Situation: A service company wants to expand its geographic base. It promises a 30-minute in-person response time to clients. It has established deep penetration in its existing market and sees opportunity in neighboring areas outside of its current market. How do you plan for geographic expansion?

Advice from the CEOs:

• In many respects, the company’s situation is similar to a franchise model. It has established a successful business model. The company has also optimized its model for staff, technology, procedures, accounting and service provision. This creates the opportunity to clone the current model in a new geographic market.
• It is important to study the competitive landscape in adjoining or more distant markets.
• Leverage current customer references. Create a client referral incentive program among current and new customers.
• Target initial clients within the target geography as reference clients.
• Use direct mail to potential customers.
• Recalibrate the company’s search engine optimization to reach the new target geography.
• Communicate the company’s points of differentiation. Highlight customer results in the existing market to potential customers in the new market.
• Target companies that want and need the service that the company provides. These will most likely be similar to existing clients. Experience with existing clients will serve as reference points.
• Successfully selling function, as opposed to brand, depends on a business model that matches business volume with capacity to provide reliable service. It also assumes that market dynamics in new markets will be similar to the existing market.

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