Growing Globally From Local Beginnings

For a company of any size looking to grow outside its borders, a global strategy is important to get right.
Neil WilliamsSeptember 22, 2016
Growing Globally From Local Beginnings

For Intuit today, global sales are a small part of overall revenue. But as part of our shift to cloud-based services, the global small business market represents a big growth opportunity over the next decade. We’ve introduced our QuickBooks Online small business accounting software in France and Brazil this year after rollouts in Canada, the United Kingdom, India, and Australia. At a pace of one to two new markets every couple of years, ultimately we can see the ecosystem built out and integrated in 20 markets around the world.

Why global, why now? The growth plan aligns with our corporate mission and our business strategy. At the highest level, Intuit co-founder Scott Cook always talks about finding a big important problem you can solve well. We solve problems for small-business owners with solutions that are lightweight, easy to use, mobile-ready, and inexpensive. Millions of small business owners make up our addressable market outside of the United States, and it is largely unpenetrated by moderately priced accounting software.

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Additionally, the QuickBooks Online product is a global-ready platform. The bulk of the offering is the same worldwide, with localization such as currency and language translations sitting on top of the core code. This hasn’t always been the case. Years ago, our early efforts globally were hampered by problems inherent in the desktop software era, when releases outside the U.S. were typically a couple of versions behind. That made it hard to address bugs and provide customer support. An online product in the modern cloud era is eminently easier to maintain and update and provides a much better customer experience.

Neil Williams

Neil Williams Neil Williams, Millennials, Finance

So for us, the answer to “why global, why now” is that the opportunity in terms of the addressable market is in line with our mission and strategy as a provider of cloud software. For Intuit and any other company, what’s equally important is asking and answering another core set of questions to get growth right.

Planting the Seeds

One of our core financial principles is to grow revenue at double digit levels each year through customer acquisition. That’s important as we think about global growth because only about 5% of our total revenue is outside the U.S. We’re more focused on growing customers in the category than we are on monetizing in the short-run.

One question we wrestle with is whether or not we are investing enough. Investing for us means having the right products and services, first and foremost. After all, we don’t open stores or have a feet-on-the-street sales force. We have a small team of engineers in each market that localizes the product and makes it easy to use — a scrum team in every country that builds out the last mile of the product.

Customers in our target markets globally are keen on products that look like they are built for them. A cloud-based product allows you to focus engineering efforts on those things that affect the customer. For QuickBooks Online, that includes elements such as compliance, electronic reporting, and local tax rates.

Another form of investment includes being patient in waiting for profitability and revenue outside the U.S. as we grow our customer base in new markets. We also focus on market share, assessing our competitors in each location, and making sure we are delivering high-value customer benefits better than the local alternative. We have a goal of maintaining a 10-point advantage vs. the next best alternative in Net Promoter Score, a measure of whether someone would recommend our product.

As we assess market share, we ask ourselves benchmarking questions such as: At what point is the share big enough to really justify and support global marketing, business development teams, and getting exposure with the accountant community?

At every step along the way, it’s critical to keep in mind that you are at the beginning of your global journey. With that in mind, these are things to consider to ensure a global strategy develops strong roots:

  • Be in it for the long term. Going global and expanding outside of the company’s home market is a long-term proposition. It’s tempting sometimes to pour resources into investment or market engagement. But if you expect a lot early on, you’ll likely be disappointed.
  • Recruit your team locally. It is important to have people working in the local market who are natives. One of the lessons we have learned along the way is that you can’t just export managers from the U.S. to foreign markets. It’s critical to have national leadership who know the markets and can help you navigate, and it’s best if you have a sprinkling of both.
  • Measure your progress. Metrics such as Net Promoter Score and market share are good indicators that you are going to build a strong business long-term. In a country the size of France, for instance, that might mean getting 20,000 to 30,000 paying subscribers to establish a critical foothold to begin to do some mass media advertising, sponsorships, and marketing.
  • Be willing to adjust strategy based on events, but don’t over-react. The “Brexit” referendum in the U.K. rattled the global business community initially; until more understanding set in that there would be plenty of time to adjust. There’s a good lesson beyond that one event. Monetary policies change. All countries go through periods of expansion and periods of leaner times. If you look at those periods as chapters and not as the entire story, you can adjust your strategy and still win long-term in those markets.
  • Have a “lifetime value vs. customer acquisition cost” mindset. It’s useful to assess how much you spend to get a customer compared to what you estimate to be the lifetime value of that customer. It takes the worry out of near-term revenue results but puts guardrails in place so that you don’t overspend. And it can vary from country to country. In a market like the U.K. or France where people are accustomed to paying for software, you might pay more to get a customer. In a market like India where a lot of software is free or very inexpensive, it means you’d need a more conservative customer acquisition strategy.
  • Identify your next market. Let customers discover and use your product with a “rest of world” offering. We have a “rest-of-world” product that’s not customized for specific markets. It’s proven to be a useful indicator interest in a potential new territory. If you see people adopting your product in high enough numbers in a certain region, you can assume with some localization you’d get more customers and better loyalty there.

Serving new geographies and new customers is both exciting and potentially very important to your growth as a company. After all, it’s a big world out there.