Economy

Lessons in U.S. Expansion

How a focused push into the States earned Fusion Learning $900,000 in foreign sales last year (with some bumps along the way)

Written by John Lorinc

When Tim Magwood and Kevin Higgins set up Fusion Learning Inc. in the early 2000s, they started with a handful of local clients in Toronto. The pair watched their sales training outfit grow rapidly. Soon, the client list included national firms and then the Canadian divisions of multinationals, such as St. Jude Medical, a Minneapolis manufacturer of such medical devices as pacemakers.

St. Jude is a medical technology powerhouse, with 2012 revenue of US$5.5 billion, 16,000 employees worldwide and a presence in more than 100 countries. The giant firm retained Fusion in 2005, and was so pleased with the results, it asked Fusion to deliver its training modules to international sales teams in Japan, Europe and Australia—three markets that account for more than half of St. Jude’s revenues.

Suddenly, upstart Fusion was a global firm. Yet the company’s first sustained foray into the international marketplace turned out to be far more complicated than Magwood and Higgins had expected when they made the deal.

To service St. Jude’s sales training needs, Fusion had to scramble to find contractors and translators for the different geographical markets. But the firm wasn’t able to amortize the additional outlay: the market-specific materials for St. Jude were too specialized to be adapted to other clients.

“In a way, that was great for us because we could say we’ve done work in 10 countries,” observes president Kevin Higgins, noting that the relationship lasted three years. On the other hand, he adds, “the cost for us to do that work was dramatically higher.”

Lessons learned

The experience, Higgins says, “influenced us to say, €˜we’re not prepared to be global.'” Instead, the company set a clear strategic focus for international growth: establish itself as a player in the North American market, which is estimated to be worth almost $2 billion a year, by focusing on Fortune 500-type clients with Canadian subsidiaries. “Whenever we work in Canada and there’s a U.S. parent, we should be talking to those people.”

To open those doors, Fusion managers working with a multinational client identify the senior-most Canadian executive, and then inquire about a referral to the sales managers at the U.S. head office. But, Higgins says, “we’ve got to complete some great work that they’re thrilled with” before making the request.

Fusion’s focused push into the U.S. market has propelled it onto Selling Power magazine’s top ten list of sales training companies. The $7 million-a-year company, which ranked No. 318 on the 2013 PROFIT 500 ranking of Canada’s Fastest-Growing Companies, generated more than $900,000 in foreign sales in 2012, almost seven times more than five years prior. The foray into the U.S. has been so successful, in fact, that Fusion is in the process of opening a New York office and an American division, its first outside Canada.
Higgins is not a stranger to the U.S. business environment, and he recognizes that adapting Fusion’s MO will be critical. Before joining Fusion, he’d spent more than a decade working for Forum Corp., a Boston-based sales training group with offices around the world. “I learned that although [Canadians and Americans] are similar, we’re not the same. If you think and act the same, you won’t be successful.”

In his view, American clients will make decisions more quickly than Canadian executives. But the implementation south of the border can actually take much longer, whereas Canadian clients, once they’ve signed on, will want a project completed very quickly.

Large U.S. accounts are also more complicated. In Canada, Higgins says, the key clients for a given customer are often located in Toronto. With American firms, Fusion finds itself working with as many as eight internal clients who are responsible for different geographic regions. “As a supplier, you have to recognize that [diversity] and work with it.”

Moving south

In the past three years, but especially since 2012, Fusion had been toying with the notion of establishing a U.S. subsidiary instead of servicing its growing American client roster from its Toronto headquarters. With the U.S. economy struggling, many large firms have been looking to boost their sales operations as a means of spurring top-line growth.

They cemented the decision when Higgins persuaded a former colleague, Alyson Brandt, to step in as Fusion’s U.S. president and grow the company’s newly established subsidiary based in midtown Manhattan.

Initially, that office, which officially opens in mid July, will function as a satellite sales office. Brandt, who has spent 25 years working in the sales training sector, will grow the U.S. division into a full country office that will source and services its clients.

Higgins knows that Fusion’s move is about much more than logistics. While the company claims to be the largest sales training player in Canada, the international market includes huge global players such as Forum, Tampa-based Achieve Global and Sales Performance International.

“We have won a few deals in the U.S. against key competitors and they have started to notice us, but still we are flying low on the radar,” he says.

Those low profile days will be over very soon.

Originally appeared on PROFITguide.com