Simple recipe for export marketing success

Good export marketing is actually more about being thoroughly-researched, planned, process-oriented and measurable. This is backed by a study of the sales and marketing activities of New Zealand’s hi-tech companies, released in early October.

Market Measures is an annual survey that assesses all aspects of how innovation-based businesses take their products to domestic and international markets. Produced by Concentrate, in conjunction with fellow Kiwi tech marketing company Swaytech, Market Measures is sponsored by business advisers PwC.

The ‘secret sauce’

While the study gathered a broad range of data, the most exciting insights it offers are what marketing ingredients are likely to produce high growth. By correlating a set of marketing variables against the companies growing the fastest, four clear themes emerged.

 
The first is focus. Companies that grew the fastest were much more likely to have a lower number of core products and services, sold into a lower number of industries than the average (25 percent less products and 35 percent less industries). They could concentrate limited resources on a fixed market opportunity, gaining more intensity with their sales and marketing.

Second is market knowledge. Companies that rated themselves strongly on the ability to research and learn key aspects of their target markets, tended to have higher growth figures. Having clarity around the markets they were entering enabled these companies to make better decisions about key issues like how to price, who to partner with and what kind of buyers to target.

Partnering is the third theme. High growth was associated with using a partner in both local and export markets, interesting given that overall only a minority of respondents used distribution channels.

Last is promotion. Basically, any promotion is good promotion. All promotional activities tended to be associated with good growth, with a couple of particularly effective areas: spending on public relations, direct calling programmes (e.g. telemarketing) and using social media effectively, especially having a blog and using social professional networks (such as LinkedIn).

Failing at scaling

So who participated in this study? 158 companies completed the online survey, across tech sectors including software product development, IT design, consulting and development services, electronic devices and equipment (76 percent of respondents).

Auckland, Canterbury and Wellington were the most common locations (94 percent of respondents), and companies included start-ups through to established companies.

Turnover and age statistics suggest we continue to struggle with building international technology businesses of scale and substance. Only 15 percent of companies earn over $10 million with a long tail of companies earning under $1 million (38 percent).

There were also some real positives to come from the survey. Turnover increased by an average of 48 percent across the board, up 8 percent from the previous year, and exports were also up 8 percent, with 85 percent of all companies selling offshore.

Expenditure on sales and marketing (staff costs and direct expenses) has softened a little, likely to be a lagging effect of the global financial meltdown that hit many markets in 2009 and 2010. It remains broadly consistent with international benchmarks.