The World May Be Flat, but the Cost of Selling Internationally Is Not

Sales executives at business-to-business multinationals often wonder what the expected cost of sales should be as they expand internationally, with conventional wisdom being “slightly higher” than in the home country. In reality, complicating factors come into play, ranging from product variation, more heterogeneous populations and lower demand density, to the inefficiencies of a start-up sales pipeline. What is an acceptable “complexity premium” for sales operations in different regions? Benchmarking companies in a similar industry and with a similar commercial model can help. The chart shows the benchmark results for one US-based technology provider, which was outperforming peers in Europe due to a strong share there, and underperforming in Asia-Pacific. Having a firmer grasp of its relative performance prompted the company to take out costs and raise sales productivity targets in Asia-Pacific.

Learn more about effective deployment of sales resources.

Dianne Ledingham and Jamie Cleghorn are partners in Bain & Company’s Customer Strategy & Marketing practice.