challenge runners dream about. Could they do it? Do they have what it takes? Similarly, entering the race of the US market is a big challenge for growing companies in Europe.


Just as runners should know a few things - and train hard - before taking part in a marathon, there are 5 things European tech companies need to know before attempting to crack the US market.



Runners choose a marathon wisely…


#1 - Understand US Business Culture



Marathons take place in different environments and elevations, some through quiet country roads, others through crowd-filled city streets. Runners plan accordingly and train for the conditions they’ll find at the location of the race.

 

Outsourced Sales Services understand US culture

 

So should you. Planning for the cultural differences ahead is essential.


American culture is very different to European cultures, and even from one state to another, consumer behavior and expectations vary a lot - something you should consider depending on where in the country you are going to establish your offices.


One peculiar example of the cultural differences is small talk. While Europeans often engage less in small talk (polite conversation about unimportant topics such as the weather or sports), it’s an ingrained daily habit in American life.


Now, if you were to engage in small talk with your US business partners, remember that Americans have an acute sense for political correctness, so things like religion, ethnicity or politics can be sensitive topics.


Other cultural differences you should be aware of are advertising practices, socializing rules and patriotism.


Europe is heterogeneous,” says London-based Mike Baker, Vice President Sales EMEA at Cornerstone. “About 80% of the process and approach will be the same between Europe and the US, but understanding and addressing the 20% difference is what makes a difference between success and failure. You have to think Glocal.



First-time marathoners should be aware of their limits…


#2 - Understand US Tax and Labor Laws



Running the 26.2 miles of a marathon is quite different than a jog around the neighborhood, and so is the risk of an injury for the runner. It’s the same here - especially regarding taxes and legal issues.


For example, when hiring, be aware that in the US it’s illegal to ask about age or marital status and that one key factor employees look for are bonuses. Overall, understand that US employees may have different expectations and behaviors.

 

Outsource Sales Teams help with tax and labor laws

 

Workers in the US tend to overwork themselves more than in Europe,” says Buzz Carter, Head of Outreach at Bulldog Digital Media in the UK. “In Europe, most workers get a decent amount of paid leave, whereas in the US paid leave is a bit of a rarity. This has reaching implications, like Europeans being more relaxed with time management and taking time for themselves, whereas in the US people seem to be more stressed about being seen as a 'slacker' for not burning themselves out.”


Corporate taxes in the United States are imposed by the federal government but also at the state and local levels in some occasions. Just as a runner should consult with her physician before starting a training program, you should consult with a US legal advisor during the planning phase and make sure you’re in good condition to enter the race.



Staying motivated while training for a marathon requires help…


#3 - Know How to Quickly Set Up a Sales Team



Training for a marathon is hard and exhausting work, and many runners choose to run with a group or a partner to stay accountable and on track with their training goals. Having expert runners alongside during training and the race is an amazing help.


One key factor you need to really crack the US market is setting up a sales team quickly, so you can start generating profits as soon as possible. But as a newcomer, that could be frightening and risky.


What if you could have a dedicated sales team - the expert runners - that know the US market and has experience working with European companies? There are partners and tools out there that you can utilize to gain a huge jump start into the market.


In fact, Matt Robson’s biggest piece of advice on scaling to the US, Head of Sales and Marketing at Welcome Gate is to ‘’find a good partner who comes recommended.’’


Establishing an office abroad is like starting a company from scratch - you will burn a lot of cash at the beginning. European companies often underestimate how much funding they need to enter the US market. Even if you have a budget of $100,000, it wouldn’t be enough for renting an office and hiring a sales person for the first year. Salaries in the US can be much higher than in Europe.


Consider if you want to go for it alone, or who could you partner with?



The professionals are easy to spot…


#4 - Clearly Show Your Value


Although marathons are for people of all abilities, the professionals at the front sprint away from the rest.

 

Outsource Your Sales to get ahead

 

Whilst in any part of the world relationships are key and you need to be able to clearly show your value, Adam Kay, VP of sales at Paddle believes that in the States, ‘‘brand recognition, customer references and proving yourself to be a strategic partner are much bigger focuses for buyers in the US.’’


Ensure that if you’re going to reach the US market, you have the case studies, references and brand recognition to really stand out. This can be built up with time and partnerships, but you can also really get ahead of the rest by ensuring your website, marketing, success stories and design are on point before going for the big sprint.



Runners stay hydrated…


#5 - Understand the Importance of Customer Service



The body of a runner demands more water than a non-runner and needs to be constantly hydrated. Something similar happens with customer demands in the United States.


Chris Wood, Sales Director at Pinacl-GDA, says that, in his experience, in the US “the end user is much more involved with specification and technology, and often buying direct from the manufacturer or distributor.


While you may have experience selling products to European clients, the story is different in America. The US market is driven by price, volume and service, which make customers easy to sway, so once you have clients, it’s vital to take care of them.


It's said to cost 5 times more to bring in new business than to retain existing clients. Thus, customer service is key.


Given the differences in culture and expectations of US customers compared to Europeans, you may want to consider setting up an outsourced team of customer service reps that understand the market well.


So, there you go. These are five important things you need to know to crack the US market.



However...



We’ve also got to factor in that we’re comparing Europe and the United States. These are both huge regions, with big cultural differences in themselves.


Dan Harris, Sales Director at Cazena states, ‘’There isn't really a European culture. We're all separate countries with different histories and languages that happen to be clustered together on the same continent.’’ Similarly, selling to tech companies in San Francisco is very different to selling to manufacturers in Detroit, so always be aware of regional differences.


The Rewards Are Big, but Homework is a Must



Certainly, there are many advantages to expanding your business to the US, such as the greater availability of funding for tech companies, a huge new population of buyers and the culture of innovation that permeates Silicon Valley.


On the other hand, although the United States is known as the land of opportunity, you must be cautious. Many marathon runners don’t prepare enough and end up abandoning the race. Others get injured or even faint. Before coming to the US, you should have an exit plan in case your objectives are not reached.


It’s essential you do your homework and undertake detailed research before expanding your tech company into the US market.


Above all, get support, be it in the form of advisors or with strategic partnerships.


Use your current links with B2B partners who have experience with the US, like an International Manufacturer or Distributor,” says Wood. “Get out there and see their US operation, understand how it differs from Europe. If you are a valued customer of theirs, they will help you.”


Are you ready to run this marathon?

 

 

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Topics: sales, Other