The Remote Office in Tech Sales & Marketing

The discussion on whether tech companies need remote offices has diverse opinions. While it may seem like a simple topic on the surface, the decision to spend precious resources on additional physical locations is actually quite complex.

Where your opinion falls on this topic depends upon many factors. Including but not limited to:

• Your personal background/experience
• Whether your company is software or hardware-based
• Product price point
• Product’s ease-of-use
• Typical sales cycle complexity & length
• Current company capitalization & fundraising potential
• Channel availability in your market segment.

Let’s dig in a bit on this important decision, which at one point or another faces many technology companies:

Do you really need a remote office?

There are several things to consider when deciding whether remote offices make sense for your software or hardware company. Say you’re a SaaS company; you might think: Why would I need remote offices? I can market and sell a SaaS product worldwide from anywhere!  But it’s important to look below the surface before making this decision.  Listed here are a few important considerations:

Product localization

If your product requires significant customization for foreign markets, there is a high likelihood that a local approach to sales and possibly marketing will also be important.

Sales complexity and average sales cycle length

The more complex and longer the sales cycle, the more important it will be to have local people on the ground. But they may also need to be employees, to be as knowledgeable and focused as possible.

Distribution partner value-add

In some market segments and geographic regions, it’s possible to recruit distributors. Companies that, to a great extent, act much like the developer/manufacturer in their region. Not only selling proactively, but also providing outbound marketing and technical support. In other regions, the distribution partners you’re able to attract will likely have more limited value-add. Usually, the more developed ones (notably including the US/UK). Sometimes, these developed-market distributors only provide inventory, credit, and purchase aggregation services to your end users and/or resellers.

Need for technical support

The more support-intensive the product, the higher the likelihood that local support can play a role in building the business in a remote location.

Can you afford a remote office?

For many people, this will be an easy question to answer. You either have the money for this type of expansion, or you don’t. But especially for those contemplating a fundraising endeavor, it’s important to explore whether remote offices will be a key component of your sales & marketing strategy. Investors always want to understand how you will use the funds. Deciding how many offices are needed and forecasting how much is required to make your remote offices self-sustaining can be an important exercise.

If you need remote offices – when?

Often, you can get started without any remote offices, even when you believe that you will need many to maximize the market opportunity in the long run. I recommend that you hold off until you’ve really gotten the product to a stable point. That means product/market fit, a repeatable sales process, and a substantial customer reference list. If you invest substantial capital in remote offices before meeting these milestones, there is a significant risk of inefficient use of scarce funds.

Worst case, you end up having to retrench, closing many, if not all, remote offices, with a plan to restart at a later date. This can be very painful and has helped kill many early-stage companies. Moving too early is to be avoided if at all possible. The only time I recommend taking on this risk earlier is in a hyper-competitive market. And one where the remote offices are seen as critical, and waiting adds more risk than it mitigates.

Distributors vs. remote corporate offices

This is one of the key considerations when composing your international sales & marketing strategy. It is a complex topic I’ve written about previously. One beyond the scope of this article to delve into in real detail. It’s very important to match your specific company’s situation to the ultimate strategy chosen. All too often, I see senior tech company executives “do what’s comfortable” in this area. If they’ve come from a background of far-flung, worldwide corporate offices, these folks often tend to assume this is the right direction. If they’ve previously been in situations where distributors were used heavily (and successfully), they may see this as the most effective (and cost-effective) approach. In either case, this often happens without fully thinking through the current circumstances facing their company.

Have real, objective discussions with case-specific data

This lack of depth in the consideration of international strategy should be avoided. Do you have a large amount of capital available to invest in a substantial number of markets? If not, are there key markets where you absolutely need an office? While others can be handled well by local distributors? Is your product really that “sales-intensive”? Or maybe it can be promoted effectively through worldwide marketing campaigns executed from your corporate office. Possibly even sold “self-service” on your website?

How competitive is the market overall and in each remote market where you would potentially set up an office? Is local tech support critical, or can you also handle it mostly self-service or via live chat on the Internet? Even if you can utilize local distributors as part of your sales & marketing value chain, are they the type of distributors that will be ineffective without locally based sales, marketing, or tech support from your own company employees? These are just a few of the many important questions to be discussed when formulating your international business strategy.

Remote office duties & composition

“Remote office” is a vague term for an auxiliary office of a company. One that can include a variety of functions, depending upon the company’s specific circumstances. Below are a few functions that are most commonly a part of a remote company office:

Outside Sales

This is probably the most common function staffed in a remote office, although an argument can be made that in many cases it shouldn’t be. The first “remote office” employee is usually a sales rep tasked with bringing new business in from the target remote territory.

Inside Sales

Probably the second most common function. However, it can be argued that this function can be done well from the home corporate office. But having local people who speak the right language with the right accent and are available during local business hours can be a powerful market advantage.

Outbound marketing

The third most common remote function. The broader and more “mass market” the segment being targeted (B2C being more likely than B2B), the more localized the product that is required. Also, the lower the price point, the more important it will be to have a local marketing budget along with personnel to execute local campaigns.

Tech support

This is the fourth most likely function to be supported in a remote office. But imo opinion, in many cases it may be the most IMPORTANT. Local sales reps can be very important to penetrating a remote market.  Having good tech support reps who can both provide pre-sales support and quickly address customer issues during local business hours in the local language is often even more critical to remote success.

Product customization

The least likely function on this list to be staffed locally in remote markets is product localization. This could consist of local software developers, product engineers, or technical writers. But even when product localization is important, these functions are still more likely to be conducted from the home corporate office. I have seen many exceptions to this, however, including localization done by distributors. In some cases, doing localization from the home office can be a real mistake. That’s due to a lack of knowledge of the remote locality.

So there’s an example set of questions to explore when deciding whether to open remote sales and marketing offices. Does this match the process you would use? Please post a comment with your own list of key questions and decision criteria.