Service Exports Aspects of Trade Promotion
Services can be crucial in stimulating goods exports and are critical in maintaining those transactions. Many U.S. merchandise exports would not take place if they were not supported by such service activities as banking, insurance, and transportation. The many obvious differences between services and products include differences in tangibility and customer involvement. Because services are intangible, you may find that communicating a service offer is more difficult than communicating a product offer.Also, services frequently must be tailored to the specific needs of the client. Such adaptation often necessitates the client’s direct participation and cooperation. Involving the client, in turn, calls for interpersonal skills and cultural sensitivity on the part of the service provider.
| Service exports such as banking,insurance,and transportation are essential for many exports. |
The intangibility of services makes financing somewhat more difficult—given that no form of collateral is involved—and financial institutions may be less willing to provide financial support to your company. However, many public and private institutions will provide financial assistance to creditworthy service exporters. Trade organizations offer two important finance services under various terms and conditions. One is a guarantee program that requires the participation of an approved lender; the other program provides loans or grants to the exporter or a foreign government. Exporters who insure their accounts receivable against commercial credit and political risk loss are usually able to secure financing from commercial banks and other institutions at lower rates and on a more liberal basis than would otherwise be the case.