Congratulations! You took bold steps and attended a tradeshow in Frankfurt, visited distributors in Rome and sponsored a focus group in Lille. The first shipments have gone out from your U.S. factory and the feedback is positive. Daily inquiries arrive from potential customers and distributors eager to represent you across Europe.
However, there’s a cloud on the horizon. A few products arrive damaged, and perhaps a few were misused. Now, folks who gave excellent feedback in online forums are saying that shipping the product back to the U.S. and waiting for repair is unacceptable.
When it comes to international product servicing, your ability to respond quickly and cost-effectively can be the difference between a successful international launch or costly failure. There are two ways to handle this challenge:
Find a partner
The easiest way to get in-country capacity for service and responsiveness is to contract with a partner; someone to handle repairs, warranties and replacements.
A partner comes with service techs and phone numbers that answer in local languages and time zones, which can be a huge advantage in Europe. They also normally have warehouse space where spares and repair parts can be housed for fast and easy exchanges. You won’t need to deal with multiple entities in different countries with highly variable tax regimes.
But if you’re a small player just entering the market, your volumes may be too low to be a priority for your partner. You might also find it difficult to gain useful market intelligence and feedback on products, usage and defects, as a partner may be reluctant to share what reflects badly on their performance.
Go it alone
If these concerns give you pause, you can set up your own shop where you have control. Quality of technicians, speed of responsiveness and a wealth of data from direct customer interaction can be critical to your growth strategy. You may set up a centralized operation, or discover that small satellite offices suit your products better.
When the service technicians work directly for you, they can also act as sales staff and offer new products and upgrades that a partner may be unwilling to handle.
Of course, with control comes cost and risk. The biggest challenge is hiring the right people and managing long-distance leadership.
U.S. firms often hire a service manager, give him or her a budget and rent an office, and then turn back to domestic issues. It’s hard to make far-flung operations feel like part of the global team. The U.S. leader must make special efforts not to neglect young and growing service markets.
I generally advise starting with a partner when volumes are low and the risk to your brand is minimal.
Having a partner, however, doesn’t mean you don’t need to be diligent. Budget quarterly trips to visit customers and work with your service provider to ensure they’re delivering as per contract and to industry standards. Measure their performance carefully and, if possible, set up a reward system based on strict quantifiable criteria.
David Iwinski Jr. is the managing director of Blue Water Growth, a global business consulting firm with extensive experience and expertise in Asia, Blue Water Growth services include merger and acquisition guidance, private capital solutions, product distribution, production outsourcing and a wide variety of business advisory services for its Western and Asian clients.
