How to succeed with geographic expansion as a B2B SaaS company

Are you considering expanding to a new market? Geographic expansion can be a major driver to achieving ambitious growth goals. In Viking Venture, many of our portfolio companies are strong in their home market at the time of investment, but have clear ambitions to expand into the Nordics, Europe, or the USA. However, for a geographic expansion to be successful, it requires a deep understanding of local market differences, solid planning, and execution – and adaptability. In addition, the approach to market entry will differ based on the company’s overall strategy.

Written by: Andreas Sandbu, Senior Investment Manager at Viking Venture

Different Viking Venture portfolio companies have applied various approaches to geographic expansion. Some grow organically by establishing a physical presence, while others enter a new market through mergers and acquisitions (M&A). A few also sell directly or through partners to international markets. This article will focus on the first: growing organically by establishing a physical presence in a new market. Here’s your guide on how to be successful with geographic expansion in Europe as a B2B software-as-a-service (SaaS) company.

The 4 steps of geographic expansion

In a previous article, we elaborated on choosing the right growth strategy for where to play and which markets to prioritize. In this article, we focus more on what steps to consider when you have decided what markets to expand to:

1. Understand the local market
2. Make local adaptations to product and content
3. Build awareness and generate leads
4. Establish credibility and set up on-site operations

Phase 1: Understand the local market

When entering a new market, it’s crucial to have a clear strategy and approach. The first step before entering a new market is to conduct thorough research. Your research should focus on the market size and growth, your competitors’ positions, and their unique value propositions, your customers preferences, and specific regulatory requirements. This understanding will help you identify gaps and opportunities, allowing you to position your SaaS offering effectively.

For concrete examples of performing the research, you can check out our article on growth strategies or download our strategy playbook. 

Develop an ideal customer profile for the local market

Local variations in culture, language, and regulations are prevalent across Europe and the different statues in the USA. It’s important to adapt your offerings based on the specific needs of your new audience. Understanding the local ideal customer profile (“ICP”) is essential for creating personalized solutions and communication that resonate with potential clients. You will need to refine your ICP based on the local market.

Conduct desktop research and stay informed

Stay ahead by continuously monitoring market trends, regulatory changes, and technological advancements. Regularly update your knowledge through desktop research to ensure your strategies remain relevant and adaptable to the dynamic European landscape. Key elements to understand are customer segments and attractiveness of specific customer needs, competitor dynamics, and regularity requirements.

Get on the ground and attend industry events

There’s no substitute for firsthand experience. Attend industry events, conferences, and trade shows in the region to build connections, gain insights, and foster relationships with potential clients and partners.

Phase 2: Make local adaptations to product and content

When you have done the necessary research and clearly understand the local market you are entering, you can start preparing for the next step of geographic expansion. Your products, website, content, and support must meet your target audience’s expectations. What is the preferred language in your new market, how should you communicate, and what is your Go To Market strategy to scale? Here are some adjustments and considerations to prepare before your expansion.  

Make necessary local adjustments to the product

Customize your SaaS offerings according to local preferences and regulatory requirements found in the research phase. Flexibility in adapting your product demonstrates your commitment to meeting the unique demands of the local market. These adaptations could include specific must-have integrations (e.g. to ERPs) or features required in the local market.

Tailor content to the local market

Build a localized website with language, imagery, and references that resonate with the local audience. A user-friendly, culturally sensitive website enhances your company’s credibility and fosters trust among potential clients. Translate and adapt your content to the local language, incorporating specific terminology and cultural references. Tailored communication helps your brand connect with potential local customers on a deeper level.

Ensure systems support the local market

Integrate your CRM (e.g. Hubspot) and analytics tools to capture and analyze data relevant to the specific European market. Proper tracking and analytics enable you to make data-driven decisions and refine your strategies effectively.

Establish a local presence with a lean satellite office

A lean satellite office facilitates better communication, collaboration, and customer support. Having a local team ensures prompt responses to client queries and concerns, building trust with your local customer. To succeed you need to send you best people. In our experience, sending a full team capable of finding, selling to and onboarding the first customers gives the best payback on your investment.

Phase 3: Build awareness and generate leads in a geographic expansion

You must build awareness around your brand and solutions when entering the new market. There are different approaches to creating digital and physical visibility. Here are some strategies to get you started: 

Optimize search engine presence and advertising

Invest in localized search engine optimization (SEO) and online advertising strategies. SEO ensures your company appears prominently in local search results, increasing visibility among potential clients seeking your services. Continuously monitor your efforts and test different types of communication and ads. The ad performance and spending can differ significantly from one European country to another.

Producing high-quality videos can also help you appear more polished and established than you are. Using local customer testimonials, you can show how you have helped customers with similar challenges to get value from your solution.

Engage in local workshops and conferences

Participate in or host industry-specific workshops and seminars. Such events provide a platform to showcase your expertise, interact with potential clients, and establish your company as a thought leader and authority in the European market. Sponsorship and exhibition opportunities at relevant trade events and conferences offer unparalleled visibility. Engage with attendees, showcase your products, and leverage these events to generate leads and foster business relationships. Be on the stage!      

Phase 4: Establish credibility and full physical presence

The last step in your geographic expansion is showing commitment to your new market. As described in the introduction, you can enter a new market in one of two ways: organic or inorganic. Organic expansion involves entering the market with your existing or newly hired sales staff and growing through organic customer acquisition. Inorganic means entering the market by acquiring a local company operating within the same or adjacent space as yourself. As previously mentioned, we’ll elaborate on the organic approach below. 

Establish an office and hire sales and support personnel

A physical office presence in your new prioritized geography demonstrates your commitment to the market. Willingness to transfer key resources and high-performing salespeople from your home office to to the new market will allow your company to win faster in the new market. Having “home grown” people in place to will also ensure that locally recruited talents learn your organization’s best practices from the get-go. In our experience, sending a full team capable of finding, selling to and onboarding the first customers gives the best payback on your investment. At the same time, local sales and support people understand the nuances of the culture and can effectively engage with clients in their native language. 

Attensi is one of our portfolio companies, which has had great success expanding to the UK and the US. You can learn about the ten most valuable lessons from their expansion here. 

Position yourself as a leader in peer reviews and credible sources

Encourage satisfied clients to leave positive reviews on credible platforms. Positive testimonials and peer reviews enhance your company’s reputation and credibility, instilling confidence in potential clients in the new market.

Obtain necessary approvals or accreditations

Compliance with local regulations and industry standards is important. Obtain necessary approvals and accreditations, showcasing your commitment to quality and adherence to European standards, thereby gaining the trust of your clients.

Successful geographic expansion in Europe 

In conclusion, successful international expansion for a B2B SaaS company requires a strategic, customer-centric approach. By thoroughly understanding the local market, adapting your strategies, building awareness, and establishing a credible physical presence, your company can navigate the challenges of the European market. With careful planning and a commitment to understanding and respecting local cultures, your B2B SaaS company can achieve sustainable growth and success in Europe. In our following articles on international expansion, we will give more concrete tips on how to enter the UK and the DACH market. Subscribe to our newsletter to stay updated.