Each week, we seek out expert advice to help a small or medium-sized firm overcome a key issue.
Chris Skura knows that tapping into the auto industry in Japan could drive tens of millions of dollars in revenue for his company. He also understands that adopting the wrong strategy or hiring the wrong people in his pursuit of an Asian market could be a costly mistake.
So far, the software entrepreneur has relied on partnerships with global corporations that have offices in Asia to introduce the product made by his company, Skura Corp., which is based in Oakville, Ont.
His software platform collects, organizes and disseminates sales presentations. It would allow auto dealers, for instance, to load flashy presentations onto an iPad or similar tablet device. Dealers can then display any car’s features to showroom customers, as well as calculate pricing options, view available colours and schedule delivery.
The business has 50-plus employees in more than 20 countries. It also has 36,000 users who pay $36 a month for the software licence. Mr. Skura predicts his company could immediately exceed $200-million in sales, or a 20-fold increase, if its software were adopted by automobile dealers in Asia.
But Mr. Skura has heard a few too many stories of business ventures going awry when Western enterprises rush into Asia without an understanding of who they’re dealing with or what clients want.
Thus far, large pharmaceutical clients have managed to integrate the Skura software corporation-wide, including in China. But finding an automobile partner has proven difficult.
If Mr. Skura can’t find a big auto partner, he will have to aim at more regional and local customers, and that complicates things. “There’s a lot of hand holding, a lot of babysitting as we train clients on how to get the most out of [our software].”
So far, Mr. Skura has not found dependable local sales agents who can sell the software to automobile dealers in Japan, China, South Korea and elsewhere, and also provide hands-on technical support. Skura has considered acquiring a sales company in the region, licensing its product to one or more companies in Asia, deploying an employee from Toronto to start a sales team on the continent, or operating remotely from Canada.
All of the options have pros and cons. “It’s not just a presence to sell, but a creative partnership and an agreement on how to make these things function that is key to making it work,” Mr. Skura says.
“The entry-to-Asia problem is a big one for us. There are a lot of barriers, but the upside is immense,” he says.
THE CHALLENGE: How can Skura attract local car dealers in Asia to its sales software?
THE EXPERTS WEIGH IN
Amit Prakash, head of wealth management products for Asia, Global Asset Management, Bank of Montreal, Hong Kong
Firms are well served to remember that there is no Asia – they sell their products in Japan, Korea, Taiwan, China, etc., but not in a homogeneous entity called Asia.
Across the continent of almost 50 countries there is a multitude of languages, regulations, political structures, buying behaviours and levels of economic development. Most successful firms have a clear idea about their target client segments in a limited number of countries as they start to develop their market in the region.
The sales models that work well in North America do not always translate very well in Asia as the car distribution models are quite different. It’s easier to make a decision on who to hire as a local agent if you have picked up some detailed knowledge of the market yourself.
Jonathan Ouellet, chief technology officer, Jidoka Software Inc., Toronto
Jidoka means “intelligent automation” or “automation with the human touch” in Japanese. Based on six years working on technology sales, my recommendation for entering this market would be to find existing vendors who sell marketing automation software in Japan and leverage their local experience and network to sell on their behalf on a revenue-share basis.
This incentive will bring sales partners on board more readily and give Skura the opportunity to forge ahead with Asian expansion without investing time from its existing staff that could be better used elsewhere.
The cultural gap may be large, but there are some universal truths when it comes to sales – one of the key ones being that sales people want to be rewarded. If you offer strong compensation packages, you will get your foot in the door fast.
Herman Chor, co-founder of Creative Surge, Vancouver
At Creative Surge, we have hired Web development clients, Web developers and graphic designers from China. It is critical to build what the Chinese call guanxi, or relationships. You must build enough relationships with the right people to connect to the right clients.
To do that, it’s best to tap into your network in Canada or the United States first. Find people who have done business successfully in China, Japan and Korea, and have them direct you to their reliable contacts in those areas. Someone always knows someone who can help you build a foundation for a client base.
Trying to do so as a foreigner in the country you’re aiming to expand into can lead to a lot of wasted time and energy. If you are a new company, rarely will you be able to solicit your software to a client directly – they will usually come to you, or find you through someone else.
Also, if you are selling software, you can expect your ideas to be quickly copied. If your competitor has better relationships with large clients who will use your software, don’t expect to earn that client no matter how much cheaper or better your software is. With that in mind, forge strong relationships before you go forward. Be patient and don’t expect things to happen overnight.
THREE THINGS THE COMPANY CAN DO NOW
Narrow your focus
Learn about the countries and cultures in Asia so you can localize marketing efforts of the software.
Partner with locals
Find existing vendors who sell marketing automation software in Asia, then use a revenue-share model to motivate them.
Network in Canada first
Find people who have done business in Asia and have them direct you to their reliable contacts in those areas.
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Interviews have been edited and condensed.