Brazilian Digital Marketing Pioneer RD Targets Global Expansion

Brazil’s B2B software firm Resultados Digitais (RD) is progressing with an international expansion plan focused on offering accessible marketing automation options to small and medium businesses (SMBs) globally.

RD started in 2011 and has since built a client portfolio of 12,000 companies with a partner network of about 1,500 agencies in Brazil and other emerging markets where it is present, such as Mexico and Colombia. It is now aiming to expand further into Latin America and enter Europe, starting with Spain and Portugal.

The main selling point is that the company’s tools are simpler to use and cheaper, with average monthly fees being half of the prices practiced by the competition.

This has attracted the attention of international investors, including TPG through its Growth fund, Redpoint eventures and Endeavor, who have backed the firm with funding rounds totaling 80 million reais ($21 million) so far.

The anti-playbook approach

RD was founded by Eric Santos out of a personal need for digital marketing tools in his previous business and frustration deriving from the amount of technical development needed to make it all work.

“I was looking to solve my own pain and at the same time, I could see marketing automation companies in the US were growing fast but were not catering to Brazilian customers,” Santos says.

“As a less mature market with a strong service culture and price sensitivity, Brazil offered a massive opportunity in the SMB segment – but that would only be unlocked with a massive education exercise,” he adds.

Santos started RD at a time when digital automation was virtually unheard of in Brazil and invested a great deal if resources in developing content and several events to create a digital marketing culture. Today the company employs 680 staff, many of whom were trained from scratch to work in roles such as onboarding and customer success that were, until recently, inexistent.

But the idea raised a few eyebrows at the start: “I spoke to many investors and industry contacts when we started and everyone said we were crazy, because we were trying to create an industry – which is difficult by itself – but also focus on SMEs,” Santos recalls.

A “contrarian” international plan

Adoption of marketing automation tools and innovations is led by the United States, followed by other English-speaking markets such as the UK, Canada and Australia. Other developed markets such as France and Japan follow, while markets such as Brazil are considered as laggards.

According to Santos, when market leaders talk about international expansion, this is also the most typical route – more mature markets are the priority while emerging markets are rarely considered.

“Most companies focus their growth strategies on the US or other developed markets. We are a bit contrarian – and I won’t say it’s the best strategy, but we go against the usual theory that you should first attack the markets that are ready then adopt a reactive strategy for the others,” Santos points out.

“Companies expanding internationally also tend to shoehorn clients into their model, by forcing them to pay with international credit cards, offering contracts and customer service in English only – they basically say you have to deal with all that. This is the way most companies behave, especially American, when they enter a market like Brazil,” he adds.

“We are a mature technology company and can deal with that – in fact, we do business with companies like Salesforce on that basis – but most medium and small companies in Brazil think in a completely different way.”

Rejecting the low-hanging fruit

“Embracing complexity” is one of Santos’ mottos and in the international expansion context this means offering the firm’s marketing automation platform RD Station in Portuguese and Spanish, as well as contracts and documentation in the local language, as well as having local staff to assist customers.

The company has also launched an English-language platform as a means to offer a more accessible option to SMBs in other markets outside the main expansion route of South America and Southern Europe.

Having a product in English also works as a tool to determine the viability of new markets. According to Santos, possibilities could include Indonesia, given its large number of SMBs, as well as developed markets where there is demand for cheaper options.

Focusing on local needs and doing intense education work about marketing automation locally helps RD unlock market opportunities, the founder says.

“We certainly have more work , but also realize that this is not just about picking the low hanging fruit, but sowing seeds that will turn into trees people can’t even imagine that will be here in five years’ time,” he adds.

“Our culture of client proximity is one of our main advantages. Latin Americans in general have an expectation of encouragement and help, soo that’s in our DNA and I believe that sets us apart as we expand.”

Focusing on the core business

Despite its international expansion ambitions, Santos wants to keep focusing on the company’s core business, which is Brazil. The founder estimates that about 1.6 million local businesses could be using the company’s solutions.

“There is a lot of scope for growth in Brazil, but the fact that we have a huge internal opportunity but that doesn’t mean we will give up on the dream of growing internationally,” Santos says.

Santos also points out that RD’s global expansion also raises the bar for the team in Brazil, while building the company’s muscle to develop better offerings in its home market. This also helps in terms of attracting further interest from future backers.

“As we get more investment capability, we can grow the product and team development capabilities and all that contributes a lot to the core business. A lot of what we are doing in terms of international expansion will reflect on our internal growth,” says Santos.

The journey may be long, with a great deal of effort and resources channeled towards the development of new markets. But, according to Santos, that’s all part of the game:

“Investors are interested to see returns, as do founders and other stakeholders. But we know that the business can be considerably larger in the long run, so it doesn’t make sense to make decisions that could damage the business just to get quick results,” he says.

“We will continue to invest and chase more capital – but always with a view of building the long-term strategy, as we have only just begun.”


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