Exporting Your Services

Preparing to Export

Why do I need an export strategy?
What are the typical steps in developing an export strategy for services?
What are the four stages of export preparation for service firms?
What domestic market development strategies will also work abroad?
How can I obtain export-related experience?
How can I contact service firms who have successfully exported before?
Why is there relatively little emphasis on market research in the network
exporting™ model?

The following seven questions and answers provide tips on what steps you can take in order to get ready to export, including the types of market research to undertake:

Why do I need an export strategy?

An export strategy allows you to:

Coordinate the efforts of all staff to focus on the same priorities.
Manage the expectations of senior management regarding how long it will take to become profitable and what resources will be needed.
Monitor your progress towards your export objectives and make adjustments in your strategy as needed.

What are the typical steps in developing an export strategy for services?

Because potential international customers depend on recommendations and referrals, you are likely to be most successful in markets where you have strong contacts. Also, since you need to move quickly to take advantage of new market opportunities, you will need to keep modifying your strategy as conditions change and your network expands. Here are the typical steps needed when you initially develop your export strategy:

Define your export objectives and gain top management support.

Define your firm’s export-related strengths that you wish to leverage.

Identify three to five potential markets with customers that have needs similar to those your firm has already addressed successfully.

Identify contacts that your firm has in (or into) each of the potential markets (including satisfied customers, business colleagues, mentors, old school mates, relatives, friends).

Rank the potential markets based on the quality of contacts you have into each market.

Verify, through market research, that your top-ranked market is a viable market for your firm.

Work with your contacts to build credibility for your firm in your potential export market and/or with target customers.

Travel to the market (if necessary) to build profile and meet potential partners and potential customers.

Review the regulatory regime and trade liberalization commitments in your potential export market, and resolve any market entry issues and risks.

Allocate the resources needed to develop the priority export market.

What are the four stages of export preparation for service firms?

The network exporting™ model assumes that you will use your network of contacts for initial export market selection in order to short list three potential export markets. Next comes four stages of export preparation:

Things you can do online
Your online search will include basic market information on the markets you have short listed, events where you can build credibility and make contacts, potential competitors in each market, potential partners in each market, and the cultural factors to take into account. By the end of this stage, you should be in a position to make a final market selection. When you are searching online, make sure that you cover not only websites on the country but also websites or portals specific to your service industry.

Things you can do with your network
Once you know which export market you are focusing on, you will want to spend time with your network of contacts. This includes people here in Canada that have connections into that market – for example, expatriates who have relatives or business connections in that market, foreign students or trainees from that market, your banker or accountant or lawyer, other firms that have done business in that market – as well as people you know abroad and Canadian trade officers. You’ll want to learn from your network the best ways to build credibility in your target market – where could you give presentations, should you try to get media coverage, what about getting an article published or joining a local association. Where possible, you will want to get letters (or e-mails) of introduction to key persons in your target market. You can also learn from your network about who might be a good local partner or what projects are being funded where your firm could be a subcontractor. Remember also to ask about what not to do – that can sometimes be even more helpful that what opportunities exist!

Things you can do at your desk
You know which market you are targeting and a bit about the competitive and cultural environment. You’ve learned about some ways to enter the market. Now you need to make sure that you are prepared and will make a good first impression. You’ll want to find out specifically what will be required – visa requirements, licensing requirements, specific events to attend, etc. This may take you back online for further research. Another thing to consider is whether your firm is export ready. Can you handle the capacity if you succeed? You can use the Export Readiness Diagnostic both to assess your current competitiveness and to gives you suggestions as in how to improve your competitiveness. You can also use the tool to test which market type your firm is best suited to. Most importantly, at this “desk” stage, you need to review your promotional materials – especially your business card. For service exporters, your business card is the single most important representation of your public image and serves as a important “leave behind.” It is really important to have business cards with you at all times and give them out. That is the only way you can be sure that someone will be able to remember you. And you never know when someone might be able to refer business to you.

Things you need to do in person by traveling to the export market
Notice that at least three-quarters of export preparation does not involve leaving your office. In fact, for some services that can be delivered online, you don’t need to travel abroad at all. The most important reasons for traveling at this stage are either to attend an international conference where you can network or to travel to your target market in order to give a presentation or attend a local association event to find local partners.

What domestic market development strategies will also work abroad?

Often your most successful domestic market development strategies also work well in export markets. The first question to ask yourself is, “How do we get business now?” Then check with a “cultural coach” (i.e., someone who knows your target market well) to see if the same strategies would work there. Here are some strategies that are often “portable” from one market to another:

Building your profile through speaking at conferences/industry events
Participating in your service industry association to build profile and contacts
Active networking at industry events
Soliciting references from satisfied customers
Writing articles for local trade press

How can I obtain export-related experience?

There are a number of ways to get low-cost export-related experience such as:

Expanding your service delivery to other regions of Canada to gain practice in managing dispersed service delivery sites and/or delivering services to other ethnic or cultural groups.

Acting as a subcontractor to experienced Canadian service exporters.

Participating in CIDA-funded projects from Canada to developing or transitional economies.

Providing services to foreign firms or inter-governmental organizations (such as United Nations agencies) in Canada, while technically export activity, helps you increase your export capabilities without leaving the country.

How can I contact service firms who have successfully exported before?

You probably already know other firms who are successful exporters if you examine your own network of contacts. If not, here are some routes through which to make contact:

Industry and trade associations to which you belong
Officials in the international trade department of your bank
Canadian Trade Commissioners
International trade lawyers
Your accountant
Your customers

Why is there relatively little emphasis on market research in the network exporting™ model?

Market research is certainly useful and important; however, it is also costly and time consuming. Remember that customers select new service providers based on trusting that they can deliver; therefore, your network of advocates and references is more important than data on demand in a foreign market. There is little point in researching markets where theoretically there is demand for your services but where no one knows your firm and will not take a chance on you as an unknown service provider.