Have Brand, Will Travel

With the dollar hitting new lows against other currencies, it seems the United States is headed for a recession.

Does that mean direct marketers considering international expansion should put those plans on hold? Not necessarily.

“The economy is tanking here but in parts of Europe everything is preceding on all cylinders,” says Don DePalma, founder/chief research officer of research and consulting firm Common Sense Advisory, Lowell, MA.

“You're leaving money on the table if you're not doing it,” agrees Charles Prescott, the Direct Marketing Association's vice president for global knowledge network services.

The trick is knowing the market you're taking your product into — and understanding whether your company's wares are wanted and needed in that region.

DePalma says even firms that possess a tremendous understanding of their U.S. customers' demographics have floundered when they moved outside the home market.

“After years of psychographic analysis, they've got behavioral observations that ‘so and so in a [certain] ZIP code will buy a Lexus and shop at Louis Boston,’ ” he says. “But then they go to Germany and they have no idea what Germans want. They lose sight of the fact that there are many mini-target audiences within a larger audience.”

“I think a lot of companies struggle with the realization that they're getting visitors to their Web sites from all over the world and need to decide whether investing in globalization is going to give them a worthwhile return,” Prescott says. “Some companies have gone global without thinking it through and are feeling a lot of pain. It's easy to make a mistake without realizing you've done so…until it comes back to haunt you.”

While Prescott isn't seeing a huge wave of American DMers looking outside their borders, he feels there's promise since his office still gets calls from interested members. “Normally when we're in or on the way to a recession, calls about overseas marketing dry up. That hasn't happened this time.”

He says there are potholes for those new to international DM ventures: The United States doesn't share a common postal money-order system with most countries and increased postal security concerns still loom. But there are also fabulous opportunities. “It's not rocket science, but it takes discipline. You need someone with business experience assigned to the job. The ROI at first won't appear healthy, but after a year or so it will be exceedingly attractive.”

Some markets — such as Canada, Japan, the United Kingdom and France — are very loyal once they trust a brand, says Prescott, who advises talking to experts to determine which countries are right for a given company. “You'd be surprised what you can find out.”

While at Readers' Digest, he learned that German consumers love cowboys-and-Indians memorabilia. The U.S. edition of the Digest published a history of Native Americans that ended up selling more copies in Germany than here.

Where are the big growth areas? DePalma says the new consumer classes developing in China and Central Europe are an opportunity for DMers.

Prescott agrees. He points out that in those areas and Russia there are people with money and very little to buy, thanks to an underdeveloped retail market.

“There's good transportation and no stores. It looks exactly like the Midwest in the 1880s and '90s when farmers had money to buy. Along came Sears and Ward, and fortunes were made. That's the exciting stuff out there, and our people aren't paying attention to it.”

While in Moscow last December, Prescott says he saw American companies such as Readers' Digest, Rodale and a few banks tentatively starting up. “But none of our good catalog brands were there, and I think they're missing out.”

Of course, he adds, U.S. firms have headaches to worry about at home. “And in Europe there's always pressure for those companies to go abroad. In a sense, American companies are spoiled because they've got this huge common market, which not even Europe has yet.”

When evaluating new markets, DMers should consider if they need a physical presence there. “You need to understand the country. It depends on a range of questions — what the product is, how it's used, is it regulated, how big the market is, and tax and personnel issues,” Prescott says. “Can you meet your business needs through an agency relationship, or do you need an actual corporate presence?”

For DMers that don't have experience overseas, it may make sense to begin in a place where they feel comfortable, according to DePalma. One way is to size up the situation on a language basis to find a comparable audience, such as Australians or Brits.

Another “bunny slope” into international marketing is to target non-English speakers in America. Prescott says Crutchfield launched a U.S. Hispanic site before making its initial international foray into Canada.

Companies need to consider whether their brands will travel well, whether the prospective audience is economically able to buy their products and — most importantly — if they want the products.

For example, says DePalma, a dairy in Vermont might not want to try to sell Brie in France. But, if there's something very special about the cheese (maybe it's made by octogenarian nuns who break broncos at rodeos, he jokes), it could be special enough to appeal to the French. “You have to convince people your brand is worth buying.”

DMers interested in doing business abroad also have to ensure that the product in question can be sold in the targeted market. A company that wants to offer raw-milk cheeses in the United States will run into all kinds of legal roadblocks, and a firm selling haggis in Europe would have to certify the product did not contain animal brains.

World Wide Opportunity

If you're taking a marketing Web site global, don't think English is a universal language.

“The typical conceit is that English is enough,” says Don DePalma, founder and chief research officer of Common Sense Advisory in Lowell, MA. “Think of yourself. If you go to a Web site in a language you don't understand, how quickly do you decide that it isn't an appropriate experience? Put yourself on the other side of that mirror.”

DMers also should localize their sites' transactional and registration functions to different regions. For example, DePalma says, your software must be able to recognize the character set of your international target audience's language. And remember to ask Europeans for their postal code, not their ZIP code.

“A German who doesn't speak any English won't understand what that is,” he says.

You'll lose sales if you don't support credit cards that are widely used in the target country. In other regions you won't get many buyers if you don't accept alternate forms of payment, like electronic checks.

“Someone who's [taken the time to fill] out a number of [data] fields will be really annoyed at this point,” DePalma notes.

Your Web site is a great place to gather information that can help determine which international markets are interested in your products, says Charles Prescott, the DMA's vice president for global knowledge network services.

Have your Web analytics team tell you where the browsers are coming from, what pages they're landing on, what they're looking at, how long they've been on the site, and whether they're placing orders. If they aren't ordering, it could be because your site is making it difficult for them to do so.
— BNV

The Global Hometown Team

Manchester United is using CRM as part of a bid to make itself the hometown team, not just of the United Kingdom but of the world.

The soccer club is working with SmartFocus (which offers campaign management and marketing analytics services) to build a single view of supporters across all team-related transactions.

The goal, says Steven Falk, Manchester United's director of commercial services, is to create a “fully transparent view of our fans who transact — and a basis for attracting others to do [the same].”

“Our suite enables customers to consolidate customer interactions and use the information to set future strategy from both a product and marketing point of view,” adds SmartFocus' managing director Curt Bloom.

The team communicates with fans in a number of ways: direct mail, print advertising, inserts, e-mail, message boards, and on the Web, Falk says.

Research by TNS Sport shows that 333 million fans name Manchester United as the team they support, and 139 million of those fans say MU is their favorite team.

How will the team evaluate the ROI of its CRM efforts?

“We look at it in two ways,” Falk says. “The opportunity cost of not having a robust CRM facility through which we can attract new sponsors and partners, and the blended cost of acquiring contact details from our fans.”
— BNV