Beach-Head Accounts Matter
Market Segmentation differences and beach-head accounts matter for successful entry to the US market.
Australia and the USA look about the same size on the map but, from a market segmentation viewpoint, there the similarity ends.
Australian B2B companies can focus most of their efforts on two cities, Sydney and Melbourne, and will thus have covered the major HQs of target large corporations in Insurance, Banking and Telco as well as Healthcare Insurers. The airline traffic between these two cities is one of the heaviest of any route in the world and so business can efficiently cover the majority of the market with that focus. Also, because the Australian market is so small relative to the USA, Australian companies are used to covering many vertical segments to ensure they do not run out of market growth opportunities.
However, when Australian B2B technology companies evaluate the USA as a go-to-market opportunity, they will find there is a very different geographic spread of cities and vertical market segments. Without disciplined analysis, the temptation is to try to “boil the ocean”.
Because the Australian new entrant to the US market is likely to lack a US brand presence and value proposition, it is important to identify where you have a great reference base in Australia. It should be with an organization in your strongest vertical market, of sufficient scale and success with your product and services, that when it comes to a reference check by a potential US beach-head account, that this case study and its business value analysis will stand up to scrutiny.
This was true for Enlighten, where they used SunCorp as a strong Australian reference to help win Farmer’s Insurance and DST Systems then Axa. For Panviva, they used Medibank Private and Bupa in the UK as references to help win the first US Blue Cross account. They went on to add a number of US health insurers as clients.
Once these initial accounts were won and successful, they became beach-head references for additional accounts to be targeted in the same segments.
In the USA, picking a vertical market where you are strong in Australia, then winning a USA beachhead reference account for that vertical, is a proven market-entry strategy.
Having sufficient funding to see the campaign through to initial success is also important. Trying to tackle too many verticals, in too many cities can burn a lot of cash and fails to take into account the need to be reference-able within the USA before scaling up the expansion campaigns.
In recent years I have seen some very well-funded European B2B software players burn through a lot of cash and churn many sales managers because they failed to nurture these beach-head reference accounts first, before scaling and were too “shotgun” in their account target selection.
