A blog for Finnish growth entrepreneurs who are considering going abroad – and those who have already tried and returned.
Average sales growth for our customers
Completed project
Internationalisation project in the Nordic countries and Europe
There is one mystery in Finnish business history that few people talk about.
We have the best engineers in the world. Ask a Swedish and a Finnish engineer to solve the same problem, and more often than not the Finnish solution is technically better. It lasts longer, uses less energy, works in colder conditions and crashes less often.
And yet. In international trade, when it comes to choosing a product, whether it’s industrial machinery, software, furniture or food, the Swede sells for more, faster and more widely. Meanwhile, the Finnish product, often the technically superior one, is waiting in the back room for someone to find it.
How is this possible?
A few years ago, a Finnish industrial manufacturer entered the Central European market. The product was ready and technically superior to its competitors. The sales manager was good. No deals were made. Five years later, the company pulled out and closed its local office.
At the same time, a Swedish manufacturer entered the same market with a technically more modest product. Three years later, it was the third largest in its segment.
The reason was not the product. It wasn’t the price, because the Swedish one was more expensive. It wasn’t the marketing budget.
The reason was that the Swede had been sitting with local buyers for months before the launch. Not just the interested ones, but also those who were happy with their current supplier. And asked questions that the Finn didn’t ask:
These are not questions about the product. These are questions about the customer. On top of the answers, the Swede built sales, marketing and delivery that fit in with local daily life. The Finn brought with him a model that worked in Finland and was slightly wrong in every detail in the new market.
A single detail would not have brought down a single shop. Twenty details brought them all down.
There is a deep-seated assumption in Finland: a good product defends itself. If you really build a good thing, the world will find it.
The assumption is wrong, because the world does not recognise quality. The world recognises the version of quality it can read. A local customer does not compare technical figures to five decimal places. He compares whose salesman arrived on time, whose offer was understood by his management team, who called back in half an hour and who could answer a question that was not asked in the RFP but which the buyer had been thinking about for weeks.
These are not product features. They are expressions of customer insight, and they are not built by reading reports from Tampere.
The Swedes have known this for a long time. They’ve been marketers for two hundred years: they go and tell the customer what they should buy. We do well and then shut up. These are different professions. Both are needed. But abroad you need the first one.
Almost every Finnish company going international goes through the same pattern.
First, the market analysis: an 80-page report with market size, growth figures and competitors. Technically sound, but built from public data that all competitors have. Then a sales plan with timetables and budgets. Looks good to the management team. Then a launch that pulls the first six months with enthusiasm.
Then the customer who seemed to buy, didn’t. Pricing that was supposed to work didn’t. A year and a half later, the figures look a sixth of what was expected. A decision is looming: double the stakes or pull out.
Both are expensive without the one thing that was missed at the beginning: in-depth interviews with local customers. Not the pre-interested ones, but those who are happy with their current supplier. In the local language, by an external interviewer.
This phase costs a few percent of the total internationalisation investment. It often determines the direction of the whole project. Yet it is most often omitted
If you are thinking about or in the middle of internationalisation right now and something is not going as expected, ask yourself three questions.
One: can you name three local customers who can tell you why they would buy from you? If the answer is “we’ll find out when we get to market”, stop. It is this assumption that brings down most projects. The local buying decision is made before the launch, not during it.
Two: whose job do you have to be the customer expert for this project? Not the marketing director or the export manager, but the person whose job it is to keep the customer’s point of view awake in weekly meetings and to argue with sales and product development when necessary. If the role is not designated, it’s nobody’s. And what’s nobody’s doesn’t show up in decisions.
Three: how much of the cost of internationalisation is spent on consulting customers before the launch? If less than 1%, you are at the Finnish average. If between two and five percent, you are in the top three. If zero, don’t go there. It’s not about the money, it’s about whether you go in assuming or knowing.
Every recession gives rise to two types of business.
The first cuts costs and expects the world to return to normal. Makes sense in the short term, but when the market turns around, this company will be in last place, because nothing was created during the downturn to differentiate it from its competitors.
The other type uses quiet time to do what cannot be done in a hurry. In a recession, interviewing clients is easier: people have time and competitors are more cautious. When the market turns, the insight built up is ready for a strategy. You have a six-month head start.
Internationalisation is just such an investment. When domestic sales take off, there is never the time or the promise to start. The recession will defuse the tension: when the domestic market is slow anyway, there is room for customer insight in the new market.
Not everyone should go international. But if it’s in your strategy someday and domestic growth is stalling now, it’s worth starting to understand your customers in a new market now. Not next year. Not when the market turns.
One way: believe that all markets are the same and that the model that worked in Finland will work elsewhere with minor regulations. In practice, this is always wrong. Buying processes, communication, pricing and even bid structure are different in every market, and you won’t find any differences in public data. You can only find them by asking.
Method two: to believe that all markets are different. This mistake is made after the first failure, when management concludes that the product is not internationally competitive. Often the product is fine, but the packaging, sales process and communication are not right. Distinguishing between these two diagnoses is difficult without an outside interrogator. This is why companies withdraw too early or continue on the wrong track for too long.
This is why the customer insight survey is conducted twice: before the launch and about a year afterwards. The first tells you what to build. The second tells you what to fix
I won’t stop here with a call to book an appointment. You know yourself how to respond to that: by ignoring it.
Instead, I ask for one concrete thing. Next Monday, call a potential client in the market you are considering expanding into. Not an existing customer, but one you haven’t sold anything to. Don’t give a sales pitch. Be honest:
About one in three say yes. You learn more from one conversation than from all the reports combined. Once you’ve done that, call another. And a third.
This is not market research. This is the start of understanding the local customer from your own experience, not through a consultant or through reports.
This is what the Swedes have been doing for two hundred years.
And that’s what they have to teach us.
We have experience of building local customer understanding – impartially, in the local language, from the right people. Not reports for the shelf, but a tool for the first transaction.
