Five Major Mistakes When U.S. Companies Go Global
By Guest Contributor, Philip Auerbach, President of Auerbach International Inc.
With two oceans on both sides of U.S., an enormous domestic market and another English-speaking country to our north, many American firms forget that expanding overseas is a great way to increase their revenue. But global expansion has to be done correctly and guided by professionals who are experienced and knowledgeable.
Below are five common mistakes that U.S. firms often make. These also can be prevented if companies do their homework.
1. Not localizing your website
Around 72 percent of the world and at least two thirds of world Internet users do not speak English. Yet almost 60 percent of world websites are in English only.
In a research study quoted by Appia, while English campaigns had an average click-through-rate of 2.35% and a conversion rate of 7.47%, the localized [translated] versions saw click-through rates of 3.34% – an increase of 42% and a 9.08% conversion rate – a 22% lift over the English campaign.
Whether your business is B2B or B2C, most people prefer to read about your firm in their language, not in English. Localizing some or your entire site is a very minor investment with very major revenue returns. And if prospective customers call to talk to you, through a professional language agency’s telephonic interpreting service (such as ours), you can also talk to them 24/7 in many hundreds of languages.
2. Assuming that U.S. methods work abroad
Do not go into any foreign venture assuming that you can do business in your host country the way you do it here. Most of the time, it will not work.
Egalitarian American executives often assume that all employees are part of the team and that good ideas can come from all levels of the hierarchy. But hierarchy is a relative term with strict connotations.
In India, for example, executives should not be seen inquiring too much into the lives of their secretaries or staff, whereas in other countries such as Japan, senior executives take on a paternalistic role toward employees’ families (giving personal advice, being invited to children’s milestone events or employees’ weddings, etc.).
Similarly, while U.S. advertising often focuses on making or saving money, other cultures’ ads promote your product’s benefit to the family, to children’s education, to safety, to the environment, to company longevity and reputation, and other appeals. When you understand the values of your target country or region, you can tailor your messaging accordingly.
3. Forgetting to verify whether U.S. product or company names will work in other languages
Among the most fundamental, cheapest and easiest functions of going global is to verify whether your company and product name works in other languages.
You probably know the “Nova” story from decades ago: When Chrysler introduced the Nova car in Mexico, they did not realize that No va in Spanish means “does not go”, which obviously is a terrible name for a car.
Similarly, when Cue toothpaste was introduced in France, Colgate did not realize that Cue was already the name of a French porno magazine.
And “Colga te” in Argentina and Uruguay means “hang yourself.”
In short, verifying whether your name has a negative meaning or connotation is extremely inexpensive insurance that a professional language agency can implement in all major languages. And this should be done at the very start of the process, not millions of dollars after the fact.
4. Ignoring cultural issues
Among the most common mistakes Americans make is to plunge into business matters at the first meeting or conversation with your overseas counterparts. That works here, where perfect strangers connected only by phone or email at the other end of the country will purchase from you based on your website or quote.
But in most of the world, people want to get to know you first. Relationships are more important than instant revenue. Your first conversations might talk about art, music, sports, literature, theatre, movies, books and families. In short, most any subject except business.
Only after building rapport and establishing trust will most foreigners consider doing business with you. And that process can take many meals or even many visits before business is broached. And of course, your foreign counterpart will check you out on Linked In, Facebook and other Internet and private, back-channel sources to ensure that you are reliable, solvent, responsible and trustworthy.
Your attire and manners are also very important. If your industry’s office attire is blue jeans and T-shirts, obviously you should conform. But in most cases, you should wear neat, clean, professional clothing. Usually dressing conservatively is best at first. Many foreign cultures size you up based on your clothes, manners and how you present yourself.
Similarly, dining manners are important. Europeans do drink wine (or sometimes beer) with a business lunch, a practice that is frowned upon in the U.S. You too can join in as long as the alcohol does not dull your senses. Asia and the Muslim world serve tea. And you are expected to drink many cups.
If you are unsure of dining etiquette, please contact us for some excellent resources.
5. Acting informally and relying on English
Americans, especially Millennials, assume that it is perfectly natural to call perfect strangers by their first names. But in the world of international business, don’t even think about it. Only countries such as Australia, New Zealand, Israel, and possibly Canada join the U.S. in presuming that informality breaks down barriers. Elsewhere, informality connotes impoliteness.
In most of the world, status, hierarchy, titles, degrees, reputation and family longevity are highly valued. You should always refer to a person by his title (the equivalent of Mr., Ms, Mrs., Dr. or Professor) unless and until you are told not to. Exceptions arise in industries such as IT and sports where youth predominate. But if you meet someone older, always defer to formality first using the person’s title and last name (Señor Fernandez, Madame du Pont, Herr Schmidt, etc.) From there you can become informal. But if you start out informally, you cannot revert to formality.
Similarly, don’t assume that everyone speaks English. Many foreign executives have studied it but that does not mean they speak well or feel comfortable using it. If you know for certain that your counterparts do not speak English or don’t speak English well, always ask your U.S. professional language agency to find you an in-country interpreter. Never rely on your counterparts to provide one. That interpreter may feel loyal to the company paying his or her bill, and conveniently forget to convey information that happens to be important to you but can be detrimental to your hosts.
I personally experienced this in Tokyo where I was sitting in on negotiations between an American CEO and a Japanese CEO and his team. The Japanese side did not realize that I could speak some of their language. During a break I informed the American that the Japan side’s interpreter when speaking English had left out some important details that gave an extra advantage to the Tokyo company.
As with any new experience, working and selling abroad can be frightening or exciting. Once you learn the basic rules and some in-depth customs, your venture is likely to succeed. But just as you would not entrust your broken car to your dentist for repair, always rely on professionals who can guide you through the process.
About the Author
Philip Auerbach is President of Auerbach International Inc., a global marketing consultancy and award-winning language agency. Since 1990, they have put all kinds of content – websites, manuals, books, guides, PPTs, conversations, etc. – from or into 80 languages using professional linguists, and have helped U.S. firms successfully navigate overseas expansion.