Implementing an International CRM Project

The following remarks are not a comprehensive recipe of how to conduct an E-business; it aims to highlight some of the most relevant issues. The Web itself provides zillions of references to articles and consulting firms that can be of help. It is left to your own judgement as an entrepreneur to seek and find whatever best fits your needs—CRMGuru.com is a good starting point.

The Differences Make a Difference
In order to go international as an E-business requires a new strategy—it must be redesigned completely, which is not an easy task. Not only is there a considerable difference in Internet use between countries, local culture and regulations make that what works in one country doesn't work or even may not be allowed in/from another country.

And you are not alone in this! Also your customers operate internationally via the Web, just like prospects, suppliers, competitors, employees, trade unions, etc., are doing. So, if you deliver in different countries customers may compare and choose to their own advantage. For example, they may compare GBP prices + p&h of amazon.co.uk with those in EUR of amazon.de if they live in—say Belgium. You may choose to produce in different countries, using different suppliers, for reasons of cost efficiency and logistics.

As another but "reverse" example, consider the latest development regarding plane ticket prices (Dec 2003). When buying tickets via Internet 18 European airline carriers quote different prices for identical flights, dependent of where the buyer lives. The difference can be as high as 300 %! The EU's first commissioner for transport, Loyola de Palacio, has demanded an explanation.

Depending on the responses the European Commission will decide about further action.

Email marketing, consumer acceptance and local business climate all play a role. You must decide in which countries you need an office and in which not. This goes hand in hand with designing an international marketing strategy that covers all countries in which you want to sell your products or services.

Global Strategy
Speaking about adapting the strategy, it is necessary to really make it a global one. From this renewed strategy has to follow the business case for your global internet investment. In order to build this case successfully you have to know the markets you are interested in. What is the attractiveness of your products or services in each of these markets and how is the (potential) competition performing there? If you are going to deliver products, you also must consider where you are going to produce them and how your suppliers can fit in that arrangement. Logistics, costs and local regulations play a role.

In order to be successful via the Web channel the whole business has to be adapted to it. Usually this means that the complete IT infrastructure has to be integrated, but also that sales, service and marketing work closely together.

Going international not necessarily always is an expansion in the sense that more products or services are being sold to more customers in more countries. Maybe that does not work for all products or it may not be profitable for certain services. It must be decided beforehand which products or services will be involved and which ones not (yet).

Where to Go?
As mentioned before, Internet penetration varies considerably per country. While in countries like the US, Canada, Australia and the Nordic countries 54 % to some 79 % (Iceland) of the population are Internet users, for the rest of Europe that figure is lower.

Other areas of the world, like Africa, South America and Asia have even lower numbers of Internet users, with as exceptions South Korea (53 %) and Hong Kong (60 %). Another useful figure is the number of PCs per 1000 inhabitants for which #1 San Marino (!) stands at 738, at a distance followed by US (574), Sweden (507) and Denmark (506). Australia is #8 at 460 and Singapore #10 at 436. (All figures from Issues 2004, a Newsweek Special Edition, December 2003.)

The international marketing campaign should furthermore take into account the local costs of Internet connections. This has influence on the relative number of at work Internet users as compared to the number of home users. The (relative) purchasing power of the prospects per country also is a relevant parameter.

Various markets (B2B/B2C)
In a B2B market the above considerations have a different impact than in B2C. In general, B2B markets are more open than B2C in regions outside Northern America, Europe and the Asia Pacific region. In which countries do you expect an interest for your product (service) and where shall the ROI be the greatest? Consult the latest figures from e-commerce research companies such as Forrester and The Boston Consulting Group, about the development of numbers of Web site visits and purchases for the countries and product/service categories you are interested in.

With so many companies currently on the Web, it in itself becomes an attractive platform to advertise. This B2B billboarding seems to be especially attractive on those sites at work Internet users are likely to visit: news sites with financial or technological (telco) content.

Whatever your products are, you must be certain that you are allowed to market and sell your products in each of the selected countries. The products and campaigns have to comply with all local legal and regulatory requirements and should not infringe on the patent or intellectual property rights of a (local) competitor.

In going international your business objectives will dictate what the best balance is between operational excellence and time-to-market. This sets the stage for your multi-national marketing campaign. Furthermore, you must be flexible and able to adapt your international strategy to whatever responses and changing circumstances you will encounter while going forward.

Some of the other issues that play a role are:

Production and Distribution
Do you sell goods or services? Will you be distributing the products worldwide from one location or will you have production facilities in various countries? Semi products must be assembled, products must be packaged, shipped and stored. Similar questions hold for after-sale services and remediation, or do you want to outsource that? How about end-user training? All of these issues depend on factors such as logistics, costs, product regulations, labour conditions, taxation, public perception and strategy.

Products (Goods) vs. Services
The distinction between "product" and "service" may not in all cases be that clear and may even not be the same in all countries. If you have a software product that you ship in large quantities to buyers, it are products (goods), but if you have agreed to develop a custom application with certain functionality to a customer it may very well be a service. This may have consequences for your contracts and the ownership of the intellectual property rights.

Legal & Regulatory
The above examples already demonstrate the influence on your legal position and that it requires a detailed and thought-through approach. In general, in the absence of a comprehensive international regulatory body, if you offer products or services via a Web site from one country to users in another country both national jurisdictions play a role.
This is a tricky area, as for instance information you are allowed to solicit or display in one country not necessarily is allowed to be displayed/used in (or even transferred to) another country. Issues like privacy, intellectual property rights, taxation and product safety (toys, food, pharma) play an important role.

A recent development shows limits on international operations. There already are countries which ban a large portion of the Internet pages, often as a form of censorship. As a more recent case take the example of certain companies who offer betting via the Web. As they had no license to offer betting in The Netherlands, as required by local law, by court order they had to make their Web sites unavailable for users in The Netherlands.

In the abovementioned example of the airline plane ticket prices, complaints received by the European Commission suggest "that people feel that they have been discriminated against when buying plane tickets. Airlines typically use the postal address or the credit card address to determine the residence of a customer. Depending on the country of residence they then may quote different prices." And in a recent document about protection of consumer rights, the Commission wrote that it had been receiving complaints [about] "insufficient information, .., confusion about tariffs, [and other] issues raised by disappointed and frustrated passengers."

During the coming months the commission will decide if further action is necessary to ensure consumer protection.

Legislation, regulation and taxation are very dynamic and the impact of (potential) changes on the profitability (or even legality) of your business can be tremendous.
To address these issues the best approach is to evaluate the changes on an ongoing basis through the use of proper legal counsel for all relevant jurisdictions.

Language
In an international context you must consider having also Web pages in other languages than English. Currently, a growing majority of the Internet users is not a native English speaker while about 2/3 of the Web pages is in English. Recently there was an increase of the number of pages in for instance Chinese, like with CNN, and the trend is that in the nearby future a growing part of new Web pages will no longer be in English.

Therefore, multiple-language Web sites become a must. In some cases this means translation, in other cases the text for each language version has to be drafted from scratch. Usually, a mixture of these two approaches will do. Once it has been decided that your audience requires significant information in its own language you can start building the content. If your Web site is extensive, you could start with three to five pages per language. There are companies which offer services to maintain Web pages in multiple language versions simultaneously.

Apart from the language issue itself, to communicate effectively on the Web one must observe a few rules for writing texts. Not only because the majority of the readers may not have English as first language but also because of the specific format and layout of Web pages. In general, these rules come down to "write simply and correct": short sentences (~ 15 words max), no clichés, be positive and make sure the text is free from typos and grammatical errors. Writing for the Web is an art in itself. Therefore, it may be a good investment to hire a professional Web writer/editor to build the basis of your Web content.

Culture
Local culture, as an extension of the language and legal dimensions, sets the expectations for your international marketing campaign and determines the degree of localization your campaign requires. The significance of this depends on your product or service and on its market characteristics.

Consumer behaviour (incl. email usage) differs between countries and also between B2B and B2C. Here the costs of connection and the state of the infrastructure plays a role. Another factor of relevance is that there is no country where the acceptance of credit card payments is as great as in the US. It also varies between countries how people perceive the security of credit card payments via the Web.

International branding is an area of increasing importance—a strong brand is an asset in itself. Certain brands (like Coca-Cola) have become so strong, that the product seems to have become less important than the experience. In order to be successful in this area, the branding strategy must be part of the overall corporate strategy. It also must take into account all relevant language and culture issues in order to avoid errors that easily can destroy a reputation.

Operations
The network infrastructure also will be different between countries, which on its turn will depend on the way population centres and industrial areas are spread across a country. As an example, short message service (SMS) is very popular in Europe and Asia. In Japan wireless communication is much more common than elsewhere.

Search Engine Marketing (SEM)
The increasing number (both relative and absolute) of Web site visitors with another language than English as their native language means that the use of non-English search engines will increase. Therefore Web pages must be optimized also for the most relevant ones of these non-English search engines: i.e. non-English versions of the well known U.S.-based engines like Google and Yahoo! as well as local search engines.

Traffic
Some of the issues above directly or indirectly influence the number of visitors on your Web site. Creating the right content, taking into account cultural and regulatory issues, etc. is critical in attracting enough visitors. Although specialized agencies can help with that, it is not the sophistication of the Web site that matters here but clear and good content plus a customer-centred handling of interactions through all touch points.

Risk
As an entrepreneur you want to be successful and everything described above may have been taken care of properly where required, including an evaluation of your legal position. But in the end it comes down to whether or not you get paid for the goods or services delivered. Ensure that both the delivery and payment arrangements you envisage are adequate and robust. Will the (foreign) customer get what he (she) ordered and does he pay and can he pay?

And even if the customer does pay, there may be local regulations or taxation issues that keep part of your money (temporarily) out of reach.

A risk assessment should address these issues and cover also for a/o the currency risk.

The Way of the Web
By starting a global E-business it will change the perception of your customers and of your suppliers. The nature of doing business will change dramatically. It will open the door to real-time customer-centric business, which requires a totally different attitude (relationship building), operations & IT, as well as accounting model.

The Web can be one source of further guidance and advice in this. But it is a challenge to sift the wheat from the chaff. Also consult other sources like (local) organizations in your sector of industry or government advisory agencies.

By exploiting to the fullest the possibilities of the Internet you have an opportunity to service more customers better and in a totally different way, a way which requires adequate and ongoing navigation to respond to the new challenges. Through this you can know your customers better than the competition, for your customers determine who wins the competition, your competitors don't!

Despite that there seem to be much more stories about failing Internet companies, I am convinced that this new way also can be to the benefit of your customers (prospects) and therefore to the profitability of your entrepreneurship.

Success,

Edwin