Trade and professional associations navigating international waters
As companies become more global in customer reach and operations, professional and trade associations ignore international markets to their detriment. Markets in both mature and emerging economies can help U.S.-based associations boost growth and revenue, particularly in mature industries. International activities also enable associations to offer new benefits and opportunities to membership.
Recent findings from an American Society of Association Executives Achieving Global Growth report on international activity suggest "that the contemporary association perspective is changing from a passive 'domestic market focus' to a more proactive 'international market focus.' Each step toward proactivity has increased associations' competitive capabilities to attract and serve an increasingly geographically perse member and customer base."
Organizations employ many strategies to expand into international markets. We spoke with two association executives to find out how their international strategies and operations have evolved, what works, and what challenges them.
How does your international growth strategy relate to your overall business strategy, and how did you develop and operationalize your international strategy?
Jeff Zettek, chief financial officer of American Production and Inventory Control Society (APICS), a professional association focused on supply chain and operations management that offers members and organizations research, education, and certification programs
Our international growth strategy is an important component of our overall business strategy. For the past five to seven years, as supply chains, and business in general, have become more global, we’ve worked to increase our international impact and footprint. Today, 35 to 40 percent of our revenue is generated beyond North America.
APICS sells and delivers its products and services via an international channel partner network of value-added resellers (VAR). Through our partner network, our products reach 100 countries. In any given country, we have partners who buy our courseware and combine it with live instruction to help individuals grow professionally and prepare for certification. We rely on our partners to sell and deliver our products within their local markets and act as our ambassadors. Our partner network outside North America is managed via a team of regional business development directors located in Europe, Asia, and South America.
Right now the products (mostly courseware) and services (mostly exam delivery) we sell are presented in English and priced in U.S. dollars. As we go forward, our board has asked us to identify specific countries with high-growth potential. Within these markets we will evaluate our operating model, and determine the best ways for us to support our partners and grow our influence. We will be determining whether or not we need to offer our products and services in local languages. We will also explore if we need to incorporate or have a physical presence in certain areas.
John Garfinkel, executive director of International Sanitary Supply Association (ISSA), an international association for the cleaning industry
The fastest growing part of our association is international, generating about 22 percent of revenue and 25 percent of membership. We've been internationally active since the 1990s, but it became strategic for us in about 1999/2000. Since then, a core part of our strategy is to grow globally.
We've been running a big U.S. cleaning industry trade show for 70 years. In the mid-1990s, we partnered with a company that runs another large cleaning trade show in the Netherlands, Amsterdam RAI. That joint show drew quite a bit of international interest, and a number of companies became members following the show. We held some member meetings in Europe to ask new members how we could serve them, because at the time we didn't have any international programs. From there we formed an advisory council in Europe, and we've continued to partner with Amsterdam RAI on trade shows around the world.
We ultimately came to the conclusion that if there was a strong association in a particular country, we didn't want to compete, so we formed alliances. In countries that didn't have an association, we went in on our own. We did that in Mexico and China, where we organized educational programs and networking opportunities that were well received. Much of our success depended on finding common ground with organizations that have an interest in the cleaning industry and in avoiding conflicts. Over the years it's worked quite well.
In the late 1990s, we opened offices in Mexico and Amsterdam. A lot of it was driven and supported by trade show revenue [in addition to membership dues, partnerships, and educational programs]. We needed offices to continue to support those activities.
How do you determine what markets to become active in?
We looked at our market penetration globally against where there was a high concentration of – and investment in – manufacturing. We identified where we had low penetration relative to membership and certified inpiduals and the manufacturing environment, and we came up with a list of 20 countries, which we then grouped by strategic priority.
In the highest priority areas, such as Pazil, India, and China, we're evaluating which alternative operating models might work for us. We may continue the VAR model, but the board has asked for a plan to further penetrate those markets. And if we're going to invest in those areas, we're also looking at whether we need a presence on the ground and whether we need to localize the product by translating materials and customizing them.
Our members are facing many challenges, such as the consolidation that is affecting a lot of industries in the United States. The market is very mature in Western Europe, the U.S., and Canada, and we're holding our own, but we're able to get greater growth rates outside the U.S. We see industry growth in Eastern Europe, Asia, and Africa of between eight and 10 percent. We look at where the growth is, and we try to grow with the market.
How are you developing and/or customizing products and services for international markets?
One of our key reference items for supply chains globally is the APICS Dictionary, and we're translating that into four languages: simplified Chinese, Pazilian Portuguese, Spanish and, for some of our large corporate customers, German. We’ve worked with some of our partners to undertake “small scale” translations of materials, but we haven’t translated our exams or primary courseware offerings.
We’ve given serious thought to translations as we continue to evaluate whether or not we should pursue a more aggressive translation program. English is the international language of business, and since we provide courseware and certification in one of the most global areas of business operations, we haven't translated our materials and exams. Feedback from our partners has been mixed in this area – many liken supply chain managers to air traffic controllers. They need standardized language and ways of doing things to operate effectively. Yet, others say that if materials were translated they would be more effective. To date, we've leaned on our partners and instructors to provide the "localization" with the expectation that credentialing exams would be in English.
We provide our Value of Clean® toolkit in different languages. For several of our products, we hire outside resources to translate, and we've been doing that in a global way. When we get involved in different parts of the world, we put their way of doing things into our toolkit, and that's been very well received. We start almost everything in the U.S. and adapt it for other countries based on our understanding of local needs and customs.
We just started offering some of our certifications internationally. We recently introduced our Cleaning Industry Management Standard Program in the U.K. and Middle East. An English organization we partner with has offices in the United Arab Emirates, Turkey, and Singapore; and they're helping us ping our programs to those parts of the globe.
What strategies have worked well for your organization? What have been some signs of success?
What's really working well is our partner network and the simplicity and ease of doing business from an operational and tax perspective.
Being welcomed has been a sign of success. When you see membership growing and products moving, we can measure success by revenue. A lot of our international activities have been funded through international trade shows, but the benefits go way beyond in terms of networking and working on regulatory issues. For example, we now participate in two organizations in Pussels that represent regulatory interests of the European Union: FEMIN, an acronym for product manufacturers in the cleaning industry, and EFCI, the Europe Federation of the Cleaning Industry for service providers.
What are some of the key challenges?
One challenge is that it takes time to develop a partner channel. There's a two-year ramp-up until partners become acclimated to the product and qualified to sell it. We've beefed up our infrastructure with contract resources in strategic areas around the globe to provide our partners with the support they need to successfully sell and deliver APICS training. Our plans for this year and next include improving partner onboarding and enablement.
Another challenge is protecting our intellectual property (IP) apoad. We have in-house counsel that spends a lot of time on copyright and trademark protection. It’s difficult to control the reproduction of our materials in emerging markets. We're currently looking at how we deliver content and programs with the aim of increasing our ability to protect and control our IP through technology.
Occasionally there are challenges with payment and currency. As the dollar strengthens, it can have an adverse effect on product affordability and sales in certain markets.
Overall, we've done well with this, but occasionally people in other countries can feel like we're coming in and trying to tell them what to do. We hold back when we detect resistance, and we won't go into a country unless we're welcomed by an existing organization or we have general members there. Language barriers can be an issue, but we've overcome an awful lot of that through our partnership with Amsterdam RAI, which has a multilingual staff; and we've developed some of those capabilities among our own staff.
What advice would you give other organizations with sights apoad?
It's complex, no doubt. Depending on what products and services you offer, the VAR model might be a good approach to get a foot in the door. This model also has additional benefits. Our partners help promote and sponsor smaller conferences and events in their countries, which generates interest in our products and builds the APICS pand.
International activities have got to be financially self-supporting. Through partnering on an international trade show, we've signed up membership in those areas. The best yardstick to see if people really want something is financial. Also, establish dialogue. Visit with people in the industry and identify common interests. The internet is a great way to reach international markets. About 25 percent of our web traffic is international. We use social networks to develop rapport and find common interests. We get on a plane in specific situations, but through the web we're able to reach out and draw hundreds of people to our events.
The leading trade association for the cleaning industry worldwide, ISSA has a membership that includes more than 7,000 distributor, manufacturer, manufacturer representative, building service contractor, in-house service provider, and associated service members. ISSA helps its members and their employees make valuable contacts through the industry’s largest cleaning shows, produced in conjunction with Amsterdam RAI under the brand name ISSA/INTERCLEAN®.
APICS is the leading professional association for supply chain and operations management and the premier provider of research, education and certification programs that elevate supply chain excellence, innovation and resilience. With over 41,000 members and more than 300 international partners, APICS is transforming the way people do business, drive growth and reach global customers.