How Your Business Can Succeed in Latin America- 5 Quick Tips

Posted by on May 23, 2011 | 0 comments

For roughly the past 20 years, I have worked in the media business (first radio, then the music business, followed by TV and now online) and much of that time has been spent focused on the Latin American market. In that time, I have observed American companies make similar mistakes when attempting to reach this large, and growing, consumer base. Some of the errors I see are cultural ones, some are language-based but most seem to come from companies simply not doing their homework.

Consider this a cheat sheet on the five major pitfalls that I have seen hinder a successful business launch.

 

1. KNOW YOUR AUDIENCE

 

First, some background: According to comScore, the Internet population of Latin America grew 15% during 2010 to 112 million people. Venezuela and Colombia showed the highest growth, while Brazil led the region in having the most engaged users.

 

I want to stop here, at the risk of offending some readers, to point out error number one that I have seen: Brazilians speak Portuguese and the rest of Latin America speaks Spanish. As shocking as it may seem, I have worked with plenty of American executives who did not realize this and plowed ahead with their Spanish-language marketing plan for the entire territory. Brazil is home to nearly 200 million people, 40 million of whom are online, but they don’t speak Spanish. This fatal error falls into both the “cultural” and “language” categories I mentioned at the outset. In any setting, it is critical to know your audience. Part of knowing your audience means knowing what language they speak. (More on Brazil in a moment.)

 

2. “IF IT WORKED HERE, IT WILL WORK OVER THERE”

 

The second error I see time and again is when US or other English-language companies repurpose their content or service assuming that “if it worked here, it will work there.” You might be able to get away with that attitude in the music business since the fact remains that even in our multicultural global village, American and British music continues to dominate the worldwide music scene. Other forms of content and web-based services or apps do not necessarily translate as well and market research is a must. Latins know a lot about Americans, but the reverse is not true so we’re back to  ”know your audience” again. Latin American Internet users have been bitten just as hard by the social networking bug and twitter has some of its highest market penetration rates, with Chile and Argentina ranking 11th and 13th globally, so the engagement is there. Now it becomes a question of finding your market sweet spot.

 

3. DO YOUR HOMEWORK FIRST

 

The third most common error I see is naiveté or, dare I say, arrogance. This can sometime spell the demise of a great idea, product or service, too. Just because you may already have great name recognition and a good reputation, charging US prices for your app, conference, product or service might not be the best way to go. One must also take note of variances in population and numbers of people connected to the Internet from country to country, and adjust your expectations accordingly. Mexico is not the same size as Venezuela, for example, but Venezuela had a 27% growth rate in 2010, the highest in the region. Internet companies are taking hold in Latin America, from Google data centers to online pay systems. The economy is rebounding faster than the US, the middle class is booming and technology infrastructure is superior in some cases to that of the US. This is a pattern I see repeating from my days in the cable TV business. Many countries, like Argentina for example, never laid the cable TV infrastructure that we spent so much money on here. Instead, they jumped right to fiberoptic cable and were therefore able to offer sophisticated digital tiering before that was the norm here in the United States. Similar technology “leapfrogging” is taking place throughout the territory.

 

The torrid economic growth is Brazil is expected to level off at around 4-5% per year, which would even make China green with envy. The government is committed to upgrading its dilapidated infrastructure, and many analysts see big expansions of consumer markets as people join the middle class in increasing numbers.

 

4. FIND A LOCAL PARTNER

 

I might even go one step further and say, depending on your business and your goals, find several local partners. Mexico is not Colombia. Colombia is not Venezuela. Venezuela is not Argentina. And there is only one Brazil. Don’t paint all of Latin America with the same broad brush. Historical, cultural and, yes, even language differences among Spanish-speaking countries need to be deftly navigated and you need someone on the ground to help things go smoothly.

 

5. THE AMERICAN WAY OR THE HIGHWAY

 

Yes, the US has the world’s biggest economy and we know how to make money. But long term relationship building is critical when doing business in Latin America. It takes time to build trust and understanding so take the time to learn how and WHY business is done in country. If you come in with guns blazing with the attitude “we’re gonna show these guys how business gets done,” you’re going to run into some serious problems. Listening and learning will go a lot further than pushing your way of doing business. As my grandfather used to tell me, “No one ever learned anything while they were talking.” (I guess I would correct him and say, “Except maybe  a foreign language.” But you get the idea.)

 

To recap- do your homework before jumping in. Remember that in every way, Spanish speaking Latin America and Portuguese- speaking Brazil are NOT the same market. (Market, cultural and social conditions vary greatly within Spanish speaking countries, but I said this was a cheat sheet, not a 1000-page textbook.) Make sure your product and message translates, and I don’t just mean that in terms of language. And, remember, a little humility can mean the difference between success or failure. Working with someone who knows that lay of the land(s) can help maximize your investment.

The comments are yours.

 

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