When international opportunities come knocking, how do you know which opportunities are worth chasing and which aren’t? Here are the metrics you need to make a confident decision.
Many expansion-stage companies consider entering new international markets at some point or another during their journey. Typically, the initial thoughts begin when a company starts seeing its first high-quality opportunities coming in from abroad or they close their first international deal. This is an exciting moment because the international market(s) feel within reach, but it is also a very scary one, since the investment requirements can be very intimidating for a young and typically capital-strapped company.
As a younger company starts exploring new international markets, it is important to do so strategically. This means that every investment needs to be planned out with clear expectations/goals and properly measured, so that the company can learn from the experiences and maximize the likelihood of success. Success over the long-run is also tied to the ability to produce a repeatable testing and evaluation environment. To do that, you need to zero in on the evaluation criteria and metrics that matter most.
This post provides a series of recommendations on how to think about international market entry evaluation metrics and offers a list of the most common metrics used as well as a sample framework.
4 Rules for Selecting Evaluation Criteria
- The criteria must be measurable.
- Address the key expectations set forth in the market entrance strategy and your chosen experimentation period. Make sure the metrics you choose at all stages of the evaluation process will demonstrate progress towards achieving management goals and help you maintain or build executive support.
- Consistent with the level of maturity of the market and level of investment/commitment. New markets are always underestimated in terms of education investments and time.
- Consistent with the mode of entry. For more on which mode of entry makes sense for your strategy see my previous post, Considering Going International? 10 Tips for Success.
What Metrics Should You Consider?
You should start monitoring progress immediately and measure 3-5 metrics at any one time. Some of the most common metrics measured in the early experimentation and evaluation phases are:
- Level of Interest: Key Relationships Made, Number of Opportunities, Pilots
- Traction in Market: Marquee Logo Wins, Customers Wins, Prioritized Prospect Wins
- Competitiveness/Market Maturity: Lead to Opportunity Conversion Rate, Win Rate
- Top Line Results: Revenue, Bookings, Committed Revenue Exceeding Plan of Record
- Takeaways/Competitive Wins: Win XX% of deals against competitor X
- Capital Efficiency: Customer Acquisition Cost, Investment Multiple, Return on Investment
- Partner/Channel Performance: Potential Partner Interactions, Quality Partners Signed On, Co-Marketing Investment Commitments, Partner Generated Leads, Opportunities or Wins, Partners Generated MRR
Selecting an appropriate set of metrics to evaluate the success of the market entry strategy is critical because it:
- Provides the team with information to make judgments on how it is doing early and fast so it can quickly alter approach to get it right in the target market.
- Establishes a regular process to review and retrospect based on new insights so you can foster a pattern of continuous improvement.
- Generates executive support and excitement for expansion.
If you are interested in learning more about how to best plan out your company’s international expansion, I recommend reading my previous post on 10 best practices for planning out and launching an international expansion strategy.
Looking for more tips on international expansion? Watch these videos from sales and business development expert Dave Brock of Partners in EXCELLENCE:
- When Should Your Company Consider Global Expansion?
- The Best Routes to Market for International Expansion
- The Pitfalls of Launching Overseas
- Factors for Global Expansion Success
Photo by: Katey