How does market entry vary between the UK and US?

We thought it would be interesting to talk to Sophie Lechner of Global Commerce Education who is based in the US about challenges which are common to entering either the US or the UK and which are different.

First we started with whether the huge differences in country size mean companies face different challenges.

Although the UK is small, we always say don’t underestimate the size of the opportunity nor the competitive marketplace that you are entering and therefore the complexity of getting it right.  Clients often describe the UK as a great “test” of their brand with a “if it can succeed in the UK, it can succeed anywhere” mentality.

On the other hand Sophie explains that because the population of the US is so large, many foreign companies think “all I need is to get 1% of the market”, and they assume that a tiny market share means minimal effort and investment. But that is not how it works, it’s not a linear correlation. The effort and budget required to get a 1% market share in the US is not a 10th of what it takes toget a 10% share!  The added complexity when thinking of the US market is that it cannot be approached as a single country; it is almost more like the European market in that each State in the US may have its own regulations, taxation, laws, and then also its own culture and business practices. One option to consider to tackle this complexity is to focus on just one local market, perhaps even smaller than a State. Start small, learn, correct, repeat.

On the subject of learning I don’t think we have met a company who has not enjoyed trying to expand into the UK but a typical comment is that they lacked understanding in terms of the right route to market for a particular brand or service.  One thing we can say with some surety is that it never seems to work exactly the same as it does in the company’s home territory and we hear of many who give up because they simply fail to make the right connections in time.  What about from the US perspective, Sophie?

There are many different strategies to enter the US market but most clients only consider a couple of them and thereby miss out on some options that would be less costly, less risky, have a higher chance of success and be faster. For example rather than first hiring a sales person it may be much more effective to enter an alliance with a company that is already in the market with a complementary product. With the partner’s existing client base and trusted sales force your sales can take off much faster.

We are overwhelmingly in agreement on one point which is that companies should start the market entry “journey” earlier, in other words, do more homework.  We both see so many companies underprepared.  And many who have simply not worked out their messaging for the UK. There are loads of networking and event opportunities to hook into here so try and work out before you land which ones are really going to deliver the right results otherwise you will fill your diary but not your pipeline.

In terms of the lack of a language barrier, Sophie points out that the biggest misconception is thinking that because you are from the UK, Australia or even Canada, just because we have a common language and some shared history, the differences won’t be that big. The culture and business practices are vastly different and it may be even more dangerous to make assumptions because the differences may not be immediately apparent.

In terms of US to UK, we see other elements of language and business behaviour trip people up here. Apparent enthusiasm or politeness does not mean people are definitely going to do business with you.  In the UK, we’re just very good at being polite!

Both Sophie and we agree that clients say they wish they had listened more to advice to tap into local knowledge and experience as it can save a lot of time and headaches!

If you are considering the US and UK markets and would like to hear more from Sophie and us, get in touch and enquire when we will next be hosting a joint session in Europe.




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