Selling their products or services into North America is lucrative dream for many British SMEs. After all, there are around 340 million potential customers in the US, compared to 70 million in the UK.
Taking on the US market is not easy though, there are a wide range of variations; everything from different regulations and legal requirements to marketing techniques. It’s also vast geographically, and the idea of trying to service customers 3,000 miles apart may be too intimidating for many companies.
But 11 years ago, under the leadership of new CEO Mike Lord, a tiny West Midlands company started selling its homelifts in America. Stiltz now has a £80 million turnover, sells 700 lifts a month and the US is its biggest market – twice the size of the UK. Mike has ambitious plans to double the company’s American operation in the next five years.
So how did he make a success of Stiltz stateside? He shares his experiences and the tactics other SME leaders can employ.
Establish a strong business case
Moving into the US market will probably require lots of time and money. So before taking the plunge, make sure there’s real demand for your type of product or service and that your offering is sufficiently differentiated from what’s already available.
I’d previously worked for a company selling stairlifts in the US, so I knew there was a strong mobility market and that nothing out there similar to the homelifts Stiltz manufactures. But I considered other facts, too, such as US homes tending to be bigger than British ones, making lifts easier and quicker to install.
Get someone on the ground
We began selling in America remotely through dealers. But it quickly became clear we needed a US presence. Even if you have just one person in an office – as we had initially – it’s a huge advantage to have someone in situ with good knowledge of how American business works. If possible, find someone who already lives in the US. Failing that, send someone over. Opt for a person who is strong on sales and who understands your business sector, so they can get trade up and running, quickly.
You’ll almost certainly need to sell through dealers or retail stockists, until you are well established, partly because the country is far too big to sell from one or two locations. Though using dealers may reduce your profit margin, they bring the advantage of understanding local trading and tax rules and may have permits for work, such as in our case, installing lifts into people’s homes.
We have around 60 active dealers, but we’ve also just opened our first direct-selling operation in Denver, so will be able to see which is most effective and adjust strategy, going forward.
Be smart about regulation
Rules and laws surrounding products and services in the US not only differ from the UK, but often from state to state and sometimes even on a county level.
Check to see what regulations apply to your product or service; whether it’s a new type of ebike, new digital technology or a variety of cheese. If rules are too onerous and will require big changes to your offering in one state, consider launching your US sales in another.
We had to meet various certification criteria, before our lifts could be sold, and small product changes were necessary. Before applying for certification, we consulted an American engineer to ensure our homelifts were complaint and make the process smoother.
Be aware also that charges such as sales tax differ from state to state.
Be proud to be British!
Fly the flag! Americans seem to like us and it’s far more interesting for them to deal with someone who isn’t American with another American product. Play up this point of difference in everything from negotiations with suppliers to sales pitches to potential customers.
Tweak your marketing techniques
There are quite a lot of aspects of marketing that aren’t quite the same as in the UK. Americans the US uses slightly different size brochures, for instance, so don’t get caught out mailing the wrong size of asset. The language isn’t always the same – you talk about a mobility device that fits in your trunk, not your boot. Make sure you have a .com customer website as US consumers may be a little wary of .co.uk.
It’s worth getting a US-based marketing consultant to sense check your marketing material. But don’t worry about changing everything all at once. You can get by with UK material for at least the first few months, providing it is clear and understandable for your target audience.
Alter don’t reinvent your products
We had to change a plastic drum – part of our lift mechanism – into a metal drum to comply with American standards. And, of course, you have to adjust the voltages on the electricity supply.
But tastes and design preference in the US and UK are not that different, in our sector at least, so we didn’t have to dramatically change the look of the lifts. Don’t feel you have to completely Americanize your products.
Maintain market position
Your products or services probably won’t cost exactly the same in the US as they do in UK. But if you’re a low-cost supplier in the UK, I’d suggest being a low-cost supplier in the US, too. If you’re a premium brand in the UK, be a premium brand in the US. Go with what you know, at least to begin with.
UK versus UK staff
American employees can be quite larger than life and very positive. Give them a target and they’ll tell you they can knock it out of the park. They’re keen to impress, which makes them nice to work with, but they can also be more used to a hierarchical structure and will very much look to you for guidance and decision making.
Employment rules differ in each state too. In some places you can almost fire people at will, while California has the same sort of worker’s rights as Europe. But if you stick to a British approach to employee relations, you’re unlikely to have many problems.
Mike Lord is Chairman and CEO of Stiltz, the UK’s leading homelift provider. The company manufactures, supplies, and installs a range of models in different sizes and for different needs. For more information click here
CEO, Stiltz