What crucial distinctions must businesses take into account while operating in the DACH region?
Businesses must be aware of the cultural and legal distinctions within the DACH region, including the necessity to communicate in four different languages and the intricacy of laws in Germany, Austria, and Switzerland. Approaches that are simply copied and pasted from the US might not work.
What suggestions would be made to US or UK businesses before they entered the DACH region?
Companies must have a long-term investment strategy with support from senior management and investors before entering the DACH region. They must also commit at least two to three years to building and expanding the market, hire locals with native language skills and local knowledge of the culture and region, and bring other team members like pre-sales, marketing, and customer success management onto a local level. Although some places might not have an appropriate supply, it is also crucial to take into account resource pools for IT sales and technical expertise.
What are some typical reasons why vendors struggle when attempting to sell through partners in a new area?
Lack of support, a weak partner program, ineffective customer outreach, ignorance of the partner's strengths and weaknesses, and a failure to be honest about what they can and cannot deliver are all reasons why vendors may struggle when selling through partners in a new market. It's crucial to understand the objectives and skills of partners and to communicate properly while also giving them the appropriate deliverables, resources, and assistance.
Marcus Cauchi: [00:00:00] Hello and welcome back to the Inquisitor Podcast with me, Marcus Cauchi. Today my guest is Tobias Kopp. He is the regional manager for Central Europe for a hypergrowth scale up called Collibra. Tobias, welcome.
Tobias Kopp: Good afternoon, Marcus. Thank you for having me.
60 second run down on your history
Marcus Cauchi: My pleasure. Would you mind giving the audience a 60 second run down on your history, so get a sense of where you've come from.
Tobias Kopp: Course. I'm in sales for over 20 years and have been selling really, uh, everything from physical to services to projects, as well as digital. In the past 15 years, I've been really helping SaaS scale up as, as well as, uh, big corporate, uh, vendors to build and grow the DACH region of their enterprise business. And I've also been building and managing partner programs to just leverage a partner ecosystem to help strengthen, strengthen the enterprise sales footprint in the region.
Marcus Cauchi: Excellent. Thank you. [00:01:00] Our conversation today is largely around why so many organizations fail when they move into Europe and um, I'd like to explore both US and UK companies because I know both have problem. But in particular into the DACH region, which is Germany, Austria, and Switzerland. Because a lot of people see that as a very, very rich opportunity for them.
But basically they die on their backside because they get it all wrong. So let me start with this. What are the common blind spots that you see inbound vendors having when they're trying to enter the European market, and in particular, the DACH region?
What are the common blind spots that you see inbound vendors having when they're trying to enter the European market, and in particular, the DACH region?
Tobias Kopp: So I think it is really important for companies to understand that the DACH region is quite different in terms of different cultures, different law systems.
You find four [00:02:00] different languages you need to cover as a, as a company in this region. So, . And on top of that also Germany and, and Austria are partly regulated also by EU law and regulations, uh, for instance, uh, around GDPR, whereas, uh, Switzerland is, uh, following their own law and regulations and, uh, explicitly staying out of the, uh, European Union.
So you find a very complex markets, uh, and region, uh, in, in the Dutch region here. Uh, and you need to consider so many different things because you cannot just come from this thinking, we are probably US driven company and we'll just copy and paste what we've been, uh, doing and exercising in the, in the previous time to the rest of the world and to the DACH region.
So what about cultural blind spots?
Marcus Cauchi: So what about cultural blind spots?
Tobias Kopp: Cultural blind spots is, uh, probably one blind spot I would see is, uh, a relationship building. Uh, relationship building is, uh, important topic [00:03:00] in the DACH region, and especially in a country like Switzerland. I would say that Switzerland, probably from my previous experience, uh, really requires that most effort in building trust and building up your, your network before you can really start selling into those accounts.
So building a strong relationship, creating trust by, um, having many conversations, uh, educating the market is really, really key. But that also applies to, to Germany and Austria, of course. Those people, the people here are really heavily focusing on trust before they want to do business with you.
Marcus Cauchi: And what about hierarchy and qualifications? Because one thing I've noticed about Germans in particular is they often stay on in higher education a lot longer than we are used to in the UK. There's an alphabet behind many of their names, particularly if you're selling into [00:04:00] engineering. So what are the blind spots when it comes to, uh, understanding that culture of higher education and, uh, respecting the hierarchy?
Tobias Kopp: That's a very good question, Marcus. So from my experience in terms of hierarchy or more specifically also, uh, personas you find in, in Germany. The Germans, uh, are really, as you might know, they're rather thinking towards a, a problem than towards the solution. So, uh, they're always thinking about, we have a problem here.
So, um, and they're not projecting their business. Uh, sometimes probably with a more solution. Uh, so focused approach like our US customers would probably do this. So you'll find many people just focusing at first on the, on the problem rather than the, the solution really. So that, that's really something you have to think about.
And although especially the terms, they like their hierarchies, they, they like their [00:05:00] titles. You need to, um, be able to talk to them in their own business terminology and, and language, uh, to be really respected and to create trust, uh, again, so that they'll be open, uh, for a conversation with you.
What would you advise a US or UK company to do before they launch to ensure that they have a strong foundation and they don't come unstuck?
Marcus Cauchi: So in, in terms of building the relationship, what would you advise a US or UK company to do before they launch to ensure that they have a strong foundation and they don't come unstuck?
Tobias Kopp: I think there are several things to that. First, I think you need to have the understanding and also have the strategy that the DACH region entering the DACH region has to be a long-term investment. You can't just expect to enter the region and close the first multimillion deals, uh, in the first, uh, couple of of quarters.
So you need to have that, [00:06:00] um, strategy, uh, and the backing and the support of the by senior management party port by the investors to invest over a long period of time. To build that market, to grow that market, uh, you need to invest at least two to three years in from a timing perspective. But also on the other hand, I believe you also need to hire the right, uh, people to do this.
Probably in the, in the beginning, uh, you might use the northern regions or UK. The first level to reach out into the DACH region, which, uh, works fine. Uh, most of the times, I think at a specific later point, you'll, uh, realize that you need to have local people speaking native tongue. Having the local understanding of, of the culture and the region and the differences, uh, bringing their own network.
And you need to start also having people, uh, localized, [00:07:00] uh, in Germany, probably in Austria, but also Switzerland. It's really important to have local people there and also bring, uh, the other team members like pre-sales, like marketing, uh, customer success management onto a local level.
Marcus Cauchi: One of the things I've observed is there are a lot of companies that are trying to start up in Berlin, but that doesn't seem to be a great resource pool in terms of IT sales or technical skills.
What is it that's drawing people to Berlin instead of places like Munich, Frankfurt, Stuttgart
Marcus Cauchi: What is it that's drawing people to Berlin instead of places like Munich, Frankfurt, Stuttgart? I, is it just because it's the capital and uh, the allure of the lights and kafuse den darm and ver various other fun stuff?
Tobias Kopp: Yeah, probably. I think from an outside, uh, perspective, Berlin is, uh, very modern, glamorous city with a lot of history, of course, and you find many, many really young and creative people in Berlin.
However, [00:08:00] um, looking at this from a pure business perspective, I think rarely find the big, uh, corporates. So the suspects, the customers being located in Berlin. That's one, uh, issue I see with locating your first, uh, office in Berlin probably. But also what I see a little bit critical about Berlin is if you are looking for the right resources in terms of uh, uh, revenue and operations.
That might be an issue because usually find those people more in the area of like, uh, Munich or, or Frankfurt or Dusseldorf because you, you already have other big and, and smaller SaaS companies being located in this region and they, they probably be looking to move into a different companies sooner, at a sooner or later stage of their career.
However, if you're looking for more kind of creative or developer pool of people, Berlin might be a good place to start because there, there are so many startups [00:09:00] sitting there, but they are mainly around really, um, the development, uh, development you need in the beginning to, to, um, program a solution to create a solution.
Does it make sense for people who are looking to break into the DHA region to maybe look at a channel launch strategy rather than trying to set up locally?
Marcus Cauchi: Uh, I know you've got a, a strong background in channel. Does it make sense for people who are looking to break into the DHA region to maybe, uh, look at a channel launch strategy rather than trying to set up locally?
Tobias Kopp: Absolutely. I think utilizing a partner and, uh, channel ecosystem is really very important, uh, doing business in this, uh, region. Might not be talking about the real, real big, uh, partners only, but also finding more boutique partners and, uh, general partners, uh, in countries like Switzerland or Austria might be a very good, uh, starting point because they have been doing business for many, many years already with the, uh, the pro prospects [00:10:00] you're looking at and really helping those partners, making them more valuable for the customer.
By having another great solution to offer, giving them enough support, um, and really helping them to create, uh, new business jointly with you. That might be a very, uh, critical and important element to really entering the DACH region.
Marcus Cauchi: I, in terms of short cutting that whole process of building trust. I think you've made the point extremely eloquently that these partners already have aste established customer relationships.
What is the normal response from German end users?
Marcus Cauchi: They're already known to them. I think what I see very often, Is that vendors try to land in a country thinking that their success in the US or their success in the UK will carry them. But in your experience when vendors have tried to do that, what is the [00:11:00] normal, uh, response from German end users?
Tobias Kopp: So I think one of the first questions or um, probably also objections, uh, you'll find, uh, with, uh, customers in this region is, tell me, uh, the company, the software vendor, show me your best practice, show me your success stories from our market, from our business. It's nice, uh, to have your big shiny success stories from your US customers. That's great, but we really also would like to see, uh, how you implemented this on a more local, uh, regional level here, and really having those success stories, building those, uh, success stories.
Bringing the best practice from other customers more down to a regional level is, is really also very important because they want to find themselves again in those success stories because we are so different, uh, from, from a legal system point of view, [00:12:00] from from a use case point of view, probably compared to other regions, although you probably find not as many.
Really globally, uh, established, uh, companies and brands in, in a country like, uh, Germany compared to, uh, let's say Ds where, where you have really the big, big, uh, global brands like, uh, Nike, Coca-Cola, et cetera. You don't have that big volume here in Germany.
How often do you find US and UK companies coming unstuck because of that?
Marcus Cauchi: So let's take Switzerland. First of all, obviously you've got the German, you've got the Italian, and you have the French markets there.
How often do you find US and UK companies coming unstuck because of that?
Tobias Kopp: Very often and from what I've experienced in the past is, it might sound funny, but even if you're, uh, coming, uh, more from a northern part of Germany and trying to talk to someone in Switzerland, you'll probably find le less acceptance to have an, uh, ongoing discussion with them as, uh, when you're [00:13:00] coming more from a southern part of, of Germany, like from the Munich area, because it's really the distance, but also it's kind of the similarity in, in, in the, in the culture you're coming from, from a from the countryside you're coming from, from the Alps, you're very close to each other.
So having, uh, someone from, from the barrier, let's say talking to someone, uh, in Switzerland might work more often than, uh, having someone from really Hamburg or Berlin trying to do business with someone in Switzerland. However, I've also been working a lot in Switzerland in the previous years, and all I have to say the best setup for Switzerland really be to have a local person, uh, being, uh, located in Switzerland, somewhere in the area of Turig or Geneva or Basel. Uh, really depends on where you wanna start. But having someone who, who used to live in Switzerland already, who [00:14:00] is probably well known in, in his own network, there might be the, the most optimal starting point.
What advice would you give in order to recruit either that individual or that partner to identify someone who, or an organization that has the right kind of network and background?
Marcus Cauchi: So from a recruitment standpoint, what advice would you give in order to recruit either that individual or that partner to identify someone who, or an organization that has the right kind of network and background?
Tobias Kopp: I, uh, directly start looking for people in Switzerland. Either utilize headhunting network or you have your recruiting team reaching out to people who are seem to be a good fit from their previous experience and history for our sales career in in Switzerland.
What kind of research can you do to establish whether someone really has a network of any substance versus claim just claiming they have one?
Marcus Cauchi: And so what kind of research can you do to establish whether someone really has a network of any substance versus claim just claiming they have one?
Tobias Kopp: That's where it becomes a little bit tricky because everyone seems to have, uh, 500 plus contacts on LinkedIn [00:15:00] today, and it's hard to tell, of course.
Are those real contacts and, and this is a good re uh, network and relationship you can trust? Or is this just accept by default kind of thing? I think you really need to talk, uh, to those people and get them talking about how they approach building relationship. How they have been doing this successfully in the past, what challenges and roadblocks they have been experiencing just by talking with them, getting a really good understanding if they are a good relationship builder because, uh, if you get the feeling that someone is really good in having a conversation and building relationships, this person might be on the more positive side of that you can trust.
That's his existing network is really, uh, real and, and solid.
Does it make more sense to go for a partner as your first point of entry rather than an individual?
Marcus Cauchi: So on balance, does it make more sense to go for a partner as your first point of entry [00:16:00] rather than an individual?
Tobias Kopp: It depends on the really what partner you are talking about Marcus, is this more, uh, reselling partner? Is this more consulting partner?
Marcus Cauchi: Okay. Cause uh, again, obviously you have the transacting type of partner and then you have the technical partner. But if you're trying to expand a market, presumably most will be looking for one that has a good sales operation because they want to be generating pipeline, building a customer base.
Is there any advice that you can give in terms of being able to identify whether a prospective partner is one that you want to put a ring on their finger?
Marcus Cauchi: So again, is there any advice that you can give in terms of being able to identify whether a prospective partner is one that you want to put a ring on their finger? Because they are, uh, actually effective at selling.
Tobias Kopp: So what I've, uh, seen and experienced in the past is that you really have to go through a very deep qualification process, of course, with those partners [00:17:00] just as, uh, you would, uh, uh, do during your prospecting with your, with your customers. So you really need to understand who are the good partners you want to go for and what you want to connect with. And probably you, you might already bring some relationships, international relationships from other countries with you that, uh, you have been already, uh, working with, let's say Accenture or, uh, Capgemini in other regions. And, uh, you could, uh, utilize their local, um, presence in the DACH region just to build up on that.
If you are looking to, to, um, partner with new partners you want to work with, you should really look into what, uh, customers and, uh, industries and solution space they serve in, as well as if you are really able to educate and, and train them. Because this is something those partners will ask, uh, for a lot.
And [00:18:00] I think this is, uh, really very important. You have to be able. Of course, uh, today due to the, uh, pandemic situation we are in right now, you can do this more, uh, virtually. But anyways, those partners will look for and ask for, for a lot of onboarding, training, education, so that you enable them to really go and, and help yourself talk to customers. So then the whole enablement part in building a relationship with our partners really very important.
Marcus Cauchi: When I was doing the original research for making channel sales work, when we were writing that, one of the most important themes that the 60 or so people that we interviewed were making to us was how important it was that you were good and you were set up to be a good partner.
And again, I suspect this, you've got a few interesting war stories where vendors have [00:19:00] come into the DACH region and they have failed to establish themselves as a good partner and they kind of expected the partners to do all the heavy lifting.
What have been the reasons why vendors coming into a region trying to sell through partners have failed?
Marcus Cauchi: In your experience, what have been the reasons why vendors coming into a region trying to sell through partners have failed?
Tobias Kopp: One of the reasons why they might have failed is, uh, probably, as you already said, they let the partner do all the heavy lifting. Uh, they will just, uh, run them through a good or not so good, uh, certification and onboarding process. Give them a high quota to start working on, but then leave them just alone without, um, any more support.
And really having no solid partner program in place is really not helping those, those partners as well to be, to be successful with you. So you need to make sure that you can [00:20:00] supply them with the right deliverables. Uh, you need to be able to, uh, provide them with the enablement and, and onboarding, uh, material and information you need to be able to make resources, let's say from, uh, pre-sales or also from your sales team available to them to jointly execute on, on customer, customer, uh, site meetings and presentations, uh, with them.
Also, I think another point where companies seem to fail is not really talking the local ton, especially in terms of marketing deliverers. You will see many comp companies just translating US originally, um, generated, um, deliverables like website or white paper or a block, just translating this one to one into the, uh, local language, but, uh, having really no context at all to, uh, the [00:21:00] local, local expectations from customers, uh, local use cases, and, uh, more the typical language, um, those customers when they're talking about their business.
So, uh, they might not be talking about digital transformation or velocity in, in, in content or whatever. You need to find the right terms also on the, on the, on the marketing side. Having said that, so putting the right deliverables in place in the, in the markets and really talking in, in a local town, but also providing enough, uh, support, providing enough, uh, resources to your, your partners is, is really important to, to be successful.
Marcus Cauchi: Okay, I think it's worth building on what Tobias has just said. You've got to make sure that you communicate clearly. You have to make sure that you keep your word if you're entering any market, and if you're selling anything to anyone.
You're known by the promises you [00:22:00] keep, not the ones that you make. Uh, but I suspect in Germany and, uh, Switzerland and Austria, it's, uh, a particularly high requirement that you don't make promises you don't intend to keep. Because first of all, letting people down is a bad sign. But secondly, I suspect these people will talk and they'll, you, you will very quickly develop a reputation.
For not sticking to your, your word. The other element is that you need to work towards a win-win or no deal, and you've gotta make sure that you are upfront if, um, I think, um, one of the things that I've noticed in my dealings, uh, with uh, German clients historically, is they appreciate your candor. If you honestly can't do something, they would much rather know that upfront, uh, than find it out later whilst you've tried to, you know, stick things together with sticky tape and staples and understand what your [00:23:00] partner's requirements are, what they are trying to achieve, and do everything that you can in order to help them achieve their goals. And if you're gonna recruit a partner, make sure you understand the type of partner that you are courting. Are they technical? Are they a sales organiza, uh, organization?
Are they a 360 house that does everything from start to finish? And don't go in expecting a technical partner to be great at selling. They're not, they're very good at technical stuff, but they probably can take an order well, they can't necessarily open up a market or open up an account. They may be able to introduce you to their limited set of customers, but if you're expecting them to be an expansion house and you know the, the, this great engine that's going to drive your pipeline, that's very unlikely to happen.
Would that be a fair summary of things that many organizations miss?
Marcus Cauchi: And so again, I think other elements are regular communication and honest feedback, a [00:24:00] cadence of accountability, making sure that you map out what the expectations are, that you have a proper onboarding process. Once you've gone through the flirt and you've decided to put a ring on each other's finger, then make sure that there is regular communication, regular accountability, and make sure that everyone in the team is engaging with the right people within the partner organization. Would that be a fair summary of things that many organizations miss?
Tobias Kopp: Absolutely, Marcus, that's a great summary. Probably, um, as you've been mentioning also to the risk of overpromise and under deliver I think also on the, at the point when you have been, uh, closing a deal, uh, you really need to make sure that you provide continuous support and communication to your partner, but also of course to your customer, to your new customer. What I've seen in the past is that the, uh, customer success organization has been really been burning out [00:25:00] because of, uh, just being, uh, overloaded with, uh, too many customers, too many new projects. Then the ship basically started sync syncing. And although, as you said, uh, said absolutely correctly, customers start talking.
This is a very small network. Uh, basically, uh, like in Switzerland, if you're trying to, uh, enter the fin space, everyone knows each other and they talk on a freaking basis about their business stuff. And what goes around comes around. So really, if, if you are not doing a great job, also in execution, execution and, uh, delivering on your promise, you, you'll not find, uh, a very good potential market in, in front of you anymore.
Marcus Cauchi: Well, this then raises yet another really important question, which is that if you are going into a marketplace, then whi, whichever market is in Europe and DACH in particular, you need to understand the culture of how people do business. [00:26:00] In the US people are often going to be quite guarded about what's going on, but within job functions, we know that procurement people regularly speak to one another and they talk about their experience and you know, you, you've got to make sure that you are not creating a minefield for yourself. So again, tell the truth, always. Get ahead of problems. And this is a really important lesson that people, uh, in fact, there are two really important lessons. The first one is that unhappy customers will always be looking around. Satisfied customers are always open to an approach. A satisfied customer could quite easily throw you into a bid situation when renewal is up, because if someone comes with a marginal gain, it's worth their while to explore it. And so delighted customers don't. What [00:27:00] they do is they come to the vendor and they say, X, Y, Z company has come to us. They're offering this. Can you do it?
And so it's really important that that regular cadence of communication is in place. The other point that I'd like to make, and I, I learned this from Bob Master and, um, his fabulous book, uh, book Demand Side Sales, is really worth a read. But he talks about how customers hire your solution. They don't buy it outright.
They hire it for as long as it delivers the outcome that they want. And you need to start thinking like that. Uh, customers are not forever. You have to keep earning the right to have them come back, renew, expand. And in the DACH region in particular, I get the sense that that's very much the mentality of buyers, that it's temporary, but if they're getting brilliant service and they're getting a solution, they're very loyal.
Would that be a fair identification of what goes on in that market?
Marcus Cauchi: Would that be a fair [00:28:00] identification of what goes on in that market?
Tobias Kopp: Absolutely. I, I a hundred percent, uh, agree Marcus. And I think we as salespeople, we have to, uh, sell the, the outcome. We don't have to sell the solution. We are selling the outcome. We have to heavily focus on the benefits and how the solution will improve the customers, uh, business, uh, how it will increase their revenue, how this will differentiate them, uh, from their competition.
I think that that's very important. But also what I've been realizing over the past couple of years is also the mentality how companies, uh, want to buy is changing more and more. You need to think about a more, uh, buyer first approach, especially in, in our special times. We are living in right now with the pandemic as, uh, most of the business has been shifted to digital and, and virtual.
You have to think really about how does your audience want to buy from you? [00:29:00] What's their expectation, uh, in terms of processes and, and, uh, steps. And you have to adapt to that.
Marcus Cauchi: Again, I, I strongly recommend that people look at, uh, Bob Master's book because in there he has, he's mapped out a buying cycle that buyers are going through.
The first thing they do is they realize that there is a, a problem. And so what they do is they start making space and they have a first thought and they start sniffing around and passively looking and learning how they might be able to solve their problem. And as the problem builds, they start seeing possibilities and they start looking actively.
And then they start to look at making trade-offs. ABC company does flip its flaps its and [00:30:00] flop its. XYZ company does flop its flap its and fidgiboos, or whatever. And so they start making these trade-offs. What do we have to compromise? And they make their decision on the basis of what they have disqualified. And this is really interesting because it actually aligns very closely with how we as sellers need to think, which is we need to disqualify out the non opportunities and the non prospects and the wrong prospects early so we can concentrate our energy and effort on the opportunities that we can win, and we should win.
And then they start to use it and they make progress. If they're not making progress, they'll drop it like a heart break. If they do make progress through ongoing use, then they start to build a buying habit, and this is again, ties in very neatly with the whole concept that they are just hiring your solution [00:31:00] because the habit will continue for as long as it delivers the outcome that they're paying for.
The moment it doesn't or something else comes along that offers them a better outcome or their conditions have changed. You need to adapt, and this is where we need to start thinking very differently as sellers. Gone are the days where you can show up, vomit up a few, uh, pro product features and maybe make a sale.
Companies are very savvy nowadays, and particularly through Covid. They've had to really tighten their belts. They're focused on how can you help me solve problems across multiple departments? And you need to be partnering with the end user. You need to be partnering with procurement. You need to be partnering with your partners, and even sometimes your competition so that you can help your customer.
Solve their [00:32:00] problem in its entirety. They're probably already aware of the symptoms, if not the pain. They may not quite understand the cause, but just turning up and feature, benefiting them to death is not gonna work. Just turning up and putting them into a pain funnel and beating them over the head with their pain isn't going to work.
You need to be a strategic partner and you need to be by their side helping them along the way to evaluate, helping them to understand the root cause of their problem. Now, procurement is in the unique position of having all these problems thrown over the wall to them, and finance and operations and IT and marketing and sales and customer success are all throwing problems over the wall to procurement.
They are the one department in the company who gets visibility of all of the problems at once. And to pick up on Tobias's point, [00:33:00] if you are going to enter into the DACH market, it makes a good deal of sense to spend probably 12 to 18 months pre-launch engaging with those procurement people early to understand, first of all what's going on, how they like to buy, what their priorities are and how they are changing.
But also to sow the seeds in terms of if you see this pattern of events happening, that is when you should be bringing in our partner to have a conversation about how we might be able to help you. And then you can pick up all the business and you'll get long-term business out of them instead of picking up the scraps and just the occasional bit, because technology vendors are just one moving part in the machine of IT.
So in security you might be one of 12 or 20 different vendors. Which in turn [00:34:00] is just one component in all of their IT strategy, all of which is there to underpin the business's strategy. And if you are not partnering with procurement, if you are not engaging in conversations with the board about what their strategy is, then when you enter that market, you'll be spending a lot of time using your fingernails to try and claw your way up the organization.
And meeting a lot of resistance because you haven't earned the right to sell to them. Is that a fair, uh, statement?
Tobias Kopp: Absolutely. Great.
Can you think of examples of companies that have been able to expand their reach really effectively and what was it about their strategy and the people that they had on the ground that really made them stand apart from the others?
Marcus Cauchi: As we look at a company that has managed to get a foothold in the DACH region, can you think of examples of companies that have been able to expand their reach really effectively and what was it about their strategy and the people that they had on the ground that really made them stand apart from the others, uh, who maybe are just [00:35:00] surviving or grow briefly and then collap, fade out?
Tobias Kopp: I think one thing I've seen which worked very good for those companies is, uh, to hire, really experienced, more senior people in the beginning, rather, uh, than putting, uh, young, young salespeople, PDRs into the region, really building more on the, on the, the senior level because they will bring the experience and, and all, all the, uh, knowledge and also of course, uh, network with them.
And, uh, will bring the understanding of how to build out that team, which people, uh, people to hire to do the job in the region. I think, uh, that's, uh, something people have been doing quite well, um, in the past. And, um, probably another point which, uh, always worked out, uh, very well is when, uh, companies, as you mentioned before, already had a, a long-term strategy [00:36:00] and understanding of, of the market, if they just, uh, didn't try to fast start into the region by just, uh, telling a, a few sellers, uh, probably sitting in the UK office, reach out to the companies in, in Germany and Switzerland and Austria and to get them on the phone or get them on the video to, to run them to a product presentation, do a demo, and then start selling. I think you need to invest a lot of more time, and as you said before, give it at least 12 to 18 months, uh, to really do your research. Do your homework about, uh, market industries, companies, personas, culture, all that stuff here you need to build up on, uh, at a later, later point of time.
Marcus Cauchi: There are two resources that I would strongly recommend people explore. One is a fabulous resource called Going Global on a Shoestring by, uh, a guy [00:37:00] called Hans Peter Bech. And it's a recent release and, uh, Hans Peter was involved in the growth of a company called Navision, which at the time was probably the largest acquisition in the, uh, the history of IT.
Now, this was back in the early two thousands, late 1990s, and in fact, he's written another book called 5,460 Miles from Silicon Valley. And this was a, a Danish ERP vendor who groove, first of all, through Germany, uh, and then into the US and he maps out there the story, and it still holds true for companies that are trying to expand into the DACH region, but also to accelerate their hyper growth.
And the other is a chap called Zack, Z A C H Selch, S E L C H. And uh, [00:38:00] Zach is a fascinating character. He's a good Jewish boy from Chicago who has been working with the kingdom of Saudi Arabia for the last 30 years. He's opened up a thousand partnerships plus over 135 countries, and he's created a video series about cultural awareness and he offers his service as a route to market to drive explosive international growth.
You can find him on global sales mentor.com. Strong recommendation that you look at his videos and you connect with Zach because he is incredibly culturally aware and very, very smart at helping you to generate productive, viable partner relationships that produce pipeline quickly, even before you've got the legal terms and conditions properly completed. And I think it's really important as well. A lot of US companies, and you see this with a lot of [00:39:00] UK companies as well, they're so fixated on having this, you know, war and peace, thick level of, uh, contract in place. But the reality is you wanna see what's under their kimono before you start wasting, uh, you know, tens of thousands of dollars on legal, uh, fees.
Go out and find the right kind of partner and create the conditions for them to actually go out and start building pipeline and do whatever you can to help them be successful. And I see this all the time. When people go out to market and they're looking at growing through their partners, they kind of expect a partner can sell.
In my experience, a lot of partners cannot sell. They're very good at taking orders. Many of them, if you ask them how they generate their business, they build it through referral. Which is great, but they don't have a referral system. What they've been doing is trading off longstanding [00:40:00] relationships because they've been around for years or decades and they're not good at landing and expanding.
What they're very good at is keeping existing customers, and you need to be really savvy in terms of your pre-qualification phase. To make sure that you are getting the right partners, and if they're not a sales organization, you have to help them to sell. I see this, I, I'm working with a couple of software vendors as Chief Revenue Officer, and one of the things that we've committed to our partners is that we will train them.
So every Monday morning we have a training session on how to sell our product, and then we have unlimited coaching for when they need help. We're producing assets to help them produce their marketing collateral. We're getting their messaging right by region, so we're spending a lot of time and money investing in the messaging for the [00:41:00] individual markets that we're, uh, opening up.
We midwife deals with them, so we help them to qualify. Uh, we help them to disqualify as well. Because getting outta the, the wrong pursuit is like saving a goal in football and too few vendors are willing to have those conversations with their partners because the channel manager wants to look like they've got a full fat pipeline.
I would rather have nothing in the pipeline because nothing is real, uh, than fill it up with rubbish because that just sucks up resource and mismatches the expectation that you are sending to your senior leadership team, your board and your investors. So let, let's talk about the malpractice, the bad practices that technology firms exhibit in the DACH region that drive distrust because of how investors are expecting software [00:42:00] vendors to behave in the market.
What are the mistakes in behavior and management that you see being forced on the sales team that perhaps do more harm than good?
Marcus Cauchi: What are the mistakes in behavior and management that you see being forced on the sales team that perhaps, uh, do more harm than good?
Tobias Kopp: As we are all coming from, from a revenue driven, uh, business and, uh, specifically from a quarterly based driven business? I think, uh, this is, uh, one of the biggest mistakes or the invest investors might tend to do to, uh, just focus too much on, on each, each quarter and not having the, the long term view and, and the, the vision that they need if they want to invest in a, in a new region like the, that region. So, coming from a highly efficient, uh, revenue organization from the US, which is, uh, already running very fast, bringing a lot of revenue into a region which is not at the [00:43:00] same, uh, pace and volume already, and just putting the same pace and also the same pressure on onto that region.
Uh, just to align to corporate goals and, uh, corporate objectives. And, uh, of course, revenue planning is something where I've seen, uh, that's not good for, for building and growing a region and also not good, uh, from an investor's point of view because they will. Be able to achieve their quarterly targets with such a short-term thinking.
What pushback do you have to give to investors and to US management so that you are establishing clear, realistic expectations? And how badly is it?
Marcus Cauchi: So as a general manager, what pushback do you have to give to investors and to US management so that you are establishing clear, realistic expectations? And how badly is it?
Tobias Kopp: So I think , I think one habit and good skill, uh, you should have in this position is being a very good communicator. [00:44:00] You should, uh, be able to tell the, the, the story, show the outlook, and show the consistency how you are trying and working on building, uh, the market and building, uh, business in the region.
You need to talk to, uh, all the different kinds of people to your direct, uh, managers, to the board. Probably also reach out to the board, to the investors to just show the whole story and, um, explain how this is going to build up over the next six months, 12 months, 18 months, 24 months, and beyond communication and being able to tell that story to outline your, your mid and long-term strategy, I think is, is a key skill you need.
Marcus Cauchi: It sounds to me like what you also need is a lot of buy-in and that long-term commitment from the board, and without that, it's almost guaranteed that you will fail. [00:45:00]
Tobias Kopp: Yes, I would definitely agree.
What would you advise them to say and do in the interview process to ensure that they didn't buy a poison chalice for a job?
Marcus Cauchi: So if you were advising somebody who was considering a general manager role for the region, what would you advise them to say and do in the interview process to ensure that they didn't buy a poison chalice for a job?
Tobias Kopp: I'm a person who always, who is always straightforward and, um, very transparent and honest. And, uh, what I always like to do is I say, I will not tell you a dream here. I will tell you how the reality I will put you, uh, in front of the reality and, uh, I will be able to to achieve that with your, your support and backup. But I'm a not the type of guy who is just building a dream pipeline, uh, which is just, just dusting smoke after 12 months because didn't show the reality and it didn't show the, the long term investment.
So [00:46:00] I think companies need to find, uh, people, they need to find managers who will have already the experience and the, the skill to work on, on really exhausting sales cycles through a lot of investment in term markets. Building a team, hiring the right resources, and, um, also building a trustworthy and transparent and solid, uh, pipeline.
Would you necessarily be more or less comfortable if they were first time founders, or do they need to have a couple of failures under their belt and have tried to break into the DACH region before and they've got some scar tissue for you to be more confident to take that role?
Marcus Cauchi: Okay. One thing I have observed and before we move into wrapping up, is very often first time founders don't really know what they don't know. Again, I, I'm sure that there will be exceptions to this. That if you are looking at expanding into the DACH region and you're looking at taking on a general management role, would you necessarily be more or less comfortable if they were first time founders, or do they need to have a couple of failures [00:47:00] under their belt and have tried to break into, uh, the DACH region before and they've got some scar tissue for you to be more confident to take that role?
Tobias Kopp: I think it's definitely more beneficial if, uh, they've already, uh, failed one or more times because I think, and hopefully they've gotten their learnings, um, and thoughts from, from that process. Whereas, uh, first time founders might be just too, uh, excited, over excited and, uh, and really, yeah, not bringing that, that, uh, experience from, from previous adventures.
Uh, they already ha uh, have, but I, I don't want to exclude them and say, okay, I'll just go with, uh, zero entrepreneurs and, and, uh, knowing those, those people have done this over and over again and they, they know what they're doing. It's also, uh, always a matter of how open and yeah, open are those, uh, [00:48:00] founders and, and leaders in terms of, uh, accepting their special conditions and, and the, uh, long-term strategy strategy they, they might need.
Marcus Cauchi: I think to summarize, it's really about finding mature leadership that is willing to take the advice of the people who they are hiring, who know their region intimately and making sure that they establish clear, realistic expectations. It doesn't mean that you can't be ambitious, but it does absolutely mean that then they need to have a mature leadership team that recognizes that expanding into this market is difficult.
There are the corpses of many failed businesses. They're littering the battlefield, and you, you have to be prepared to play the long game. Is that fair?
Tobias Kopp: Yes. Yes, absolutely. You have to trust your people. You invest in trust.
Marcus Cauchi: Absolutely. Oh, I like that line. You invest [00:49:00] in trust. I think something else that's really important is that you have to recruit for what, uh, what you cannot train.
What are you struggling with? What are you wrestling with at the moment?
Marcus Cauchi: And that's really important when you're building the team. Tell me this, what, what are you struggling with, Tobias? What are you wrestling with at the moment?
Tobias Kopp: I think the biggest, uh, change in our business right now is really, uh, the pandemic situation we're in right now. You have seen that, uh, companies have been, uh, putting the foot on the brake in the, in the beginning of the year, just being very sensitive about, uh, what harm, uh, hold it new situation might be doing to their business.
They've been freezing budgets. Uh, they've been lengthening the conversations and the, and uh, processes. However, this, the speed is picking up again, and I see definitely that this might be having even a more, uh, positive impact in the future because this as bad as, [00:50:00] as it is the situation we're in right now, that this really was kind of the right kick into the in the right direction in terms of digital transformation and, uh, speeding, uh, things up. And even in investing more money now into software and services.
Marcus Cauchi: I think what I'm seeing is that if it's urgent and important, the sales cycles have shortened. If it's unnecessary or frivolous spend, it's completely off the shelf.
And if it's a nice to have, then the sales cycles have extended. You need to be able to establish whether where you fit in that framework. And if you can't find a way to make what you have urgent or important, then you've gotta be ready to make the long term investment. And you gotta look at ways that you can rationalize, drive down your cost, but also where you can deliver quick wins across multiple [00:51:00] areas of the business, multiple departments. And you need to rethink your approach. And if you are trying to sell technology for technology's sake, and I see this happen all the time with vendors, they're desperate to try and race to a demo. And the only people who look at demos early in the sales cycle of people who cannot buy. They are engineers who want to see a new, shiny piece of tech.
They may be procurement who have a vague interest in something. What they're more often than not doing is establishing what you can do so they can go to their preferred supplier and beat them up to see if they can offer you some, uh, offer them something similar without having to change vendor.
What one bit of advice would you give idiot 23 year old Tobias that he would've probably ignored but would've been useful?
Marcus Cauchi: So tell me this, you've got a golden ticket. And you could magically go back in time and you could a advise the idiot, 23 year old Tobias, what one bit of advice would you give him that he would've probably ignored but would've been useful?
Tobias Kopp: Whew. That's a tough question Marcus.
Marcus Cauchi: Exactly. There are so many.[00:52:00]
Tobias Kopp: I'm not sure if I, if I would enjoy, uh, being able to go back in time because you never know what you change and what impact that has on, on your future.
But probably I think, uh, one thing I would've been doing different is putting more focus on, on what I, what I really want to achieve from a personal point of view, but also from a business point of view and put a little bit more effort in really thinking that tool and, uh, getting an understanding, uh, where do I see myself in in the next 5 years, 10 years, et cetera, if that is, uh, possible at, at all, really. However, when I look back at my career, it has been just a real, uh, personal development. I've been, uh, as I said, I've been selling physical products, digital products, different kinds of kinds of stuff. So where I am right now is because I've been doing this exactly like, like I did.
So it is what it is. So [00:53:00] that's why I say I'm not quite sure if I would really change something.
What have you been reading, watching, listening to that has really influenced you or you feel other people should pay attention to?
Marcus Cauchi: Okay. Um, tell me this, what, what have you been reading, watching, listening to that has really influenced you or you feel other people should pay attention to because it's great material that they can apply and implement?
So generally, I, I read a lot of books about sales strategies and methodologies. I just like that and stuff. And, uh, to understand the differences and how to use, use that in your daily, daily business because I think it's not, there is not the one and only, uh, methodology. It's really a combination and it's really, uh, hardly dependent on the situation you are in right when selling and, uh, at what stage you are in.
But also, I really enjoy reading books on the psychological side of our business. I read a lot of books from investigators or, or, um, also forensic [00:54:00] specialists, just to know how to read and how to under, how to really, uh, understand people. Uh, and, uh, when you're entering a conversation, when you're entering, uh, a negotiation, there are so many nitty gritty details you can get out of those situations.
Uh, how they talk, how they act, how they behave or don't behave. So I like reading books about that. Would give one recommendation, one, uh, one book. Um, I just, uh, recently read is, uh, about facts and figures, um, about, uh, our planet and our world. We are, we are living in, and that helped me really to kind of have more trust that everything is going to be even better than it, uh, has been in the, in the past.
And the title of the book is Factfulness it's from gentleman Hans Rosling. He's, uh, um, he's a, a scientist and uh, this book is full [00:55:00] of facts and, uh, statistics around where this entire world and evolution started and where, where we are right now. And, uh, it's gave me so much, uh, trust and positivity back to really survive.
Thank you. A couple of things that resources I think you will definitely enjoy. I would look up a chap on LinkedIn called Simon Bowen and he's the models guy and he has the models method and I think you'll really appreciate that. I would also definitely check out company called Corporate Visions. Their research is just stunning.
And uh, two key people there are Eric Peterson and Tim Riestra. And, uh, their eBooks are really worth reading. And also I would look at their YouTube videos. Simon Bowen's, uh, videos are fabulous and I would also recommend Colin Shaw. Colin runs a [00:56:00] branding business, but he really understands the human condition exceptionally well, and his, uh, blog is fantastic.
And uh, he has a company called Beyond Philosophy that's really worth paying attention to. And I would also look at Mark Schaefer. Uh, he wrote a book called Marketing Rebellion, and that's about humanizing marketing and humanizing our sales, which I think is something we haven't touched on today, but I think it's really important.
Too much emphasis has gone on automation, and we've sacrificed effectiveness and humanity for efficiency. And um, I see so much marketing wasted and in fact it just becomes an unwelcome interruption. And then that feeds into the BDR conversations. And is there any wonder that you see such heavy, uh, levels of burnout?
How can people get hold of you Tobias?
Marcus Cauchi: How can people get hold of you Tobias?
Tobias Kopp: Always happy to connect, [00:57:00] uh, on, on LinkedIn. This is the, the main network I really use. Uh, I'm also, uh, on of course, but uh, LinkedIn is really the network I'm working on. Uh, mainly, uh, just shoot me a message. Probably, uh, a nice, uh, little intro. Uh, it's always, uh, appreciated and, um, yeah, you'll find me there.
Marcus Cauchi: So on that subject around LinkedIn versus Xing, I know Xing has a strong foothold entering into the German market. Would you suggest that people develop a network in Xing so that if they're starting to get a better understanding of the DACH region?
Tobias Kopp: It depends on, uh, what kinds of, uh, customers you're focusing on.
If you're talking about, uh, enterprises, I would definitely not go for Xing because Xing, uh, from my experience is, uh, good for more small, medium business, uh, companies. But, uh, the big brands and the big companies [00:58:00] and the big networks of those companies, you will definitely find much more on LinkedIn. So I would always rather, uh, start with LinkedIn.
Also, in terms of using tools, which I love, uh, like, uh, sales never gave, um, on LinkedIn. This is just a great, great tool, very, very, uh, solid for pipeline building. So, uh, that's what you don't find on, on Xing.
Marcus Cauchi: Excellent. And for those of you who are unfamiliar with Xing, it's X I N G .com. Yeah.
Tobias Kopp: Yes.
Marcus Cauchi: Tobias Kopp. Thank you.
Tobias Kopp: Marcus. Thanks for having me. It was a pleasure. Always good speaking with you.
Marcus Cauchi: Excellent. This is Marcus Cauchi signing off once again from the Inquisitor Podcast. If you found this enlightening and helpful, then please like, comment, share, and subscribe. And if you are interested in entering into the German or the DACH market, then please do get in touch with either me or with Tobias, and also remembers Zach Selch.
[00:59:00] He's got a great pedigree of working within, uh, the international market. In the meantime, if you want to get hold of me, then please email me at firstname.lastname@example.org and stay safe and happy selling. Bye-bye.