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Our clients are IT companies who have proven their concept on the home market and is taking the next step in building a scalable business model. Many software companies are moving towards Software as a Service (SaaS) model and have successfully managed the transition of delivering their products as a service over the Internet but are still fighting to build a scalable sales engine to support the growth targets.

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Most of our customers are software companies or companies who deliver a service over the Internet. We have developed a full checklist to evaluate how well potential clients fit a scalable multinational sales model. But we found that we only need to look at two main areas: 1) The complexity of product delivery and 2) the scalability of the sales model.

If the product has to be installed physically in the end customers IT environment, configured or even integrated with other applications or systems the product delivery might require onsite assistance. In these cases we are talking about a complex installation and the ability to scale is depending on the number of consulting resources available in each market. If the product on the other hand is delivered as a service over the Internet, pre-installed and easy to use (like SaaS) it is fairly easy to scale the number of customers.

In order to sell some products onsite sales meetings or even a number of meetings including technical staff and lots of preparations are required to close a deal. When expanding into new markets you need to replicate this expensive sales model and build national sales teams for each market. Other products having a clear customer value proposition are easy to understand and can be sold over the Internet using a multinational sales model.

All products can be evaluated and positioned on a scale somewhere in between the above extreme situations. By combining the two dimensions we get a map of the product market scalability, we call this the “Proaxis Market Expansion Matrix”. Each product can be positioned in this matrix based on an evaluation of the current situation.

The Proaxis Market Expansion Matrix:

Different market approaches should be selected depending on how the product is positioned in the matrix. For products that require a complex installation and is difficult to sell you need to replicate a setup close to what you already have on your home market and the expansion will be county by country and very costly.

For products that are easier to sell but still need onsite installation it would be a good idea to start by engaging local partners who can do the installation and configuration at the customers site. Our experience does however show that you need to take charge of the sales process in order to get reasonable growth rates. Proaxis have experience in identifying and creating interest with potential partners on new markets and/or assist in creating, developing a qualifying leads for either the vendor itself or the local partner.

We have come across a couple of companies who has an easy to install and easy to use product but it is very complicated for them to sell the product. These companies have all had serious problems getting into a profit situation and we believe that they ought to consider a change in strategy. They could try to simplify the sales process themselves or work with partners who will benefit from using the product in selling their own service.

For standard products easy to install and with a compelling value proposition a multinational sales model can be developed. Companies with products in this area, that has not yet built an international business, has an unreleased market potential. Time to market and cost of sale is usually the most important factors for scaling the business. Most companies with interest for the Proaxis sales model has products in this quarter.