8 mistakes to avoid when implementing your sales team in the US
Half of the French startups who set foot in the United States fail within a year. The American dream can easily become a nightmare. In order to succeed, the international development of your sales department has to be well thought out. No pain, no gain !
Your product/service is ready to cross the Atlantic, this step is the first test. It is the most critical one because it is going to be paramount on the path to success. A successful implementation of your sales team allows you to set up your brand on American territory, secure a revenue stream, support a visa application and gives credibility to raising funds with American VCs.
Here at French Accelerator we share with you the best practices. We interviewed industry professionals to tell us about the most frequent mistakes and how to avoid them.
1. Wrong timing
The right moment to develop internationally is not the same for all startups. Some have worldwide ambition from the beginning, others wait to be well established in one market to attack the next one. What is certain is that your startup has to have a mature product/service, ready to be commercialised, and to be financially able to go global.
The first mistake startups make is the lack of preparation. The sales department internationalisation usually initialises the startup’s international spread. That development should be thoroughly prepared beforehand, especially for its estimate and budgeting. The relocation of your business to the United-States will take between 1 and 3 years therefore the initial investment should be important otherwise it’s bound to fail. Go big or go home!
2. Unfit organisation
During that phase in the development, finding a good fit is essential. There are different cases:
• Directly recruiting an American team
This American team has no knowledge of your business culture, your French working methods, or the product/service that you want to sell. They have to quickly learn and assimilate all that knowledge with a 6 hour time difference minimum. This restraint can provoke tensions between the teams and create a lack of reactivity. Moreover, this team is expensive for the startup. Your American manager will need at least 5 people around him, between $500K and $1 million for the team. The salary for that CEO also has to meet the price of the American market and be attractive enough for him to chose a foreign company without local references and with a new product.
• Have your French Commercial Director be the lead salesman
Sending your sales or marketing director to manage the team in the US is a common mistake. It may seem like a good idea in theory because that person has showed its worth in France. But in reality this French expatriate does not know the American market, does not apprehend the cultural difference and above all does not have the network to get clients in the US. The risk is to have that person rapidly overwhelmed, alone on the other side of the Atlantic. Moreover this expatriate will probably move with his family which is expensive and requires some process.
The least risky solution is to buy a competitor or to join forces with a strategic partnership in the american market who will take care of the launch and the commercialisation. Once this step is done successfully, you can expand the rest of the business.
An alternative scenario is to send your CEO or a top executive of the french team to duplicate the team in the United States, leaning on accelerators. This allows you to have someone with the startup strategic vision on the ground as well as surround your executive with specialised American salesmen to attack the market. The CEO’s mission is then to recruit the right individuals to see through your project.
3. Carless recruiting
The recruiting of your sales department in the US has to be based on an extensive knowledge of the american labour market, very different than the French one.
First of all, Americans change work, on average, 12 times in their lifetime, French only 5 times. Americans always are on the lookout for new opportunities and continually grow their network in order to be able to activate it, if needed. They also are overly prepared for their interviews and conduct them extremely well. They excel at name dropping for example, mentioning names from their network to impress.
“It is a little like dating in the US, there is a very professional side to looking for a job. Most candidates will go through a lot of interviews in order to have multiple offers to make sure to choose the best one.”
Laurent Ruben - Founder & CEO French Accelerator, Los Angeles
Secondly in the US, employees work at will. Meaning that they can be fired without cause (except for illegal reasons) or advance notice. On the same note, they can leave the same way. American management rewards valuable employees and quickly dismisses the others.
Third, all these factors make employees loyalty expensive. Either your startup is able to offer competitive salaries on the American labour market, or you can give away some vested shares, this solution is the best long term solution because it guarantees fidelity and motivation.
4. Optional offices
Physical offices are not a priority at the beginning of the installation of your sales department. They will only be a loss of valuable assets. Rent for offices is expensive, especially because the address is important to display the success of your venture. If you’re not ready to pay the price it is useless. Moreover the immense geography of the United States make it so if you choose a location from the beginning it may turn out to be incompatible with the process of your development. Finally, Americans are used to working from home, particularly in the more relaxed environment of startups. Your sales team will move to meet prospective clients, not the other way around. If offices really are a must, the use of co-working spaces is fairly common, you can have meetings there or hold conferences.
5. Overrated Key Performance Indicators
In order to manage your sales team and evaluate its progression you need to set some objectives. Usually the method used is the analysis of the financial results at the end of the fiscal year. KPI’s show relevant results to assess the progression of the startup objectives for short, medium and long term.
However, at the beginning of sales activities, other elements should be taken into account. The number of contracts signed with clients but also the activity of your sales team such as emails sent, calls, number of prospects and opportunities or the activity on the CRM platform.
“If the goal is to sign a contract a month it means the sales team has to have, on average, 100 leads, set 20 meetings to transform them into opportunities, make 10 propositions to finally send 4 contracts and end up signing one.”
Gildas Duval - Vice President Business Development French Accelerator, Paris
Your main target should be the key references. They are major clients, leaders or influencers of their industry, who will drive other clients when they adopt your product/service. These key references are a token of quality and your best ambassadors.
6. Underused CRM platforms
“In France we don’t utilize CRM tools enough to generate leads and acquire clients.”
Daniel Baloche - Founder & President ITAG, Boston
In the United-States, all great sales organisations rely on a CRM platform to manage their marketing and sales departments. It allows a good full picture overlook. It is the funnel progression, the evolution from lead to opportunity then customer. A third of these businesses use Salesforce. On the French side, the ratio is much lower and all the functionalities of the tool are not used. To be successful in the American market, train yourself and train your team.
“Companies rarely have a sales problem, but a pipeline problem”
Nick Howard - Senior Director Quark, Los Angeles
7. Limited marketing efforts
The United States are worldwide leaders in terms of advertising and marketing spending. A strong marketing strategy and adapted budget are required to match the players of that market. The marketing strategy is the link between the marketing and sales department.
“In France people are not fully aware of the utility of the marketing effort prior to the sale.”
Daniel Baloche - Founder & President ITAG, Boston
The two levels sales team structure is the most common. One team manages inbound leads coming from the website, email campaigning, social media, search engines etc. This connection is the link between marketing and sales, the objective of that team is to qualify the leads acquired organically into opportunities.
The other team, outbound, equivalent to french pre-sales, has a deep knowledge and a broad product understanding to be able to highlight the added value of the product to the prospective customer. Some American salesmen don’t always have that skill set but a very good network, they can be teamed up with the other sales profile.
8. Neglect cultural differences
It’s not a surprise, there are cultural differences between France and the United States. Some of these differences can be seen in the way people do business. What is surprising is that French startups often forget to analyse that point and have some trouble getting used to local habits.
The most common mistake is the lack of preparation of collaterals. A lot of startups come to tradeshows and conferences with catalogs and flyers badly translated and which don’t use the business appropriate vocabulary. On the same note, the English version of the website must be flawless and respect American standards. Americans won’t put in the time to deal with information or graphics they don't understand.
An extensive network is absolutely essential to succeed in the United States. You should attend tradeshows and events organized in your industry to improve your startup’s reach. Apply yourself personally and constantly look after your professional social networks to have a good brand image. It’s essential to be able to present and sell yourself in the best way possible on social networks. In 2017, 128 million Americans are on Linkedin !
“Titles matter a lot. Being introduced as a Sales VP will open more doors than being introduced as salesman. Americans are more likely to do business with someone that has power of decision.”
Girish Joshi - Director Business Development French Accelerator, New York
In France the usual approach is top down. You talk with a top executive and upon approval he will introduce you to the person that will use your product/service. In the US, it’s the opposite; it’s a bottom up approach. You will never talk to a CEO or top executive if your proposal is not first examined and approved by the person who will use it.
“Americans are more pragmatic than Europeans. In the US you have a very short window to convince a consumer and it affects the way you communicate with your brand. For example, French are more emotional and give more credit to context while Americans look for immediate profit, simplicity and price.
Julien Subit - Founder & CEO Bold+Beyond, Los Angeles
These mistakes can easily be avoided with exhaustive preparation beforehand. Some experienced advisors can help you. French Accelerator’s team is perfectly set up to assist you, you can also contact mentors from the different French Tech hubs in American cities. You are bound to make other mistakes but it is the logical cycle of a process like this one. Practice makes perfect.
Once your sales team is up and running in the US you can continue with the internationalisation of your startup. That development on American territory is worth it, it entails great opportunities for your business such as high venture rounds and hyper valuations.
BLS, Bureau of labor statistics, US Department of labor,
https://www.bls.gov/news.release/nlsoy.t01.htm, “Number of jobs held, labor market
activity, and earnings growth among the youngest baby boomers: results from a
CRM Industry User Research Report. http://www.capterra.com/customer relationship management software/user research