When American Companies Expand to Europe

For years I advised American companies that wanted to expand to Europe. They came with their brand and their marketing system. Everything optimized for the American consumer. Everyone thinks what worked in the USA should work here the same way. The same campaigns with the sprawling Black Friday discount battles and an emotionality that nobody in Europe understands. One to one.

But Europe is different. An American marketer and sales guy has the manageable cultural variables of his home market under control. The gaps are covered by a strong and stable consumer sentiment. But Europeans have so far been unable to agree on either a common language or a shared culture. European diversity is pure paradise for an adventurous tourist. But pure horror for marketing and sales departments. Every country works differently. Diverse are not just the genders but also the laws and of course the consumer habits. What works in France is a non-issue in Germany. There is little you can simply push from one market to the next.

My first task is always to explain exactly that. In detail and entertainingly because there are some nice anecdotes to go with it. But the decisions had usually already been made before anyone had looked at Europe. Budgets were set and my consulting was not supposed to question their assumptions but go straight into execution. The dollar signs were already shining in their eyes. Similar population size and measurably solid purchasing power were the relevant metrics. The only topic was how to get around the annoying taxes that in Europe are not only high but also quite complex.

The pattern was always the same. The picture in their heads was supplemented with generously projected sales figures turned directly via EBITDA into fantastic net profits. The full bouquet. Every objection was pessimism. That’s how they see it. Big, bigger, cowboy. Everything that contradicted the picture was treated as irrelevant. Thinking first and then deciding didn’t happen. It would have challenged the basic assumption. Nobody wanted that of course.

Business was running and now let’s grab the Europeans. Free scaling, that’s how they understood it. The complexity and the associated costs were ignored because they would have ruined the picture. Many even had to expand because revenues in the USA were extremely synthetic. If you turn off or reduce a marketing channel it backfires immediately. Revenue drops but fixed costs remain. So the way across the pond is only logical as a territorial expansion step at lower costs since the setup work had already been done. They didn’t know that this approach was fundamentally wrong.

They tried it with control. Over the trade relationships and over the prices. Control over the marketing channels and it spiraled out just as it spiraled out in the USA. Every consumer can be bought, no matter the price.

I tried it with education and logic. Simple strategies that everyone could agree on. And they actually listened. Where they listened it worked very well. Where the willingness to learn was less pronounced, less so. What stood out: decision makers listen. Specialists don’t like to leave their US cosmos and won’t venture onto unfamiliar terrain.

I learned one thing from this. The quality of a decision naturally depends on the quality of your data. But even more on whether you’re willing to fundamentally question your own assumptions when new facts come in. Data always confirms what you want to see if you look at it from one perspective and ignore the others.

Today I approach it more carefully. I immediately take the numbers apart to create a basis for discussion. The client’s system data is supplemented with European market data. I’ve built an ontological system for this that outputs the data in a structured and case-specific way. Then comes the assessment of whether it works. Never without data, but always with the complete picture.