Four instructive stories about working in the US market

Mikhail Averbakh, managing partner of iDealMachine and head of the iDM USA Landing program, told how to pave the way for his buyer in the US market, and shared with RusBase their stories from the experience of doing business in America.

How to find an approach to your client in the USA

Before entering the market, a startup should ask questions:

• Who is my audience?
• Where is she located?
• How does she use information?

Such an approach is an axiom, and the answers determine all subsequent work on building sales channels. But successful companies that first created a product and only then thought about the channels are examples of random luck. It is better to test the sales channel before starting to work on the product, before you had time to make any mistakes.

Sales channels are traditionally divided into direct and indirect. When using an indirect channel (indirect) special attention should be paid to distributors: they end up communicating with your customers. However, simply giving the product back and hoping that the partner will sell everything himself is not worth it. It is important to understand the logic of the channel.

Communicate with people operating them, and then you will understand his needs and be able to position yourself correctly.

And be sure to focus on building long-term relationships with your distributors: they will later give you valuable insights from the market.

1 history. Sincerity is above all

At the very beginning of 2000's, I participated in a large IT project, and my team was responsible for one of the modules. Initially, we tried to claim to maintain the entire project as a whole, but it was transferred to an outside vendor.

As a result, the project manager failed KPI delivery, and further, like dominoes, all the other modules, except ours, fell. Scandals and lawsuits began. The customer was very worthy, my team did an excellent job, and, realizing that the whole project was in danger of covering up, I went to the management and offered to pull it out on my own and for a small amount.

My step was not based on financial interest, but on sincere concern for the cause. Then it was not possible to save the situation: the project was still closed. However, six months later the bell rang: I was offered to independently conduct a new project without any tenders, although it was very difficult to enter this company.

Conclusion: personalization, sincere customer care and involvement is the key to successful work with channels.

2 history. Transition from reactivity to proactivity

At the dawn of a career, I led a small sales department. We were selling a rather complex product, and one of the key channels was telephone sales. To support it, we gave a lot of direct advertising, which was expensive, but effective, and received a large number of incoming calls.

My quality indicator was modest: if a person called you and you couldn’t close the sale, take money from him, you are a loser.

At some point, we unexpectedly ran into the problem of a poor-quality product: the incoming batch of goods was completely sold out before customers began to complain.

It was impossible to immediately replace the product - it simply was not available, and we had to exchange defective devices for a new model. The cost was almost the same, but the retail price was significantly different. It hurts, unpleasant, but it is necessary to change.

And I thought: why do we act reactively? All the defective goods will still have to be changed, and in fact we know to whom it was sold, why wait for people to call us?

Since the retail price of the new model was higher, a proposal was made to exchange low-quality products for high-quality products with a small surcharge. The offer sounded very attractive, because in fact it was calculated as the wholesale price plus the minimum surcharge.

It turned out that we were selling a new product at a price substantially higher than wholesale, but did not “cannibalize” our own retail pricing policy. The problem of withdrawing defective goods from the market has been exhausted, and we really liked the practice of exchanges.

After some time, we came up with a new “friendly” proposal: “We love you so much that we are ready to change any of your old devices, including competitors' devices, to our newest model.”

Due to the constant exchange flow and the introduction of cheap updated models to the market, we got consumers who initially could not afford the expensive purchase of our top model, but “sitting down” on our product, they later easily went to purchase goods of a higher price category. At first we made all the calls ourselves, and then advertising was connected to the support of the promotion. As a result, the exchange program turned out to be the most profitable in the company's history, and the product called “exchange” became a standard trading position.

Conclusion: each specific channel is necessary and important to work through, moving from a reactive position to a proactive one.

3 history. Math and a little cheek

In 2004 – 2008, when there wasn’t Google Play and AppStoreThe main channel for mobile sales was the HANDANDGO platform. Any developer could register on it and unload its applications, while the platform took 30% commission from sales. In those days, we led the category for Blackberry, as they had a whole product line and were stably in the top.

Every year, HANDANDGO gathered all developers for a closed conference, probably with the aim of consolidating the ecosystem. Of course, every year there were many parties, get-togethers and other parties, and in casual conversations we managed to find out the relatively accurate sales volumes of several important players in our segment.

I knew our numbers well, and I was somewhat surprised by what the shopmates told me: it turned out that the 80 / 20 rule did not work.

I made simple calculations and, using the newly obtained information, I derived a fairly accurate schedule of distribution of sales on the platform. It turned out that fewer 5% applications bring more 90% profits of the entire platform, and these 5% are us!

I went to the management, announced that I was dissatisfied with the 30% rate and would like to discuss its reduction, for example, to 20% - as for one of the market leaders. Of course, they refused me, moreover, in a rather ultimatum form, saying that they generally plan to raise the rate to 40%, but according to the old friendship they will leave me at 30%. The conclusion was the same: they do not know what I know, and bluff. The next day, we simply deactivated the entire line of our applications on the platform. A day later, the bell rang, and we quickly agreed to lower the commission percentage to the desired 20%. In other words, we were more important to them than they were to us.

Conclusion: do not forget about the simplest mathematics, and if you have a “dragon” in your hands, do not be afraid to use it.

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Story 4. Flexibility is the key to survival

The times were "shaggy" and mobile software had to be sold. That is, do not wait when it is downloaded from AppStoreand sell. One of the major wholesalers entered into a distribution agreement with us, but there was a problem: they did not know how to sell downloads, they needed a physical artifact in stock. Therefore, we had to release applications on CDs, and for the sake of production efficiency, we purchased mountains of disks and boxes for them.

I didn’t like it terribly, but it was necessary to adapt, and in the end we managed to get an unexpected benefit from these boxes. Having agreed on the investment of our promotional materials in the bags of the participants of one major exhibition, we provided the organizers with a CD with a full package of our software, but the key from it could be obtained from us at the stand. We sent the key by mail, and everyone had to enter his address on our computer himself.

All three days of the exhibition we had a queue, people entered their addresses very carefully, and there was not a single non-existent address. And the exhibition was visited by representatives of the corporate sector procurement - this is how we got excellent connections and, as a result, major contracts.

Conclusion: you need to adjust to the sales channel, and your inability or unwillingness to do so does not count. It is important to see the feature of the channel and understand what benefits can be derived from this.

The sales process resembles the American saying: When life gives you a lemonade. Carefully study the market and the sales process, make friends with partners and grow useful links, but be prepared to respond quickly and change approach if the situation requires it.

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