In-Market Sales vs. Remote Teams and Distributors
In today’s globalised economy, expanding into international markets is a key strategy for B2B manufacturing companies seeking growth and increased revenue.
However, deciding the optimal sales approach for each market can be challenging. While remote sales teams and in-market distributors offer cost-effective solutions, evidence suggests that markets with dedicated in-market salespeople often significantly outperform those relying on alternative sales models.
This post delves into the critical factors to consider when making this decision, providing a comprehensive framework for evaluating the potential benefits and costs of hiring an in-market salesperson for international expansion in the B2B manufacturing sector.
Effectiveness of In-Market Salespeople vs. Remote Teams and Distributors
As the business world becomes increasingly interconnected, many companies are adopting remote work models1. However, certain industries and roles, such as B2B manufacturing sales, still benefit significantly from in-person interactions1. In-market salespeople can build stronger relationships with clients, better understand their needs, and navigate cultural nuances more effectively2. This direct engagement fosters trust and leads to increased sales effectiveness.
Modern B2B sales often involve personalized outreach, leveraging social networks for prospecting, and utilising online intelligence for research3. In-market salespeople are well-positioned to excel in this environment, as they can engage in face-to-face interactions and build rapport with clients3.
Conversely, remote sales teams may face challenges in establishing rapport and trust with international clients due to the virtual barrier2. They may also struggle to grasp the specific needs and preferences of clients in different markets and may find it difficult to provide the right content to engage customers effectively4.
Distributors, while offering local market knowledge, may not prioritise your company’s products or possess the same level of product expertise as a dedicated salesperson5. They may also have existing relationships with competing manufacturers, potentially hindering your market penetration5. Furthermore, studies have shown that distribution sellers often lag in key selling competencies compared to salespeople in other industries6.
It’s worth noting that the trend towards remote work is not limited to B2B manufacturing. In the SaaS industry, for example, the number of salespeople working remotely at least part of the time increased significantly in recent years7. This highlights the growing acceptance of remote work across various B2B sectors.
Cost Analysis: In-Market Sales vs. Remote Teams and Distributors
Hiring an in-market salesperson involves costs such as salary, benefits, travel expenses, and potentially setting up a local office8. While the initial investment may seem substantial, the potential for increased sales and market share can outweigh these costs9. However, it’s crucial to consider the potential costs associated with a bad sales hire, which can include recruitment costs, lost sales due to unmet quotas, and even damage to client relationships10.
Maintaining a remote sales team can be more cost-effective in terms of salary and office space11. However, hidden costs such as training, digital infrastructure, and potential productivity challenges should be considered12. Remote workers may take longer to reach full productivity compared to in-market salespeople12.
One advantage of remote teams is the speed and scalability of hiring. Platforms offering video profiles of candidates enable companies to screen and interview top talent quickly, significantly reducing the time-to-hire compared to traditional in-house hiring processes13.
Distributors typically operate on a commission basis or utilise a markup-based pricing model, which can reduce upfront costs14. However, relying solely on distributors can limit control over sales strategies and brand representation15.
To provide a clearer comparison of the costs associated with each sales model, consider the following table:
| Sales Model | Salary & Benefits | Travel & Expenses | Infrastructure | Other Costs |
|---|---|---|---|---|
| In-Market Salesperson | Salary + benefits + potential relocation costs | Travel expenses, including flights, accommodation, and local transportation | Office space (if applicable), equipment, and communication tools | Training, potential costs of a bad hire (e.g., lost sales, damaged client relationships) |
| Remote Sales Team | Salary + benefits | Minimal, potentially some travel for team meetings or client visits | Home office setup for each team member, communication and collaboration tools | Training, digital infrastructure, potential productivity challenges |
| Distributor | Commission or markup-based fees | Varies depending on the distributor’s agreement | Typically borne by the distributor | Limited control over sales strategies and brand representation, potential for competing priorities |
It’s important to remember that these are just some of the typical operating costs for a B2B company. Other expenses to consider include software subscriptions, employee salaries, and marketing costs16.
With regard to Polish businesses the wages for sales people and the bonuses will vary wildly from company to company. But according to talent.com the average sales representative, would earn between 5,000 and 9,000 pln per month. A sales manager will take home according to glassdoor, up to around 15,000 pln a month. These will come with varying bonus schemes from none through to uncapped commission based on sales. Western European Markets, a sales representative with market experience would be closer to a sales manager in Poland and a Sales Manager would be around the 20,000 pln a month mark, with some much higher.
Sales Performance Metrics for B2B Manufacturing Companies in International Markets
Measuring sales performance is crucial for evaluating the effectiveness of different sales models. Key metrics for B2B manufacturing companies in international markets include:
- Revenue Growth: Tracking revenue growth year-over-year provides insights into the overall sales performance in each market18.
- Lead Conversion Rate: This metric measures the efficiency of converting leads into customers, reflecting the effectiveness of sales strategies18.
- Customer Acquisition Cost (CAC): Analyzing CAC helps determine the cost-effectiveness of acquiring new customers in different markets18.
- Customer Lifetime Value (CLV): Understanding CLV helps assess the long-term profitability of customer relationships in each market18.
- Average Deal Size: This metric provides insights into the value of deals closed in different markets, reflecting the effectiveness of sales negotiations18.
- Sales Cycle Length: Analyzing the sales cycle length helps identify potential bottlenecks and optimize sales processes in different markets18.
Market Conditions in International Markets
Expanding into international markets requires a thorough understanding of the specific market conditions, including:
- Cultural Differences: Cultural norms and business practices vary significantly across countries. Adapting sales strategies to local customs is crucial for building trust and rapport with clients19. For example, while many countries have embraced virtual sales models, South Korea and Japan still show a strong preference for face-to-face meetings in business20. This highlights the importance of understanding cultural nuances when developing international sales strategies.
- Language Barriers: Effective communication is essential for successful sales. Overcoming language barriers may involve hiring local sales representatives or providing translation services19.
- Regulatory Environment: Different countries have unique regulations and legal requirements. Understanding and complying with these regulations is crucial for successful market entry19.
- Economic Conditions: Economic factors such as inflation, currency exchange rates, and market growth potential can significantly impact sales performance21.
- Competitive Landscape: Analyzing the competitive landscape in each market helps identify opportunities and challenges, allowing for informed sales strategies22.
Product Suitability for Different International Markets
Assessing the suitability of your products or services for different international markets is crucial for successful expansion. Factors to consider include:
- Product Demand: Analyzing market demand for your products or services in each target market helps determine the potential for success23.
- Product Adaptation: Adapting products to meet local preferences, regulations, and technical standards may be necessary for optimal market penetration24.
- Pricing Strategies: Developing appropriate pricing strategies that consider local market conditions, competition, and customer expectations is crucial for profitability23.
- Distribution Channels: Establishing effective distribution channels that align with local market practices and customer preferences is essential for reaching target customers23.
- After-Sales Support: Providing adequate after-sales support that considers local language and cultural factors can enhance customer satisfaction and loyalty23.
Decision-Making Framework for Hiring In-Market Salespeople
Based on the factors discussed above, the following framework can guide your decision-making process for hiring an in-market salesperson in each international market:
1. Market Potential:
- Analyze market size, growth potential, and demand for your products or services23.
- Assess the competitive landscape and identify potential challenges and opportunities25.
- Evaluate the regulatory environment and any potential barriers to entry25.
2. Sales Model Comparison:
- Compare the potential effectiveness of in-market salespeople, remote teams, and distributors in each market.
- Consider the cultural factors, language barriers, and communication challenges associated with each model.
- Analyze the cost implications of each sales model, including salary, benefits, travel expenses, and infrastructure costs.
3. Product Suitability:
- Assess the suitability of your products or services for the target market, considering potential adaptation needs.
- Evaluate pricing strategies and distribution channels that align with local market conditions.
- Determine the level of after-sales support required in the target market.
4. Sales Performance Metrics:
- Establish clear sales performance metrics for each market, such as revenue growth, lead conversion rate, and customer acquisition cost.
- Develop a system for tracking and analyzing these metrics to evaluate the effectiveness of your sales approach.
5. Risk Assessment:
- Identify potential risks associated with hiring an in-market salesperson, such as cultural misunderstandings, regulatory challenges, and economic instability.
- Develop mitigation strategies to address these risks and ensure a smooth market entry.
6. Decision Rubric:
- Create a decision rubric that assigns weights to each factor based on its importance to your business objectives.
- Use the rubric to evaluate the potential benefits and costs of hiring an in-market salesperson for each international market.
Conclusion
Expanding into international markets presents significant opportunities for B2B manufacturing companies. While remote sales teams and distributors offer cost-effective solutions, dedicated in-market salespeople often drive superior results due to their ability to build relationships, understand client needs, and navigate cultural nuances.
By carefully considering the factors outlined in this report and utilizing the decision-making framework, B2B manufacturing companies can make informed choices about the optimal sales approach for each international market, maximizing their chances of success and achieving their growth objectives.
In markets with high growth potential, strong product demand, and where cultural factors favor in-person interactions, the benefits of an in-market salesperson are likely to outweigh the costs. Conversely, in markets with lower growth potential, limited product demand, or where cultural factors favor remote interactions, a remote sales team or distributor may be a more viable option.
Ultimately, the decision should be based on a thorough assessment of the specific market conditions, the company’s resources and capabilities, and the desired level of control over sales activities and brand representation.
Breaking into international markets requires more than strategy—it demands the right people to execute it. Whether you need in-market sales experts to build trust and relationships, or remote teams to scale operations cost-effectively, we specialize in finding top-tier sales talent to match your goals.
- Access Local Expertise: We recruit experienced in-market sales professionals who understand cultural nuances and drive results.
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Don’t leave your global expansion to chance—partner with us to recruit the talent you need to succeed. Contact us today to start building your international sales dream team!
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