The Forum recently received a great question via our “Ask the Expert” feature:
“We are a “young” international and domestic relocation management company but our staff has many collective years of experience in the industry. We are having a hard time breaking into the corporate market. It seems that HR Departments do not want to give us the opportunity to present our services. How can a small company like ours work itself into the international employee relocation market within a corporation?”
We can truly empathize with this situation, which is one we’ve often seen. This is especially true in today’s economic environment of slashed budgets and significantly reduced transfer and assignment volume. Overworked and highly stressed company staff are unlikely to spend precious time, now, to hear about services they’re not currently using.
The reader suggested that the “big” global relocation service firms receive a better reception from prospective clients than do the smaller and newly established firms. In our experience, this is basically true. The reader also stated that many of the smaller firms have a stronger service orientation and can be much more responsive and flexible than the big well-established providers. Indeed, we have seen cases of this too. It’s possible to demonstrate that smaller firms made up of seasoned experts, but with lower operating overhead and more flexible processes, can be quite cost competitive while providing high quality services as well.
So why are the small firms having difficulty “breaking in”? What is it that the big firms offer as “competitive advantage”, often successfully, that the small firms do not?
Big firms have a large footprint.
They can point to wholly owned offices and affiliate relationships in a wide array of countries. This can be a huge issue for corporations that want to have local touch points for their employees and direct knowledge of local environments readily available. The small firms often don’t have such a geographic footprint and might not be sure how to establish one.
Big firms have globally experienced staff.
Frequently, their staff come from a variety of countries, have lived and worked in multiple countries and speak a number of languages. They also frequently have individuals with prior international assignment policy development and program management experience on their teams. This engenders great credibility in the eyes of the corporate buyer.
Big firms leverage their extensive experience.
They have managed programs covering multitudes of assignees across a variety of countries and industries. The corporate buyer is far more impressed with stories about “been there, done that” than with honest admissions of “haven’t been there, haven’t done that — yet”. Corporations tend to be risk adverse and shy away from “being the guinea pig on whose dime the new service provider learns the business”.
Big firms have technology.
They offer sophisticated state-of-the-art, web-enabled capabilities for projecting total assignment costs, managing reimbursements, communicating with clients and their transferees, interacting online with data providers, providing country-specific information, and tracking and reporting expenses. Many smaller firms do not have such (expensive) technology and, occasionally, cannot demonstrate expertise in managing the complex requirements of expense management and tracking across multiple countries and pay-points.
Big firms have strong relationships with key service providers.
They know and work with a variety of firms providing assignment cost of living and housing data, international tax experts, destination country employment counsel, cultural and language training firms, etc. These pre-existing working relationships mean single point of contact and seamless service provision that is extremely attractive to corporate clients.
Big firms invest in polished marketing campaigns.
They advertise, host and sponsor conferences, deliver keynote presentations, conduct webinars, host booths at SHRM and ERC conferences, develop highly polished web sites, publish surveys and articles, etc. This does not, of course, make the big firms better at providing services but, at the end of the day, polished marketing does impress prospective clients and creates name recognition.
Big firms have the advantage of name recognition.
Finally, there is the cliché that no procurement professional was ever fired for hiring a well-known “big name” even if there was a service breakdown later. Let’s face it, in many corporations there is a built in bias toward hiring only name firms and avoiding the perceived risk (accurate or not) of hiring unknowns.
So what can a small/new firm do?
Emphasize responsiveness, service orientation and flexibility.
Probably the two most critical attributes in which to excel and compete are outstanding service and price. Responsiveness, flexibility and competence are critical in what, I think we would all agree, is a service industry, after all.
Build internal international expertise.
This should be done via hiring highly experienced, preferably well-known, and globally networked staff and through education such as the SHRM GPHR and ERC GMS programs. Travel and learn from first-hand experience about assignee destinations around the world. External consultants also can be quite helpful in this area.
Invest in technology.
The ability to project and track costs, communicate with management, transferees and other services providers, e.g. the client’s international tax firm, and manage data is critically necessary.
Develop and nurture relationships with complimentary service providers.
This must include in-country providers and data, immigration, tax, language training and cultural training firms, among others.
Create name recognition through a well-focused and professional marketing campaign.
Demonstrate how the firm should be perceived as a trusted advisor and capable service provider. Create a public presence in the industry.
Delight your current clients and enlist them as your champions
When courting new business, make use of recommendations and testimonials from satisfied clients. Ask your clients for leads and to make “warm” introductions. Word-of-mouth recommendations are priceless.
Direct business development efforts towards smaller firms.
They tend not to have the budget for, and less of a bias toward, the big firms. It’s also relatively well known that the big firms don’t give their best attention to small accounts. Go where there IS business AND less competition.
Implement a “Blue Ocean” strategy.
There are many capable providers of global mobility services, large and small. The market, especially in the current economic scene, may actually be over-supplied with providers. Competition is fierce. We would suggest that small firms specifically target prospects whose mobility needs – geographically and transfer types – best match the firm’s geographic footprint and operational strengths. Approach those firms that are not being approached by the multitudes of providers.
Seek out the advice and counsel of those with depth of experience and expertise.
We believe that seeking guidance and mentoring from experts can be quite worthwhile. Professionals with prior “in-house” corporate experience, as buyers of external global mobility services, across a variety of industries are especially valuable.
We again thank the reader who submitted the question. Now we invite our readers to share their views. Please let use know your thoughts via comments on this post.
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10 responses to “How Big Must Your Relocation Provider Really Be?”