International Expansion: PR firms must do the groundwork to achieve overseas success

International expansion can be lucrative and rewarding, but you need to do some serious research and find the right team to make it work.

As if one market wasn’t hard enough.

One of the most challenging accounts I ever directed was a distribution company, covering 42 countries. This was before email was ubiquitous and so fax was the main form of communication. To indicate the urgency of a request to agencies we added a clip art bomb – complete with burning fuse – to fax cover pages. As you can imagine, in many countries this was less than acceptable. Understanding cultural differences is just one reason why international campaigns can be challenging for UK agencies.

International expansion is attractive – differentiation; blue chip brands; a bit of travel (although this gets old quickly); a more attractive employee brand, and of course lucrative account co-ordination fees. But you should be crystal clear on why you want to expand internationally. It’s not a short-term fix for a fee shortfall, but as a strategic play to build value it can be well worth committing the necessary management time, focus and tenacity.

The first step is to find suitable partners to deliver for you outside of the UK. The International Communications Consultants Organisation is a good place to start (it has 2,500 agency members in 32 countries), as are networks of independents such as The Network.

The starting point for selection is that the agency has the right sector experience and offers the necessary disciplines. But equally important is their approach to doing business.

In my experience money and poor delivery are the two main reasons for the collapse of international agency relationships, so you need to investigate that potential partners are a good cultural fit commercially.

This means asking direct questions to get beyond the initial niceties and understand payment terms, systems and proc­esses and how they evaluate their success. This may seem like a lot of work before client work starts but it is better to kiss your frogs before the pressure is on.

You also need to know how you are going to make money from the relationship. You will get paid for doing the UK work, but is there the budget for co-ordination of international agencies? If not, who is going to carry this financial burden? Are you looking to take a slice of the partner agencies’ fee? How long will these arrangements last? What currency will the client be paying in and who is carrying the currency risk as exchange rates shift? Under which legal jurisdiction will contracts operate? All of these issues need to be agreed and documented before the first client conference call is held.

Lastly, it is worth considering that agency co-ordination is the least glamorous and one of the toughest jobs in agency life. Few people join the agency world to do it, and you need to make sure that you have team members with the right behavioural attributes to make a success of it.

After all, the best commercial planning and negotiation in the world will count for nothing if client work is not top notch.

Richard Houghton is a business consultant:

This article comes from the February edition of PRWeek UK.

Click to read the full range of features, analysis and opinion on international expansion, along with the case studies on nine agencies' expansion plans.

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