With all of the talk about Asia and the hysteria around Donald Trump‘s presidency, it is easy to forget that the United States is still the largest economy in the world with GDP of over US$18 trillion and by far the largest consumer market with retail sales of over US$5 trillion.
While its size means the U.S. can be very profitable for companies, it is also highly competitive and has one of the highest “failure” rates for market entrants. This was confirmed by the 2016 International Business Survey, which ranked the US as the #1 market for Australian exporters but also one of the most difficult market for companies to do business in.
Over the last 12 years, I have worked with hundreds of companies trying to crack the world’s largest market and have seen first-hand what makes for a profitable market entry strategy.
Here are my top ten tips for Australian SMEs looking to succeed in the States:
1. One nation or is it?
A common mistake Australians make is thinking of the States as one market – It is in fact made up of many significant markets and companies may need to segment by geography, industry or demographics depending on their product or service.
2. Tall poppies welcome
Modesty is not a virtue in the US and will not win you business! Not only are you expected to say that your widget is the best in the world but also have 5 reasons why. You need to know your competitive advantage and convey it in a succinct and confident way. Practice your “elevator pitch” when you meet new people – US taxi drivers are always up for a chat!
3. Patience and persistence pay
With so many competing priorities in the US, email is usually ignored and voicemail is used to screen calls. When calling a prospect a good rule of thumb is to ring until you feel uncomfortable and then ring ten more times!
4. Do as the Romans do
With over 500,000 lawyers in the US it is not hard to see why it is one of the most litigious countries in the world. Seeking legal advice is just part of doing business in the US and getting it right from the start can save you a lot of time and money.
5. Ask for a biscuit and you’ll get a scone not a cookie
Just because you grew up on American sitcoms doesn’t mean you will necessarily be understood, particularly not in a Boardroom. Make sure all of your marketing materials use US spelling, grammar and measurements and never use Aussie slang.
6. Leave your sarcasm at the door
I am no comedian but never have I experienced so many lead balloons as in the US and what’s worse you can (and will) offend potential clients if you persist!
7. Business is king
In such a competitive environment potential partners do not want to hear about the weather or how your favourite footy team went on the weekend. Know your value proposition as it relates specifically to their business, prepare your elevator pitch and hit them between the eyes with it!
8. Absence does not make the heart grow fonder
Business in the US is all about face-to-face contact. Most of the successful companies I have dealt with have either set up shop over there or have their country manager spend at least 6 months a year State side to support distributors/reps and generate new sales.
9. If you don’t ask, you won’t get and it is your loss, literally!
Most companies enter the US thinking that they can do it all themselves only to find that they waste a lot of time, money and energy. Take full advantage of Aussie expat networks (there are Chambers of Commerce in most major cities) and State & Federal Government contacts in-market.
10. It is not what you know, but who you know
The Old Boys (and Girls) Club is alive and well in the US. Where possible surround yourself with key advisers who are well connected in your target industries and geographies. Join industry associations and attend trade shows – Networking is not an optional extracurricular activity!
About the author
Ian Smith is the CEO of CargoHound, an online marketplace for international freight that enables importers and exporters to source competitive freight pricing from ‘community rated’ service providers. He also founded United States Connect, an online one-stop-shop providing companies access to the information, advice and contacts they need to succeed in the US market. He has previously written three articles for Dynamic Business: TPP Trumped: how are SME exporters affected?, What does Trump’s victory mean for trade? and The impact of disruption on global trade and what it means for small to medium businesses.