?? Skechers, International NPS, and the Value of Coaching

Did you know that Skechers is the third-largest footwear brand in the world? Their international growth has been so successful that it propelled them onto the Fortune 500 list this year. Read on to learn more, but first, let's check out their performance on the New York Stock Exchange.

While there is definitely seasonality in this type of business and macro trends for sure play into the ups and downs of any company's share price, the general trend is up and to the right. Skechers made some strategic bets on international growth that are a big part of why they're seeing such success.

Here's a recent analyst take from December 2023 (emphasis mine):

SKX opened 72 company-owned stores in the third quarter, with a focus on China and other markets. The company's international business continues to exhibit solid momentum, with international sales accounting for 61% of overall sales in the third quarter. Sales in the EMEA and APAC regions increased by 2.3% and 14.4%, respectively, on a year-over-year basis. (Source)

Skechers has seen their international segment outpacing domestic growth, quarter after quarter. International was "only" 57% of sales in Q1 2022, and as of December has increased to 61%. Check out what their analyst coverage said, roughly eight quarters earlier:

International Sales Are Even Stronger: Skechers has a strong global brand in over 180 countries. While the company’s domestic business is strong, its international segment accounted for 57% of total sales in 1Q22 and is growing even faster than its domestic segment. Since 2016, Skechers’ international revenue grew at an 18% CAGR, and last year alone, the company’s international revenue rose 37% year-over-year (YoY). (Source)

Skechers, like all businesses, was affected by the pandemic. They not only have major online components to their business, but also have a huge retail channel that was obviously affected by lockdowns, travel bans, manufacturing and supply chain disruptions, and so on.

But no matter what else is going on, truly great companies keep investing in international when it's clearly delivering high rates of growth for their overall business. "Going long on international" is a bet that helps a company's leaders keep their heads down and focus on the very best paths to adding new customers and revenue, in spite of shorter-term, macro-economic trends.

Don't take your eye off of your international business when it's delivering growth for you. If anything, shout from the rooftops about how strategic it is!

It's hard to get much attention for the international share of a business when it only represents a small percentage of overall revenue. How fast is the international business adding growth, compared to your domestic side? This is often one of your strongest talking points to advocate for more resources and attention, especially in the early days of international expansion.

Strategic Plays You Can Borrow from Skechers

Not all international bets are made equal. How you intensify your present in new local markets matters just as much as where and when. Let's check out some of the specific strategies Skechers has been employing recently, as they continue to grow internationally:

• Find the best local partners and build from there. Earlier this year, Skechers acquired its Scandinavian distributor, Sports Connection. This partnership took many years to build. As their distribution partner, Sports Connection helped the company gain an initial foothold in these markets. Now, Skechers is doubling down and owning a key local distribution channel.
• Bring local elements directly into your products. I love how Skechers launched a collab with Spanish artist Ricardo Cavolo to not only infuse beloved local art into their product, but to get people to rush into stores for limited edition footwear. When you can create this kind of buzz for your brand, it has so many side benefits. People post about it on social channels. Shoppers see lines outside the store. It's a proven strategy.
• Let global influencers escort you into a new category. Skechers made a really smart move signing a sponsorship with Harry Kane. He's one of the most widely recognized athletes in the world. Not only will this help them to gain more local fans in various European markets among football (soccer) fans, but it helps them gain greater visibility for their brand in the category of athletic footwear, not just for the comfort footwear they're known for.
• Invest in local ambassadors. Skechers has been bringing on an array of beloved local celebrities that are aligned with their brand in many of their key growth markets, including Chesca (Spain), Myleene Klass (U.K. and Ireland), Joanna Krupa (Poland), Vanessa Mai (Germany), Benedetta Parodi (Italy), and former footballers Jamie Redknapp (U.K.), Frank Leboeuf (France) and Michael Ballack (Germany).
• Truly adapt local websites. I love how the different versions of the Skechers local websites are not only well localized, but have a great balance of global and local content (see the German version below). That's tough to pull off, but the stakes of not getting it right tend to be high for B2C brands where immediacy of purchasing decisions is high, and tolerance for content that's not relevant is very low.

How I wish more B2B companies would follow these kinds of plays! Whenever anyone asks me for best practices for expanding into local markets in B2B SaaS, I inevitably point them to B2C examples instead. Skechers is one of many great B2C brands you can borrow from if you work in B2B.

Reminders:

• Talk to your customers in other markets and understand their needs.
• Reach out with an open mind to understand local customers and local nuances.
• Build your global brand by focusing on developing your local brand in each market.
• Figure out who your best influencers, channels, and ambassadors are in each local market.
• Learn what local customers need from your product, and how they perceive value differently.

Get closer to local customers. They'll give you the insights your company needs.

You just have to prioritize them!

Building a Strong Global Brand Takes Time

To wrap up this section, here's a personal anecdote.

I first noticed that the Skechers brand was growing in popularity overseas when my family members in Europe would stock up on their shoes when visiting us in the United States. Buying them online from Europe was nearly impossible back then, so I began buying their products and also sending them over to the fam in Ireland. Their love for the brand far outweighed shipping costs!

Well today, the brand love is just as strong, but the local reach is far greater. Whenever I visit Europe now, I see the brand distributed and advertised widely. It has been so interesting to watch the brand evolve and grow globally over time. But it's also a testament to the fact that Skechers was no overnight success in these new local markets.

Smart and strategic growth is the secret to building a globally viable brand.

And that takes time, patience, and commitment.

Using NPS at a Global Company

Your data might not say what you think it says

If you've ever run a survey to measure customer or employee satisfaction in different countries, you might have run into a problem. Not every culture and country uses rating systems the same way. This means that you can't always interpret the results consistently across markets.

Many companies use net promoter score (NPS) across geographies, and encounter the same challenges. For those unfamiliar with NPS, it's a survey in which you measure your "promoters" (favorable respondents) and your "detractors," by asking this question:

How likely is it that you would recommend this company to a friend or colleague?

NPS is pretty common among American companies especially. Some use it not just to mention customer satisfaction, but also for users of a software product, and even for their employees (eNPS).

That's why I was very excited when my former HubSpot colleague Tom Murdock, VP Global Sales at SurveyMonkey, reached out to share a helpful resource (thanks, Tom!)

I was really glad to see that this report highlighted a major trend I had long observed throughout my own career working internationally, and doing market research:

Customers in Latin America will usually rate their experience higher on average than their US counterparts, while Japanese customers tend to rate lower.

This is something I highlighted previously in this HubSpot blog post.

SurveyMonkey observed the same trend.

What I found interesting from the SurveyMonkey report was this quote:

"Japanese and Korean people may have a positive attitude toward the company, but they will provide low NPS scores because they are reflecting that they would not run the risk of ruining their relationships with their friends by making recommendations. As a result, in the NPS system these people will be labeled as detractors, when in fact they are 'ambivalent customers.'"

When I looked at NPS studies globally in a former life, I noticed a similar trend in some markets, where respondents took the NPS question very literally. One even wrote, "I would not recommend this software to a friend, because I do not have any friends who need this type of software."

It's all about familiarity and context.

Americans reading the NPS question have usually had more prior exposure to it. They typically (but not always) know that the question implies, "...assuming you have a friend who needed this type of product or service." Customers in non-US markets often do not know they should assume this. It's not explicit.

It's not only NPS that can be difficult to use across geographies. Most survey questions tend to evoke similar cultural differences. In fact, one colleague of mine who worked at Forrester explained that, in her many years of experience, she found the trends of "enthusiastic" responses coming from Latin America to be consistent across all surveys, no matter the topic.

And with customer service having a much higher bar in Japan, it's no wonder Japanese customers are reluctant to ever give the highest score. As one of my team members in Japan once told me, "Getting the highest score in Japan is impossible, even for a Japanese business." In fact, in my consulting days, I saw this was true. Indeed, even Japanese multi-nationals I consulted with found that their Japanese customers rated them the most "poorly." Their international customers were far "happier," per the NPS scores. But of course that isn't true, because you can't always assume that a low score in Japan means your customers are unhappy.

In America, the expression is, "the customer is always right." In Japan, the saying is "the customer is God." Expectations around customer service are elevated in Japan compared to many other countries.

Plan for Your Satisfaction Scores to Vary By Market

For another take on this topic, here's a helpful chart from XM Institute (source). Their data shows that your customers in different countries will rate your company differently, whether they like you or not. The degree of variability is what's most interesting here. You can use this to map your own scores and identify if the gaps are similar by country.

So what do you do? A few key pieces of advice:

1. Keep measuring. Don't throw in the towel just because this topic is difficult. Measure NPS and customer satisfaction regardless. Do take a look at your data cuts by country, but know that you won't be able to instantly or easily compare the country scores the same way you do for other cuts of data.
2. Look for correlations. Look at other data sources that give you a measure of relationship health, and compare them. One thing I like to do is check customer retention figures / renewal rates by country. If your retention is high for a given market, this might be a helpful indicator, even if satisfaction scores appear to be low. Do you see any trends or patterns between these data points? Does retention go down when NPS does, for example?
3. Keep nudging the scores up. No matter what the "baseline" score is for a market, you can always seek to improve those scores. Measure the incremental change. Rather than looking at the scores by country, the most important thing is to look for patterns to try to understand the directionality or the trends behind the scores. Are they going up? Down? Staying the same? Are some markets improving while others are dropping? This can help you figure out where to focus to improve local customer experience.

Remember, differences in NPS scores are natural and to be expected.

In fact, if you're going into the US market from abroad, you might be interested in knowing that, with the US being such a large market, there is also variance by region, even within this (very large and diverse) country.

For more info, see this NPS analysis across various regions of the United States.

The Value of a Coach

The best gift to give yourself

We're heading into that final stretch of the year when our annual planning for business in the year ahead is mostly ready (if your fiscal year follows the calendar year anyway), when folks do New Year's resolutions, when we look back on the year gone by, and plan for what's around the corner.

Many successful people in all areas of life (sales, sports, entertainment, business) work with a coach. I started working with an executive coach more than a decade ago, when I took my first VP role in a venture-funded, high-growth B2B SaaS company. It was a transformative experience, and I only wish I had started to work with a coach much sooner in my career!

Note: you don't have to be an executive to benefit from a coach. You can hire a career coach, an entrepreneurship coach, a management coach, a sales coach, or any other type of coach.

Coaching became even more helpful to me later, when I began working at a public tech company, HubSpot. I joined right after the IPO, when the company itself was undergoing major transformation. Things changed frequently as we grew. My title changed 3 times and I reported into three different functions in the space of 7+ years. And because my role had direct impact on one of the fastest-growing areas of the business (hello, International!), the pace was often frenetic (but fun).

When you're in a leadership role, there are not many people you can talk with for guidance. Your boss often has limited time, and your peers (who are fewer) have issues of their own to solve. Plus, from your own coworkers, you cannot get a truly unbiased perspective from someone whose job it is to advocate for you and you alone.

For many years now, I've worked with Elana Konstant. She runs Konstant Change Coaching, and was recommended to me enthusiastically by several moms in Director+ roles at tech companies, in this Moms in Tech group I belong to on Facebook. She has helped me navigate so many different aspects of my career, life, and integration between the two.

Elana has been with me as my priorities have evolved in life, as a mom, as an author, and as a woman in various tech leadership roles. I have recommended her many times to other people leaders and aspiring tech execs, especially women, parents, and members of various under-represented groups in tech over the years. I highly recommend finding a coach if you're stuck and feel like you could use a career boost. I always print out her follow-up notes and have them sitting right next to me where I can see them, and re-read them often, until I fully internalize her advice.

The reason I'm sharing Elana's contact info above is that I have been asked a zillion times for recommendations for a coach, and I believe others should have access to the same types of resources. Just remember that the type of coach, and your budget for it, might vary a lot by what you do, what stage you're at in your career, and even where you live.

No matter whom you choose to work with, a coach is a fantastic investment, a resource who can give you a different perspective and a boost in your career. Their guidance and feedback are invaluable to help you grow. If anyone is asking what to get you for a last-minute gift this holiday season, I cannot think of anything more helpful in your career than having a coach to support you.

Or if you're able, give yourself this type of gift as you embark upon a new year in your life>career.

Grace Notes

If you like what you see in this newsletter, here are some finishing touches that might interest you.

Speaking on SaaS in Sweden

I'll be speaking at the SaaSiest 2024 event in April in Sweden, along with an incredible line-up of other global SaaS leaders. Friends, let me know if you'll be there and would like to collaborate or meet up!

Bulk Orders of My New Book

Holding an event for your employees or customers? Need a hook to draw people in and stand out? Books and author discussions can be great for that.

If you're ordering more than one copy of Take Your Company Global, check out Porchlight Books, where you can get a significant discount (up to 43%).

Let’s Collaborate

There are 3 ways we can work together:

1. Advisory. Hire me as an advisor to help your business scale globally.

2. Speaking. Request a conference keynote, an author talk for your team, a training, or a workshop for an upcoming customer or employee event.

3. Sponsorship. I’ll be taking on a limited number of sponsors for this newsletter. If interested, get in touch.

Contact me on [email protected], or visit this link: https://borntobeglobal.com/contact/

That’s all for now, friends!

Until next time,