Global expansion - make or break?

There is more talk than ever before about ‘international’ within the creative community. But let’s be clear – although we all join in, much of this is just talk. It’s spurred by what’s going on in the wider world and fuelled by the media. For most creative businesses looking to grow international expansion is still important. UK agencies have been developing internationally for years - some successfully, many more unsuccessfully. It’s always been hard and it’s not any more difficult now. But very rewarding if you can get it right.

CLEAR THINKING

Like many other important business decisions, rigorous planning is vital. You’ll need good local market knowledge to interpret the potential opportunities and then you’ll need a pretty brutal assessment of your own capabilities. This matching is fundamental to get to the right strategy for your specific business. What is right for your competitor isn’t necessarily right for you.

There are many elements to consider when looking at specific international markets. These include industry mix and client location, culture and expectations, competition, buying processes, pricing and language. The UK has a very different history in terms of creative services and the way clients and their customers go about things can be surprising. Assume nothing unless you know.

Even when looking at the closest international markets in Europe many businesses have got it wrong. City locations in Germany have been selected inappropriately, with Belgium often missed out, the Nordic region has been considered as too small, languages have been used incorrectly in many areas, and people have been hesitant of eastern Europe in spite of the good opportunities.

But even with good market assessment, the biggest challenges are often within the business. Do you have the required resources, attitude and determination? Have you properly assessed your team’s motivation, their ability to travel, their knowledge and skill sets, the available funding, and the flexibility to adapt and continue when things don’t go to plan (as is more likely than not)?

Any plan should clearly define your agency’s ambition. What you are trying to achieve in the short and medium term. A plan to provide some additional ‘top-up’ revenue to support the core business should be very different from a plan to deliver substantial revenues. And setting up an international business on the ground requires a very different approach to pursuing international export opportunities.

TAKING ON THE US

It’s always exciting to think about and plan doing business in the States. We’re all familiar with the places and the culture. And we all talk the same language. Except that we don’t in business. The US market is very attractive with the potential for great rewards – but these are matched by the size of the challenge. There’s no doubt that the US has proved to be one of the most difficult markets for UK businesses to crack. Almost, without exception, it has taken longer and required much deeper pockets.

There are, of course, logistical challenges around time differences and travel, time and costs. It’s easy to assess these issues thinking between the UK and US - but often the even bigger challenge is working within the US. Clients aren’t conveniently located in the centre of a few major cities – and operating in the US market imposes a whole series of new challenges to the ones agencies are used to in the UK.

Size, history and culture have created some significant differences between the US and UK. One simple example is that clients have different titles and often very different responsibilities. Clients’ expectations can be very different too – in some cases they are far in advance of the UK and in others a long way behind.

Overcoming these differences requires new or different skills. And it can take time (that you may not have) to get to the required position. Chemistry and relationships have to adapt to presentations and meetings over the phone or video, which makes it much tougher to compete with local businesses. Face-to-face is still seen as a critical element to building strong, sustainable relationships – but you’ll need to engage with many more people, with different jobs in diverse locations.

Unexpectedly, the legal system and contractual matters are very different. These will affect your dealings with clients, employees and partners. And you’ll be surprised by the US views on honesty and integrity.

US clients are very canny in the way they deal with agencies. Don’t be lulled into a false sense of security by early successes. They’re very open to new faces and new ideas – and will readily ‘try you out’ with small pieces of work. But although the door may appear to be open, moving on from this initial trial is tough. You need to be confident your investment will pay off.

To sum it up – the US is not the place for the squeamish or for those who just want to try it and see (although a high degree of flexibility is helpful). With the benefit of hindsight, many UK agencies working the US might decide not to go there at all – or at least to adopt a different approach second time round.

A SHARPER FOCUS

Wherever in the world you are looking at opportunities, there’s great potential to be tapped into with the right approach. But you’ll need a well-developed plan, a high level of commitment, resilience and a certain a sense of humour to take you through the highs and inevitable lows.

Even if the recent changes in Europe and the US won’t have a significant impact – if all the talk and hype leads to deeper thinking and better strategies, UK creative businesses are likely to be even more successful in the future.