MARKETING STRATEGY

International Expansion for Software Start-ups: The Confluence of Digital and Partner Channels

ANUPAM DASGUPTA | April 21, 2022

Software start-ups frequently express concern about the next step of their worldwide expansion. Depending upon the size and scope of operations, the mantle for creating and driving the go-to-market strategy is with the CEO himself or the sales/marketing head. There could be some cases wherein the Head of Strategy or COO is entrusted with the responsibility of crafting the strategy and overseeing its execution.

For reasons beyond the obvious, some of the immediate references I have in my mind are Indian software start-ups and SaaS companies, in particular. 2021 was the year when the front runners of the Indian SaaS diaspora registered an unprecedented presence on a global scale. It’s not just 2021, though; let’s say for the past five odd years, expansion into the U.S., the U.K. and Western Europe has been on the wish list (almost without exception) of Indian SaaS CEOs and executive management. There is a thrust on entering these markets at an optimum budget. A compelling and relevant digital presence appears to be the obvious answer. Yes? More on this as we proceed.

Let me extend the problem statement a bit further. Any start-up (in almost any country) would like to see a quick return on their investment, while entering new markets can be really expensive. Do you hire local sales professionals to pound the streets? What kind of investment do you need for this? When can you expect to see a return, given that the sales executive will need time to better understand your product and market?  Would hiring a solo salesperson serve the purpose, or do you need multiple salespersons? What kind of support system does he require to succeed in a new market where the competition includes not only larger global brands but also smaller, local players whom you should not underestimate? Would you be able to provide this support system on a remote basis? What kind of budget do you give the salesperson; does he (or she) get to attend all relevant industry events? If hiring a local salesperson sounds too expensive, can senior management fly out to the target geography once a month for that purpose and retain continuity in terms of being in the market and in front of the prospects, consistently? Or maybe just depute a senior salesperson to the target market? Again, what kind of support system and budget would s(he) need? As you have figured by now, there are too many questions, and not all of them have happy or agreeable answers. Cut to the chase; digital presence is the answer, isn’t it? Why do you need feet on the ground? Digital drives demand, and perhaps some of the demand gets converted into deals on a remote basis. Whatever requires higher “touch” can always be addressed by the “once-a-month” trip, isn’t it? Well, more on this as we proceed.

Now, let’s get to the crux of the matter. Digital presence, powered by digital marketing, is effective. I can vouch for this with my experience over the past decade, being at the apex of marketing for various software product start-ups. Here is the deal, though: good digital marketing can build your digital presence so that people find you when they are researching for the right reasons. A smart “outbound” marketing approach can also make its way into the prospect’s inbox (email/LinkedIn) and even get her attention. Add the latest developments to the mix – things like intent data and buying signals can make your outreach even sharper and more targeted. To cite an example, Google Ads and LinkedIn Ads can certainly bring in high-quality leads for you and serve as enablers to elevate brand awareness and brand recall.

Google Ads and LinkedIn Ads have entirely different dynamics, though, in terms of the spending, deal sizes, and ROI you can expect. But that is another nuance altogether, reserved as a separate topic of discussion altogether. Digital marketing can help you generate quality leads in a new market. But that's not the end game; that's just the top of the funnel, and the finish line is at the bottom of the funnel. There is a lot that happens in between.


This is where an effective partner network comes in. A good digital presence and smart digital marketing put you in front of your prospects. But the prospect has so many options, and even if you are operating in a niche market, your brand is unknown. In a B2B sales cycle, the journey from the top of the funnel to the bottom is very layered and complex.  One of the key accelerators in this pursuit is your brand equity. Building brand awareness in a new market is time-consuming and very expensive if you decide to go the route of building regional business development teams, sponsoring local events, etc. This may not be a viable option for most startups. An appropriate course of action is to establish a network of a few trusted partner organizations that are extremely familiar with your service and can attest to your talents and credibility. Consider the following scenario: a partner with two decades of experience in a certain location introduces you to a prospect who may become a client of theirs. The partner assists you throughout the sales cycle and contributes to the development of trust with the prospective client. The digital outreach continues irrespectively, before and/or after the partner has introduced you to the prospect. Of course, the outreach should not be intrusive or repetitive – rather, it should reinforce the efforts of the partner organization. You absolutely must have a proxy sales team that benefits from a strong local network. Given the business viability of the relationship, the partner would have every motivation to make the agreement work for you.

So, is it as simple as that? Well, not really. In my experience, the whole process of identifying suitable partners and coming to an agreement with them on a mutually beneficial commercial model could be very time-consuming. It’s not just that; you also need to enable your partner (their client-facing teams) with your product knowledge. Once it is accomplished, the proverbial "chicken-and-egg" scenario occurs until the first contract is completed. In other words, until the first deal is closed, partners may be hesitant to exert substantial effort. And unless the best effort is made, the initial deal is unlikely.

A mix of a pervasive digital strategy coupled with an effective partner channel can enable a successful foray into new markets without having to go through the trials and tribulations of hiring a local sales team and building a local presence through cost-intensive events and conferences. To each her/his own, as they say, but probably most SaaS startups would want to consider partner channels as the spearhead for new market entry if they already are not.
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