Selling a service export successfully requires even more people power than does product sales. Pricing a service, such as one that is professional, technical, financial, or franchise or insurance oriented, entails a somewhat-different approach because a service requires direct interaction with your customer, not just initially but for the duration of the service contract. And for some services, the quality of your interaction with your customer is exactly what they’re paying for.
Whether pricing a product or a service for export, the fundamentals remain the same: you need to first conduct market research on the competition, the ease of entering a new market, the maturity of the industry, the uniqueness of the offering, and so forth.
But let’s not get ahead of ourselves. Here’s a look at the other factors that are important to consider concerning pricing a service export:
- You need to differentiate your service offering from existing offerings or convince a prospective customer to hire you to do something that’s never been done before.
- Make sure you look at all costs associated with the service offering, including taxes, establishing a foreign branch office, sales visits, translation, IP protection, and so forth.
- Examine and factor in the amount of time that will be spent on the proposal (presales effort) and allocate your schedule accordingly.
- Pay close attention to cultural business practices specific to a country. Will you be pricing your service per hour, on a fixed-project basis, or in some other negotiated format that fits the protocol of the country’s standards?
- Make sure to determine how you will account for after-sales nurturing and follow-up costs.
- You’ll need to comply with applicable international standards. Learn the tax and legal implications for providing your service in an overseas market well in advance of submitting a proposal to a client.
- Make sure you factor in any promotional costs associated with supporting your services in the overseas market.
- Determine what the impact on your domestic business will be in terms of hiring additional staff, whether it be on the ground in the country in which you wish to conduct business or locally to support the new business.
For a more extensive look at other factors that are important to consider concerning pricing a service export, read: Exporting: The Definitive Guide to Selling Abroad Profitably.
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