International success factors

Jan. 1, 2020
Often I am asked about what factors make some US aftermarket companies more successful than others selling their products globally. There are three important traits that internationally successful companies share — let’s explore these suc

Often I am asked about what factors make some US aftermarket companies more successful than others selling their products globally. There are three important traits that internationally successful companies share — let’s explore these success factors.

Factor No. 1: Successful companies go where the cars and people are located. Did you ever wonder how the world population is spread? Here is the break down:
• Europe 11%
• North America 5%
• Asia/Middle East 60.6%
• South America 8.6%
• Africa 14.1%
• Oceania 0.7%
(Australia, New Zealand)

The easiest U.S. aftermarket items to sell to the above markets are chemicals, tools and accessories. Why? Because they are universal, unlike hard parts that tend to be designed for a particular car, chassis or engine.

Factor No. 2: Successful companies understand success must be led from the top. In 2009, I traveled from Hong Kong to the US seven times to visit more than 20 US companies with under $50 million in sales to explore taking them global. Unfortunately, many of these companies were extremely challenging to help. What all these companies had in common was that international expansion was not a critical focus of the owner or the CEO. In these companies, they still saw their business as being US based, but “heard from friends that there was money to be made in China, Europe or the Middle East.”

Conversely I have worked with two companies that grew amazing international businesses — Loctite and Meguiar’s. The common international success ingredient in both these companies was that the CEO made international his job. At Loctite, Ken Butterworth and David Freeman were huge zealots of international expansion. At Meguiar’s, Barry Meguiar made going global his focus.

PAGE 2

These CEOs gave international initiatives the company’s best resources. They showed the entire company that they were keenly interested in growth outside the US, and that smart managers within the organization should support international and have the same focus if they wanted to move ahead in their careers. Butterworth, Freeman and Meguiar all understood the need for investment to grow an international business and were willing to invest for five years before expecting a return. In both companies, the returns came as planned and were equivalent, even superior, to those of the US business. They also realized the need to plan and create multi-year plans, which were monitored monthly, reviewed quarterly and updated annually with presentations to the management team in HQ or international markets. These CEOs attended all major reviews. 

Sadly, many of the US firms I visited in 2009 do not look like they will ever earn international success on the magnitude of Loctite or Meguiar’s because they see their US business as their primary business, while export business is considered “gravy.” They see their future in the US market. They said they "don’t like the food or international travel." If the owner or CEO says this, guess what? No one in the company will spend any time helping the company expand internationally. In one company with huge potential overseas, the owner gave international responsibility to his difficult brother to literally get him out of country because domestic managers were tired of him messing with the US business!

We can expect business failure from those companies that have no 10-year international plan, or even an international distribution policy. Some firms even accept very small orders from international accounts they had never seen or had any understanding of. These companies also have a CEO or owner is not focused on international expansion and has delegated responsibility for international to customer service or a US sales manager. They allocate talent poorly; I have seen many a non-sales and marketing person put in charge in the early days of an international business. We worked with packaging engineers and manufacturing guys given the responsibility for growing international sales who missed so much of their potential opportunity because of their own skill set. US firms going global need a strong sales and marketing professionals. Lastly, they are too slow to respond to customers. I can tell you that in Asia especially, customers demand a 24-hour response. They get it from the good Asian suppliers. 

Be a Ken Butterworth or Barry Meguiar. Lead your company from the top into global markets! 

Factor No. 3: Successful companies know how to find and retain the best international distributors.

We are frequently asked where and how to find great international distributors. First determine in which countries you want to focus. Virtually no one has the global reach and time and money resources to launch in all markets at once. Consider segmenting your prospective international markets into three segments: small, medium and large.

You will need to focus on those markets with the biggest opportunities first. Once you get them up and running, go for the mid-sized opportunities. Later you can fill in the gaps, going for the smaller opportunities. As smaller opportunities arise, you can always choose to trade opportunistically without devoting key resources allocated to larger opportunities.

So who is the right kind of international distributor for your products? To get an idea, first examine the top 20 percent of distributors in the US (or your most successful international market) that bring you 80 percent of your sales. Profile them so you can clone them. Figure how how they sell; who they sell; how they feel about your product or brand; if they share any special education or background (e.g. are they mechanical engineers or technicians by training?); and what common personality traits they possess.

PAGE 3

Create a plan or vision of exactly what you are trying to build internationally. What products do you plan to establish first? Very specifically lay out the tools and resources you have or will need to build the brand — catalogs, product lines, advertising, web strategy, sales promotions, US brand share/data, etc. Find a metric you can use, such as consumer spending, population, dollars per car, gross domestic product growth, etc., to benchmark your opportunity. Build PowerPoint presentations to entice/excite potential international distributors.

Now it’s time to find excellent international distributors. We have found our very best international distributors in the following ways:
Trade shows: Actively work in your brand’s booth at industry trade shows in the US (APPEX), France (Equip Auto) and Germany (Automechanika). Stay out of the “USA Pavilion;” it is the kiss of death. Build the best booth you can afford. The effort you put in will show and impress prospects. Post a professionally prepared sign listing the specific countries in which you are looking for distribution.

Other companies: Determine the other US companies in your industry that are doing international well. Get to know their "road warriors" who travel international markets. Become their friends — usually they are great people. I have found superb partners in Latin America and Russia through my friends who traveled those areas selling non-competitive products.

Industry associations: Groups like the Automotive Aftermarket Industry Association’s Overseas Automotive Council can be great ways to meet international distributors. Many US associations have relationships with their European, Latin American, Middle Eastern and Asian counterparts. Some organize overseas visits often in conjunction with US government agencies.

The US Commercial Service can be a great resource. Each embassy has commercial service specialists, some focused on certain industries or distribution channels. We have used their "Gold Key" service where they will organize one or two days of visits to importers/distributors specialized in your industry, usually after a briefing at the embassy.

Email and fax inquiries from international distributors who have either visited your booth at an industry show, or checked out your website are a great source for potential distributors. You should design a system to respond to these inquiries. Send them a questionnaire so you can find out more about the nature of their business, years in business, number of salespeople, number and types of outlets serviced and other international lines they import and sell, and in what volume.

Websites: Check out the websites of leading companies who sell quality products in your industry. Who represents and sells these lines in international markets? These distributors could be great prospects for your product line.

From all these sources, you should be able to put together effective prospecting trips where you can visit four to ten prospects in each key country. Speed is of the essence. Once you have four or more prospects in your big opportunity markets, buy a plane ticket and go to see them on the ground in their market.

Plan on introducing your company and the international opportunity for your product. "Dollarize" the opportunity if possible and "show them the money." Demonstrate how your products work (if possible with end users present so the distributor can see their positive reaction and eagerness to purchase your product). Find out as much as possible about their company, culture, passions, likes and dislikes. Have them take you to the market and see how well they understand the outlets, how successful they are selling to those outlets, and how well like/respected they are. Do they see opportunities with the same enthusiasm that you do? Spend some "away from business" time perhaps eating with your prospects to determine if they are the type of people with whom you are excited to enter into a long-term relationship.

Be tenacious and enthusiastic! Invest the time and money to visit key international markets. Remember 95 percent of the world’s population is outside the US. Now is the time to rebuild the US economy by taking advantage of the weak dollar, and expand your business globally!