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4 Differences Between American and European Business Culture

4 Differences Between American and European Business Culture

America’s impact on the rest of the world is staggering and its products are unavoidable. From Hollywood movies to music to food, most people from outside the US are far more familiar with America and its social landscape than America is with theirs.

So for US entrepreneurs who want to expand their business to Europe, how can they play catch-up in understanding European business culture?

The cultures in countries such as the UK and Ireland are close to the US due to the language but each European nation has its own distinct business culture which can vary drastically from one another. By understanding the differences between American and European business culture, you can avoid simple misunderstandings that could scupper your best-laid plans to develop your business in Europe.

 

Marketing is generally more modest

Americans have become acclimated to marketing tactics that other countries would consider invasive. Sports broadcasting is a great example: every stoppage has its own ad break, and every statistic is sponsored. But in European sports like soccer, commercials are limited to the half-time break, and the surrounding 90 minutes of action is unimpeded (with a few on-field exceptions). Similarly, many countries in Europe don’t allow prescription medication to be advertised at all.

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In short, the marketing culture in Europe has some significant differences to the US. There are some constants: people generally like to know that a company has ties to the local area, and that its products and services are ethical. But there’s also plenty of room to play on the prestige of a foreign product, particularly if its country of origin is famous for a certain specialism, such as French food or German engineering.

That doesn’t mean that your marketing has to be more subtle. European commercials can be as weird as they come, and decidedly ‘edgier’ than the FCC would permit (although not, as many people would have you believe, full of nudity). But the means of delivery is often different, with a softer tone and more abstract approach. Branding is often simpler and cleaner rather than the bold and busy packaging you see on many American products.

Aspirational advertising is also very different. With more of an acceptance of class divides in Europe, wealth and success are not beloved or fetishized in quite the same way. Marketing that might be seen as aspirational in America could be seen as cloying, disingenuous or distasteful in Europe. The safest approach is to be humble, unpretentious and forthright, and let your product do the talking.

Relationships take time

The openness of American businesses to collaboration can be seen as both a positive and a negative. While it’s easy to strike up new relationships in the US, the ties between businesses tend to be looser, and never get in the way of pragmatic decision-making. In Europe, by contrast, relationships between businesses often last for years or even decades. Forging any sort of bond can require a high level of trust and once formed, they are much harder to break.

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While this approach has its advantages, it can make life harder for startups who often struggle to compete with older firms for trust and experience. However, this is beginning to change with the onset of new technologies and the realisation that large businesses require the expertise of smaller specialists. In this sense, Germany has always been somewhat ahead of the curve, where strong ties connect family businesses both with each other and with large corporations.

Breaking into these cliques as an American can be tough, and you may feel discouraged. Ultimately though, business is still business, and people will work with you if it’s to their advantage. The only difference is that you may need to set up a local company or affiliate instead of a branch, and hire all your staff locally to ingratiate yourself. Aim to approach every meeting with the utmost courtesy and respect, and take nothing for granted. It may take time, but by proving your strengths and staying humble, those connections will come to you.

Mind the language barrier (even in the UK & Ireland)

American businesses are lucky that English is the business world’s common language, making it easier for you to grow and expand. However, this doesn’t mean that you don’t need to adapt your language depending on where you’re headed - or to adopt the local language if you intend to get further than the front door. The correct use of language is vital for a good first impression - and this is as true in the UK and Ireland as it is in Spain or France.

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If you’re starting up in the UK, remember that American English differs from British English. Spellings will be the most straightforward giveaway: words ending ‘ize’ in American English will usually end ‘ise’, for example, while many words contain extra letters, such as ‘colour’ or ‘paediatric’. Some common words also differ between the two languages, such as trunk, elevator and attic.

Cultural exposure will normally mean that people understand these words, but people will feel more warmly towards your business if you make the effort to adapt. This can go the other way, too, as you may be unfamiliar with the wide range of slang words and phrases employed in the UK. Don’t look too aghast if someone asks to pop out of your meeting for ‘a quick fag’, for instance - they’re just going for a smoking break!

In other countries, it’s phrasing and translation that you’ll need to watch out for. Words, phrases and even concepts may have very different meanings when exported to other countries, such as colors or imagery which hold special significance. You wouldn’t want your branding to invoke imagery of fear or illness, for example, or provide a ‘free gift’ to your German visitors, where the word gift means poison! Investing in proper translation will help, but the best bet is to hire locally. Good advice from within the business will save you money, and stop those problems at source.

Shared values, different cultures

While businesses may not be as open to new relationships, customers are open to new ideas. European consumers tend to be somewhat less conservative in their outlook than in America, and so businesses are often more willing to take risks on products. European consumers have been among the fastest adopters of online shopping, collection services, mobile payments and online banking. This is particularly true of the UK where innovation is the order of the day.

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With extremely dense and closely packed countries, much of this innovation has resulted from logistics; Amazon for instance have chosen the UK to develop their Amazon Air deliveries, and packages can be shipped across the continent in a single day. Other developments have been helped by the synchronicity of data laws across the European Union, and other frameworks that make cross-border transactions easier.

Of course, not every country is the same, and the rate (and type) of progress can differ between neighboring countries. Some are almost entirely cashless, while others still rely heavily on cash. This can even permeate to the city level, such as in Germany, where some cities widely accept debit and credit cards, while others are cash-only. Similarly, some countries such as in Scandinavia have extremely high-speed internet while others such as France are lacking.

The way you can offset this is by picking and choosing which markets you want to go after. Setting up in Europe gives you access to a whole host of different countries, who may receive products and ideas in different ways. A central location will allow you to test your messaging in different markets, testing campaigns and selling small quantities across borders. By undertaking these small experiments, you can hone your marketing to appeal more successfully to different cultures, something that’s harder to do with a national campaign in the US.

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Expanding your business to Europe shouldn’t be a scary process, but it’s one you should approach with an open mind and a willingness to learn. While most of your knowledge and acumen will carry over, it’s inevitable that some things will surprise you, and that certain changes will have to be made to best appeal to the many distinct nations and subcultures. By following this broad advice, you’ll give yourself the best platform to achieve this, and avoid the most common pitfalls that affect American businesses.

We can help you with everything to do with setting up your European business from accounting to serviced officesbank accounts to registered addressestax planning to VAT services. You can call our team on 0033 (0) 1 53 57 49 10 or email us via our contact page with any queries you may have.

 

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