Emerging markets can be fertile ground for enormous sales growth but each market has its own unique hurdles, says McKinsey principal Jon Vander Ark. In an article in the current issue of McKinsey Quarterly which excerpted Vander Ark’s forthcoming book, “Sales Growth,” the noted expert observes, “Without a deep understanding of the local customer you are likely to trip over those obstacles—or abandon the market prematurely like our apocryphal salesman above. To break into emerging markets and capture the potential, the best sales leaders have realized they have to think like a local.”
Companies often make the mistake of importing approaches that work at home without making any adjustments, he thinks. Meanwhile, local players often underestimate both the resources and speed required to match market needs and compete with global players. Emerging-market infrastructure is often less developed, channels are fragmented, and cultural preferences often more complex and varied.
Vander Ark proposes the following three steps to accelerate growth in emerging markets:
- Get on the ground.
Information on customers and the market is often hard to obtain. Successful companies invest in all the data sources and expert information available, but nothing beats getting a firsthand sense of how the market works by visiting local areas and resellers. This ground-level view also gives sales leaders a clear read of where the market is heading and lets them plan for it.
- Overinvest in the right partners.
In developed markets, a company may have many capable potential partners. In emerging markets, finding a partner is a much more strategic endeavor. With limited choice, partnerships are for the long haul, which means finding the right capabilities and partners that share your values.
- Build talent for the long term.
Annual growth in emerging markets can exceed 10 percent. That pace requires sales leaders to think creatively about how they will attract and retain the talent they will need to keep up.