Business expansion into new markets is more than allowing your site to accept payments. We covered that in part one. To sum it up, you can add Dynamic Currency Conversion (DDC), open a Multi-Currency Merchant Account, or incorporate in the region.
Now that you’ve prepped your store, how can you be sure of customer interest? And if customers in that region are already interested, how can you maximize that revenue? Here, in part two, we’ll cover some marketing strategies and growth strategies that maximize revenue when expanding your business into a new market.
Determining Your Readiness for Market Expansion
As we mentioned in part one, expansion isn’t right for every business. Some businesses aren’t yet ready for it and others might be perfectly situated in their current market. So, here’s how you can tell if your business is ready for expansion.
You receive non-local traffic.
A sure-fire way to determine whether your business is ready to expand into a new market is if you are already receiving traffic in that market. If you’ve got the traffic, you know there’s customer interest.
Even if you don’t have traffic yet, expansion might still be a good idea for your business. You can do some market research to see if people are buying products similar to yours or in the same industry as your business. Never go in blind.
You have the resources.
Expanding can be a risk. Your business should have the financial resources to overcome any failed attempts—just in case. If you choose to incorporate in the new region, then you’ll want to be making at least $100k in that region. Incorporation is costly and not the best choice if doing so would eat a significant chunk out of what you’re making.
Even if you don’t choose to incorporate, you should consider the cost of shipping (if you sell a physical item), translating your site, and customer service agents who speak the language of that region. These are just a few examples of what you’ll want to consider when expanding.
You have the capacity to expand.
Expansion takes time and effort. If you’re bogged down with sales, responding to current customers, or general business operations, then maybe it’s best to consider expansion when you’re a little more prepared. This isn’t just about money and funding the expansion, it’s about having the capacity to cater to the new area.
You shouldn’t open up in a new location and ignore the new store. That sets you up to receive a bad reputation and even chargebacks. Instead, make the time or assign someone to take care of this endeavor properly.
Expansion also isn’t typically appropriate for startups and similar types of business unless you know for a fact your products will sell. If you can ensure this, reach your target audience, and have the capacity to expand, then go for it.
Strategies for Maximizing Revenue
As a small business owner, you’ve decided that international expansion is right and your company is ready. Great! Once you get your payment processing situation sorted out, you can focus on how to maximize your revenue.
Do the market research.
See what people are buying, who’s buying it, and how they’re paying. Making your online store available in an area doesn’t mean people are going to flock to it, especially if you’re not selling or promoting the products they’re interested in. Instead, do some market research, build on trends, and have a marketing plan based on market analyses that matches your new business growth goals for the area.
Use social media and content marketing.
Social media platforms are great tools to determine the interest a particular demographic has for your brand. It will help you build some brand awareness, understand what customers respond to best in terms of products and advertising, and you can use it to see what similar successful businesses are doing in the area.
If you’re expanding into a new market and there’s no competition, then social media can build up a community around your brand. You can use it to test what your followers like and cater to the demographic that responds best. And this is a good point: the demographic you sell most to in your local market may not be the same in another market. Don’t make assumptions; do the research and have a business plan/expansion strategy.
Content marketing is a good way to drum up business and excitement as well. Newsletters, blogs, social media posts—these are all good, safe, and inexpensive ways to keep your new customers informed and aware.
Raise the price of the product.
The first two methods are pre-emptive strategies about understanding your customer base, connecting with them, and getting a feel for the landscape. Now we’re at the point of strategizing for maximum revenue by actively changing the price of your existing products in the market.
Price test in different markets. It’s best to start high and decrease the price. As you might imagine, there is usually a more negative reaction when customers see a price hike, and you don’t want to scare off your existing customers at the possibility of gaining a few new ones. Instead, enter the market with higher prices and lower it according to customer reaction. Customers in certain regions are less price-sensitive than those in other regions, so price testing can help you maximize revenue.
In part one we talked about currency accounts and incorporation. These two allow you to price test, DDC doesn’t. And raising your prices doesn’t necessarily mean doubling it. If you sell a new product in the states at 20USD, you could sell the same one in the UK for 20GBP.
Take note that some regions require you to lower your prices, like a few in Europe. You don’t have to operate in those areas if you’re not getting any traffic, but be aware of requirements in the regions you do want to operate in.
Offer the right payment methods.
Buying with a credit card is hugely popular in North America, but that’s not true for every country or economic region. Customers in Germany, for example, prefer to use debit transactions. Some areas might want e-checks, ACH, or some other type of local payment method.
Offer the payment methods that your target customers prefer. They’ll be more willing to make purchases on your site if they can use a mode they’re familiar with.
Test your shopping cart.
Have someone test your shopping cart in the new market. Maybe that means you hire someone, contact family or friends, or use a VPN—whatever it takes, just do it. If your shopping cart isn’t functioning properly, it will deter potential customers from making a purchase. Broken shopping carts make people think your site is attempting to commit some type of fraud and likely will never return to your store. You can avoid this by testing out your cart before making it available to the public.
In the EU, for example, your payment gateway is required to have 3D Secure implemented. This is a process to verify the identity of the customer. Make sure you tidy up the checkout flow so it doesn’t disrupt the customer experience too much. Of course, people in the EU are used to taking this extra step, but you can still make it as pleasant as possible.
Also test out delivery, if you’re delivering a physical product. Find out who makes these deliveries, provide a tracking number, and give an honest estimated arrival date. You’ll also want to figure out customs requirements.
For digital goods, make sure customers can download the files or log in to your site. Some regions have regulations regarding site privacy and accessibility. Read up on this and implement what you have to in order to provide the best experience for your new customers.
Translate your website.
It’s as simple as that. Translate your website into your target market’s language. Customers will appreciate it and you’ll gain a lot more business simply because your site is readable. If it’s a market you’re really interested in, then don’t put up a fight about spending a little to have it translated properly (i.e., not just in Google Translate). Customers want to see that you understand their culture which they’ll respond positively to.
Put Your Marketing Campaigns to Good Use with a Payment Processor Who Can Handle Expansion
Your marketing efforts mean nothing if your shop can’t process the payment. Go back and read our part one, familiarize yourself with the options available, and work with a partner who can guide you through it all.
Pricing, currency conversion, product delivery, shopping cart—it can all lead to chargebacks if you don’t spend some time catering to the customers in that new market. Don’t put your own business needs above the customer’s for the sake of profitability. With proper research, you’ll gain a competitive advantage, increase sales, and have a business model that works.
The team here at DirectPayNet is well-versed in business expansion. Give us a call today and we’ll answer any questions you have as well as set you up with the right payment solution to scale your business.