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The Challenges of Setting Up a Remote Sales Office

Updated: Mar 15

So you have built your business over the years and now you are well established in your home market. You understand how to find and sell to customers in your own country and in countries nearby. You are even making some successful sales further afield. However, if you really want to be serious about export sales, especially to other continents, then the time has come to face the fact that when it comes to long haul travel we are only likely to make the effort to visit the most attractive prospects. What I mean by this is we fall into the trap of only feeling comfortable with the time and expense of inter-continental travel for leads that are of very high value and are very well qualified i.e. very likely to

convert to a sale. Essentially, these are the easy sales. Yes, the travel is hard, but we know that if we put our rear ends on an aeroplane then these sales are easy to close.


Frankly this isn’t selling, it is just order-taking. In our home markets we go out and fight for business. That means we pursue leads that aren’t near certainties. We also farm our territory by regularly attending regional trade shows, visiting local events, marketing to potential customers, etc., etc., etc. Yet we don’t engage in these activities for many of our export markets and then we wonder why export sales are lower than those at home. Indeed, with the advent of Covid, most long-haul travel is just plain impossible. So the problem of distance selling is now even harder.


If you have read this far (and I do hope someone has!) then you are probably already thinking that the only solution is to do abroad what you do at home. This means having local sales people that can attend shows, do demos, support clients and generally farm the territory. You have probably also realised that one of the main objections that B2B technology purchasers make when considering buying from companies based far away goes something like this: “You don’t have an office here. What about my support needs? And, hey, how am I going to import this stuff? Who will do the installation? What if I want to talk to someone at 10am in the morning when your office, three thousand miles away, is closed, and , and , and,...........”. You get the idea. So if you are serious about growing your export markets, then you already know that your need to be there and by being there you mean on a permanent basis. YOU NEED A LOCAL SALES OFFICE.


Whew, we’ve said it. The cat is out of the bag or out of the box, if you are a Schrodinger fan. Now we know what we must do, it should be simple. We’ll rent some office space in Europe or America or China or wherever we are targeting and then we’ll hire one or two technical sales representatives, give them laptops and cellphones and off we’ll go. Sounds relatively simple until you consider that companies try this all the time and it fails on a horribly regular basis, too. So let’s look at some of the potential problems or challenges that you should consider.


Purpose


Exactly how will this sales outpost operate? Will it just have someone who answers the phone and generates quotations before doing pre and post-sales visits, as well as maybe providing local support for technical questions. If so, do you still plan to ship your product directly from your home factory to the end-user/purchaser? If you do this, will you still have some customers who are reluctant to buy because they are wary of having to deal with importation issues or feel you aren’t fully committed to your presence in their region?


Alternatively, are you going to ship to your new office and then on-ship to the customer? This would mean additional work for your new salesperson who now has to handle

importation issues and will have to deal with billing and chasing some payments. If you do want to ease the purchase path for your customers by providing a full-service local office, then what legal form should it take? Options vary, but in most countries you would either need to create a subsidiary company or at least register a formal branch office. In fact, in some jurisdictions, just having a small sales office may cause local authorities to view you as having an “Permanent Establishment” there and may give rise to some unexpected tax obligations or other local regulation compliance demands. So be wary and get advice from local experts.


Hiring


For most companies, there are two clear options: (a) transfer an experienced person from the HQ team to the new office or (b) hire a new person locally. If you go with option (a) then will your proposed transferee have all the skills they need? For example, if you have

decided to handle shipments through your new office because you feel this will increase sales, then you may want to consider if sending over you number one salesperson is a good idea. Will Jim or Jane (your star sales people) be able to deal with the operations necessities of the business…… If you go with option (b), then is it safe to hire based on advertising from a distance and maybe meeting the candidates only once for an hour or two before making such a momentous decision. There are risks to be weighed either way.


Management


How will you manage the new office? If you have one or two people there, how will you monitor their work and measure their progress towards your business goals? If, like many

B2B technology companies, your sales cycles are long, then measuring by sales orders received will not be useful in the first months or maybe even within the first year. If they were starting to work a new market at home, then you would probably have a plan for activities and monitor that those activities are happening. You would probably also monitor to ensure that interactions with customers are prompt and at a standard that you have come to expect. For the lone employee on another continent you will have to rely on their word that things have been done and done properly.


Distractions


Secondments often don’t work because what sounds like a great opportunity to work in another country and have some adventure becomes, in the cold light of day, very hard work. A lot of which involves doing stuff (like accounts or dealing with import/export problems) that are way outside the employee’s comfort zone. These tasks create huge stress and consume significant time and, worse still, they can sap the positivity that a salesperson

needs to maintain, in order to enter each customer interaction with a “we’re gonna win” spirit. The tyranny of distance can also be hell for new hires in the remote location. They don’t feel as much part of the company as those employees at head office and often feel that HQ has unreasonable expectations from them to grow sales and also handle support and the niceties of local operations.


Basically, a salesperson who has to spend 40, 50 or 60% of their time on non-sales activities cannot be expected to perform as well as the salesperson back home who can focus 100% on selling. So here the trick is to minimize distractions but recognise that they exist i.e. plan for them and temper your expectations in context of what can reasonably be expected.


Running a remote sales office can be a lonely assignment. Without the support of colleagues who see how hard you are trying, then the ups and downs of won and lost sales can feel like daily battering. The distractions of non-core activities don’t help. So if you decide that opening such an office is right for your business then plan carefully to define the function, the person and the support they will need to give this important investment every chance of success.


Training


Have you given thought to the training required. If you hire a new person, then of course you plan to have them to HQ for product training, but maybe they will need other training to be

effective in your new remote office. For example, they may need help and support in the accounting function if you plan to sell through the new office. If you hire a person with technical but no sales experience, then help on the sales skills front will be a must. Indeed, even for an experienced sales person that you might move over to the new office, some training on cultural differences in the local market might be useful.


Trust


Whether you relocate a key team member from home or hire a fresh face, then trust can be a

major issue. If you have decided to handle sales through this new office, then there will be bank accounts that may have large amounts of cash in them to be managed. You probably won’t be able to operate the traditional four-eyes principle that provides a basic level of accounting security!


Location


Where? Do you decide location based on where the highest density of customers are, or

maybe on where they are not, or should you consider where it may be easiest to hire a suitably qualified salesperson. Maybe the issue should be more about selecting a city/state that is easy from a language or travel connections point of view. Maybe, we should look at whether employment law or other regulatory compliance will be easier in one place versus another.


Expectations


Managing our expectations is also important. What is reasonably possible and in what timescale are both relevant questions to consider. Is there a point that you can define that we would consider failure for our new remote sales operation? If there isn’t, then you should

probably worry that this new office could potentially become a wasteful money pit! On the other hand, having a plan for the successes that are necessary in the first years for the project to be considered worthwhile is just as important.


In the final analysis it is very much as the famous physicist, Niels Bohr, reportedly said:


“Prediction is very difficult, especially if it's about the future.”


So all this worry about the potential problems of a remote office certainly won’t guarantee success, but as I am often fond of saying to my colleagues: “Whilst careful consideration and planning can’t guarantee success, it can certainly reduce the opportunities for failure!”. So a little worry now may save a lot of time, heartache and cash down the road.


If you think Red Box Direct might be able to help you get your remote sales office up and running quickly and at lower cost and risk then contact me. I’d be delighted to hear from you.



Rory Geoghegan

March 15th, 2021


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