There is a temptation to propose a low salary with a juicy commission plan.  But when you are entering new foreign markets, this is not usually a good option if you are serious about developing your international business.

The main problem is that commissions are based on percentages and numbers.  When entering a new market it’s hard to come up with good numbers.

But that’s not all. There are a few things that come into play related to the international aspect of these sales. Here are two of the differences you need to take into account when coming up with a good compensation plan to drive sales performance in a new foreign market.

Your Sales Person Wears Many Hats

It’s true in all markets that salespeople where many hats, but when selling to new international markets your salesperson also has to adapt your sales and marketing tactics to a different culture.

Whether your salesperson is from the local market or is from your home country, he still goes through a period of adapting to being the connecting point between two different cultures.

Most companies find they need to adapt their original sales and marketing tactics when they first start selling in a new country.  There is almost always some adaptation needed to come up with a good sales strategy.

This takes time.

And it also takes teamwork with the home office.  This means he’ll spend more time wearing different hats than if he was selling to a market feedback cultural adaptation.

This takes up even more time.

And the trouble is: no one can really estimate just how much time this will take until you have been selling to your new international market for a while. You want to make sure you have the right person doing the job for you.

Cultural Differences In Compensation

Given that he already has so much to do, you have to make it easy for your salesperson to fit in well within his environment. Different cultures have different sales practices and you need to make sure your compensation plan works well to drive sales in this environment.

There are many different types of cultural blunders linked to expecting one sales compensation plan that works in some countries to work well in other countries.  And it’s not only a question of knowing where bribes and where they are illegal.

• There are countries where commission-only based sales do not work well simply because the legal system does not make it an attractive or easy set up to work with.
• There are countries where not having a company car is not a good sign.
• In some countries payment of overtime is expected and in other countries there is a certain level of tolerance for non-payment.

Even if you think compensation information is between you and your salesperson, the other people he comes into contact with will probably notice any different practices.  This includes your potential clients.

And this is where funny things can start.  People from different cultures can make wrong assumptions that impact how your company is perceived.  Salespeople who earn big commissions because they are successful are usually proud to show this in North America for example.  But this is not the case in other countries.

Two Step Approach

You don’t want to create any cultural blunders when you first set up your compensation plans for the first salespeople you hire to open new international markets. This is why you will probably look at a two step approach. In the first step:

• Companies with little budget and only focusing on immediate sales will try a compensation plan based on large commissions or a commission-only plan… in markets where the legal system makes this easy to do.

• Companies focusing on sustained international business development will invest in a salesperson capable of wearing many hats and helping them adapt to a new market. They will probably pay him a fixed salary and maybe a smaller commission at the end of the year.

Once businesses become familiar with cultural differences in what works in driving more sales, they can evaluate how best to set commissions and sales targets for an all round win-win situation.

I’ve worked for a few North American companies setting up European offices to develop more European sales.  There was never a sophisticated commission plan to begin with and targets were only set as guidelines.

There was always a good level of flexibility in the first 2 years.  This was the average length of time needed for the North American home companies to learn about their new market, including how sales were made abroad and how to adapt to the differences.

But there were always weekly calls to a senior executive in the North American home office.  These weekly calls made it possible for North American management to stay current on all activities including actual sales results and expectations.

There is no best way to set up commission plans and targets for all new foreign sales offices.  You need to know the sales environment to learn what works best and this takes time.

But to be honest, North American sales and marketing professionals often amaze me by the level of sophistication of the methods they use. And this sophistication reminds me of the 5 levels of market awareness and sophistication I read in Eugene Schwartz’s Breakthrough Advertising.

Now, I realize the comparison is not a good fit once again, but I see quite a few sales people who get so caught up in their advanced practices that they forget the very basic ones on which they were founded. And thinking back to Eugene Schwartz, I keep wondering if the sophistication will get to a point where falling back to basics once again will be the fastest way to make sales.

This is why I want to share with you one particular international sales basic.

Busy People Rely On Solid Sales Basics

I’ve always worked in international business development outside of North America.  For people new to international sales this can seem like a complex environment.  And they are right, it is complex because there are so many variables to deal with.

The ability to capture and process multiple sources of information at the same time is a required skill in most international professions. These skills are critical in international sales. And you also need to multitask the processing of different decision variables at the same time.  International salespeople end up doing multi-layered mental multitasking to process all of the information. And this does not even include the other more visible signs of communication they need to do to carry out their job.

So… international sales people are very busy people.  They already have their mind on overdrive.

And they have no other choice but to rely on solid basics to help them get their sales job done.

Cultural Differences Require Solid Sales Basics

Another interesting facet of international sales is adapting to the different ways people do business.

International salespeople learn to be flexible and how to adapt to many different situations with one big difference.  They always have a very good grasp of sales basics.

These basic sales skills are the ones that become second nature and are the ones that enable them to do everything else required for the job.

Navigating Cultural Blunders With Solid Sales Basics

No matter where you are in the sales process there is always the possibility of a cross-cultural hiccup cropping up unexpectedly and ruining your sale.  And these things tend to happen when you least expect them.

The result is that this creates an environment with a certain degree of instability or uncertainty.

International salespeople learn to operate in this uncertainty.  And they find their way thanks to solid basics.

One sales basic in particular helps them to always do their job.

Solid Basic: Always Be Connecting With Your Market

And this one sales basic is founded on one particularity of international sales. The best international salespeople are also good at certain international marketing skills.  Their jobs depend on these marketing skills on two different levels.

• First, international sales people are usually the only people in the field and this field exposure is invaluable to a company.  International salespeople need to be marketing savvy.
• Second, it makes their job so much easier.  International salespeople need these marketing skills to do their job better.

Here’s the deal…

International salespeople always need to be connecting with their markets, prospects and all of their clients. All of the time.  This is what international sales is about.  They need as much information about their market as they can get in order to be a good salesperson.  So they are always connecting, prospecting, looking for ideas, looking for cultural differences, monitoring understandings. Talking to the people in their markets. And networking beyond their sales pipeline.

International sales are always made with people, and connecting with people from different cultures:

• Takes time
• Is a minefield of potential cultural blunders

This means there is less certainty in your sales projections. And the result is that you always need to sow the seeds for sales and you always need to be proactive in learning more about your market.

When you are in international sales to open new foreign markets 3 months is extremely short.  Of course it depends on your market, but you can easily need to spend twice and three times as long to cultivate any cross-cultural sales. Cultural differences bring up extra hurdles and also make it longer to build trust and easier to lose that trust. Sales cycles are longer when you open new markets.

In international business you learn to always connect with your market and to keep this connection active.  Because if you let this connection down for the end of year holidays for example, the challenges of cross-cultural communication increases extra risk. Different cultures celebrate Christmas differently.  Some take time off and some don’t.

No matter how sophisticated your sales tactics and strategies are, you cannot let yourself become lulled into a sense of security and forget the basics. Your international sales depend on maintaining a connection with your market. If you forget this even for a short time you have two problems. First, there’s a very good chance it will show in your future sales. And second, it may take you  extra effort to get back to where you left off.

What do you think?

• Do you think this is something all sales people should keep in mind?
• Do you think salespeople need to always be connected with their market?
• How does a holiday month impact your future sales?

Please share your thoughts below.