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This is part 10 in a series of 12 step-by-step guide to help you succeed in today's global export market.

DELIVERING THE SERVICE

Modalities and Contracts

Services can be delivered using any one of four modalities. These are:

    a) Provider visits Client
    b) Client visits provider
    c) Establishment in the Market
    d) Remote Delivery

Your decision as to which of the four to select, or what combination, when entering any market will depend on:

  • your long term aims
  • the business environment in the market
  • your resources
  • the technical and practical feasibility of each modality for your service
  • cost-effectiveness
  • receptiveness of your client to use new technology in the delivery of your services
  • your views and the views of your client, if already identified, as to the most mutually beneficial approach to select

Which ever modality you use, you and your clients will want to ensure that all parties have a clear record of decisions and responsibilities. The record may vary from a one page document to a formal contract, but its main purpose is to ensure that each party understands the terms and conditions of the business deal. Should disputes arise, the record is an invaluable tool for working out any differences.

In some cultures, contracts are viewed as the formal statement of work to be done and standards to be met, payment to be made, schedules and legal framework to be followed. In some other cultures, contracts are seen as evidence of an intention to advance formally towards a working relationship. Your client’s understanding of the role of the contract is often more important than its contents.


Modalities

Provider Visits Client

This is the service delivery modality that is most easily recognized as an export activity.

a) Examples

The design of ski resorts.

You will probably need to meet the client repeatedly, often at the site. New technologies may enable you to combine site visits with the "Remote Delivery" modality, such as by using computer assisted design. This could reduce your costs and increase the speed of delivery. The acceptability of these types of approaches of delivering your service will depend on your ability and the client's ability and willingness to use available technologies. It is almost inevitable that initial discussions and periodic negotiations must take place in person.


Ecological surveys, environmental assessments, spill site remediation, architectural restorations.

Traditionally, you have provided such services by working at your client's site. Today, you often combine this "Provider Visits Client" modality with the "Remote Delivery" modality. You may wish to consider working with local colleagues to ensure sensitivity to the technical and cultural expectations of the client, to reduce travel costs and to be able to offer a more competitive fee schedule.


b) Advantages of Visiting Your Client

  • you establish credibility and relationship
  • you get to know the client personally
  • opportunities to meet local staff, consultants and/or potential partners
  • opportunity to ensure that client understands and fully accepts non-traditional advice or delivery options and choice of personnel assigned to the task
  • chance to identify other potential clients in the same market


c) Disadvantages of Visiting Your Client

  • your travel time is usually unbillable and can also be lost-opportunity time
  • high cost of travel
  • on occasion, it may be considered to undermine authority of personnel (particularly local staff) on site


d) Combining On Site Delivery with other Modalities

In many situations, you can combine your own on-site visits with other modalities to achieve maximum effectiveness:

  • You can cooperate with a local colleague to provide services at your client’s site. Working with local experts can enhance your marketing effectiveness by giving you a local image as well as local visibility, can increase your probability of applying appropriate local knowledge, particularly in the investigative and analytical stages of your work, and can ensure your prompt response to any changes in the environment in which you are delivering your services. To benefit fully from these advantages, you and your local colleague must work closely to ensure that your aims and operating philosophy are compatible.

  • You can acquire and deliver information electronically, saving costs and time. It is important to ensure in advance that your client is comfortable with this methodology.

  • You may work with a sister or subsidiary organization in the market to provide either technical or administrative support.

  • You may wish to bring your client to your facility to showcase your organization and possibly for training.


e) Making the Most of your Visit to your Client

Prepare very thoroughly before leaving your country by:

  • ensuring that your passport is valid, with at least a few spare weeks after your scheduled return date
  • having the required visas (check the requirements two months before your scheduled visit)
  • having the necessary vaccinations
  • having a clear letter of invitation from your client
  • obtaining written confirmation that all the client’s personnel, local staff or consultants with whom you will need to work will be available during your visit
  • providing a complete and detailed list of any equipment or support you will need on site and receiving written confirmation that it will be available
  • carrying appropriate equipment and accessories (plug adaptors, converters, computer disks, film, etc.) for each situation in which you will be working
  • following the business travel and general travel advice available from the Department of Foreign Affairs and International Trade
  • forwarding an agenda for your visit and receiving confirmation from your client of its acceptability
  • taking time to learn about the country, business and cultural customs, and your client


Client visits Provider

The classic example, and a very important income earner is tourism. Every year thousands of people earn good income by meeting the needs of visitors who pay for services with earnings generated in countries around the world.

a) Examples

The Foreign Student.

Schools, colleges, universities and businesses educate and train students at many levels and in many branches of education. The fees earned are an important source of revenue in many educational institutions and, in the business environment, the training can be an integral part of an overall transaction. Foreign alumni of educational institutions provide linkages between host country and their home countries that can open doors for numerous international trade opportunities.


The Foreign Patient

Health care facilities benefit from providing services to patients from foreign countries. Fees paid by foreign patients can make a major contribution to income in general and to the procurement of the most up to date equipment and to overhead.


b) Advantages of your Client Visiting You

  • You can provide your top level service with access to all the facilities you could make available to a domestic client
  • You have your client’s undivided attention.
  • You can continue to serve your domestic clients.
  • Your travel costs are limited to promotional and sales trips.
  • You have the opportunity to showcase the full range of your services.
  • Your client is likely, when in your environment, to follow the terms of the contract.
  • Providing training at your site to representatives of your foreign client provides the opportunity to showcase the full range of your technologies and services.
  • You have the opportunity to identify differences in business culture exhibited or remarked on by your client, and to ensure that you adapt to these in the training you provide, and in your visits to your client.


c) Disadvantages of Client Visiting You

  • You may have less chance to identify additional business opportunities with the same client or with others in the same market.
  • You have no opportunity to ensure that the worth of your services is recognized throughout the client’s organization.
  • It is more difficult to determine if the services you are providing are totally appropriate for the client’s everyday environment.


d) Combining your Client’s Visit to you with other Modalities

When all, or a portion of the service delivery involves your client visiting you, you may also be able to:

  • cooperate with an in-market colleague to provide follow-up after providing services at your location.
  • maintain long-term contact through electronic communications, building on the relationship established while your client is at your site.
  • take advantage of having your client at your location. It can be an excellent opportunity to lay the foundation for having your client help you to expand in the target market, either through referrals, or through eventual establishment in the market.


e) Making the most of your Client’s Visit to you

Prepare very thoroughly several months before your client comes to your country by:

  • reminding your client about the need for a valid passport, visa, vaccinations, etc.
  • providing a clear summary of the services to be provided
  • stating what costs will be borne by you and those that are the responsibility of the client. (In some situations you may wish to require the client to make a partial or complete payment in advance, specially for any out-of-pocket costs that might revert to you such as travel and accommodation.)
  • providing a package of information about your country, your region, your city, if it is your client’s first visit
  • providing detailed information about climate and clothing requirements, particularly during winter
  • obtaining written confirmation of the availability of any outside resources required for the provision of the contracted services
  • providing a complete and detailed list of any equipment or information your client is to bring
  • identifying bilateral chambers of commerce, churches, etc. where your client may be able to relax with compatriots - particularly in the case of an extended visit


Establishment in the Market

In general this modality is more likely to be used by large firms, but it is important to any firm that wishes to become a major player in any market.


a) Examples

Highly visible examples are your local banks that have established a presence in numerous foreign markets. Legal firms, accountants, insurance companies, engineering and construction companies and major management consulting firms are other examples.


b) Advantages of Establishing in your Target Market

In most situations, once established, you will be able to provide your services on an equal basis with all other providers in the market.

  • Your clients generally see establishment as a strong commitment to the market.
  • Your travel costs are reduced.
  • You have the ability to showcase the full range of your services.
  • You have the opportunity to further identify differences in business culture, and to ensure that you adapt the services you provide.


c) Disadvantages of Establishing in your Target Market

  • high cost
  • given the variety of business environments around the world, you may encounter bureaucratic difficulties and delays in establishing your business as well as costs that would not be encountered in your country


d) Combining Establishment in the Market with other Modalities

Even when established in your target market, you may want to:

  • provide some aspects of your services through electronic communications
  • bring your client to your location for training, to demonstrate your line of service offerings and to meet existing clients
  • have specialists visit your clients in the market


e) Making the most of Establishment in the Market

  • Once established in a target market, you have opportunities to:
  • investigate the potential for additional business and meet new clients
  • develop new service offerings, tailored specifically for that market
  • obtain referrals and recommendations from clients to others in that market, or neighbouring markets
  • investigate opportunities in neighbouring markets


Remote Delivery

The potential and the actual utilization of this modality has expanded dramatically with the availability of modern communications technology.


a) Examples

  • The provision of telemarketing services by a local company for a major US corporation
  • development of web sites by local companies for clients around the world
  • medical diagnosis and treatment support from a local teaching hospital to doctors in remote locations
  • delivery of course materials and student support regardless of location and international boundaries
  • delivery of meteorological information, cable television services, investment services
  • travel reservations
  • automated road and traffic condition reports
  • over-the-phone or Internet horoscopes
  • radio and television entertainment
  • 24 hours/day work on major projects (e.g. shift 1 in Canada, shift 2 in Singapore, shift 3 in theUK)


b) Advantages of Remote Delivery

  • delivery costs are minimized
  • clients are completely unaffected by distance and time differences
  • you can provide your top level service with access to all the facilities you could make available to a domestic client
  • you can continue to serve your domestic clients
  • your travel costs are limited to promotional and sales trips
  • you have the opportunity to showcase the full range of your services


c) Disadvantages of Remote Delivery

  • You have little opportunity, through the delivery mechanism, to identify additional market opportunities with the same client or with others in the same market, but can continue to do so during promotional and sales visits.
  • You have no chance to ensure that the worth of your services is recognized throughout the client’s organization.
  • You have less opportunity to ensure that the services you are providing are totally appropriate for the client’s everyday environment.
  • You must offer services at the hours suitable to your client.


d) Combining Remote Delivery with other Modalities

When services are delivered remotely, it is particularly important to maintain contact with your client whether through visits or through personal communications. These contacts should focus mostly on ensuring that the client is completely satisfied on a day to day basis with the services being delivered, with little or no promotional and sales work included.

In most cases, routine remote delivery of services will occur within the context of:

  • a reliable communications infrastructure
  • highly trained professionals at your location, and at the client’s location
  • a formal contractual, or a long-term working relationship between a business or professional provider and a business or professional client, even though the end user may well be an individual at the consumer/retail level.


e) Making the most of your Remote Delivery of Services

By the efficient and cost-effective provision of services, remotely to your clients, you can:

  • obtain referrals, references, recommendations and gain new business
  • you may be able to make round-the-clock use of your equipment and facilities
  • respond and adapt immediately to client input without having to travel to the client’s site


Selecting Your Modalities

There is no "best modality" for any one market. For each opportunity, you need to look carefully at the advantages and disadvantages of each modality, to consider how a variety of modalities can be applied to the components of your export work, and to discuss the options with your clients. You should also discuss your intentions, concerning service delivery, with the local post and with other local companies that have exported services successfully to the same market.


Contracts


Contract Framework

Service delivery contracts can range form a handshake to dozens of pages of legal and technical specifications. In every case it is essential for the two sides to have the same understanding of:

  • the services to be provided
  • any preconditions to the provision of the services such as availability of client’s personnel, information, facilities, mobilization payments, weather conditions
  • the personnel to provide the services
  • personnel or facilities to be made available by the client
  • date on which provision of service is to commence (and end)
  • payments to be made
  • benchmarks, or dates on which payments are to be made
  • circumstances in which the contract may be terminated, and implications in terms of completion of work, handover of work to date, partial payments, penalties, etc.
  • how "completion" of tasks will be determined
  • conditions for hold-back of payments
  • conditions for return of bid or performance bonds
  • procedure in case client is unable to make available personnel, information, facilities as agreed


Contract Benefits

  • the process of drafting a contract is an excellent method for you to ensure that you have a full understanding of your client’s expectations and that your client’s understanding of your capabilities is realistic
  • a contract is often considered to be a binding agreement according to which the parties will work together
  • a contract will help to work out any disagreements and will assist in ensuring partial or full compensation
  • having a contract and hiring an independent translator to translate its contents back to the original language helps to identify any misunderstandings


Contract Characteristics

While you would prefer the contract to be signed under local law, the jurisdiction is not as important as the attitudes of the signing parties, and their ability to perform as specified. It will be important to have lawyers on both sides check that the contract is legal, however it is equally important for you and your client to retain control, so that the contract:

  • will be realistic
  • will ensure that you deliver the services required by your client
  • will ensure that you are paid as agreed
  • will emphasize that the work is to be carried out to the mutual benefit of you and your client
  • Access to importers worldwide and RFQ
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  • Explore new business opportunities and much more...
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  • Promote and market your services
  • Receive direct quote requests
  • Back office support, set up regional offices and much more...
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