- Strategic importance of the financial sustainability
- Cross selling, smart packaging, advertisement programs and premium memberships as financial models
- Collaboration with financial institutions offers new opportunities
- Mapping and requirements of international donor agencies
“Why is your portal down? …Because the project ended…..”
Far too often we see Trade Intelligence Portals dying off a year or two after they are launched. Basically as a result of poor planning and inadequate commitment towards sustaining the financial resources required to keep it going. Mostly, the failure lies in the fact that the Trade Intelligence Portal is considered a stand-alone project. This is even stronger when the build or re-vamp of a Trade Intelligence viPortal is an externally financed project.
Ultimately, however, as discussed in Step 2, a Trade Intelligence Portal has to be a strategic priority for the organization. If it does not have a full backing of this kind, the first area that will suffer is the allocation of resources to it. This is not to say that a Trade Intelligence Portal should always be a financial burden. On the contrary, it can save costs and even become an income generator for the organisation.
This step looks into the topic of sustaining your Trade Intelligence Portal with particular attention to maintaining the financial means so as not to threaten the continued existence, effective operation and continuous improvement of the portal. Sources of finance or revenue need to be secured or at least carefully planned at an early stage.
At the outset it is important to clarify that TPO’s vary significantly across the world with respect to their budgets for developing and operating a Trade Intelligence Portal. Some have comfortable budgets for Trade Intelligence Portals, others need to compensate fully or partially through external means. There are various financial models for consideration this step takes a deeper look at these, highlighting best practices.
It seems like a logical approach to establish financial sustainability by selling information. However, apart from a few trade promotion organisations that are either set-up as business news agencies (i.e. this is their core area of business – like IBCE in Bolivia) or that have really tried and tested their markets well in what type of information product sells and have honed in to the preferences of their clients (like the Ceylon Chamber of Commerce in Sri Lanka) other trade support organisations in developing countries frequently struggle to generate enough income through selling information.
A frequently sited challenge is the perception of users that information should be provided for free by institutions particularly if they are public. Changing the mentality to one with an understanding that paying a price for something implies that it has quality takes quite some time to develop.
Much of the challenge has to do with the extent to which the selling of information products is professionalized and also how it is positioned in relation to other means of generating income for the organisation.
Below are some tips on how to professionalize the information for sale and strengthen the value addition:
- Careful design and choice of information products based on proper assessment of the needs in terms of type of information sought and mode of delivery
- A professional look to the information product and consistency in size, content, frequency and quality of sources (see step 3 and 7 on content quality and quality management)
- Achieving adequate scale – i.e. having a large enough, experienced enough team and a large enough portfolio of information products on offer to justify the size of the team
- Time topics to fall in line with specific events e.g. trade missions, seminars, exhibitions
- Offer part of the information for free to get maximum exposure
- Make use of social media and other alerting functionalities to draw users to the information giving particular emphasis to attractive benefits that the information products will offer
- Offer premium information packages as part of a membership program (see below under premium service)
- Consider offering information as a means to trigger interest in other paid services (see below under cross selling)
Premium membership services
A new model has caught momentum among publishers, to sell premium memberships, instead of subscriptions. Among these publishers are for example, The New York Times. It is increasingly pitching memberships as a way for readers to get their hands on exclusive content and experiences.
|Annual Price||Unlimited Access||Online Perks||Access to Reporters||Access to Exclusive Content||Swag?|
|The New York Times||Free||10 articles per month||No||No||No||No|
|The New York Times Premier||$585||Yes||Two free Times e-books a month||Behind-the-scenes accounts from Times reporters||Exclusive access to Times Talks videos||No|
A premium membership is a model that can also work well with business support organisations to generate revenue for information services. Different levels of membership, e.g. silver, gold, platinum, give different privileges for accessing or receiving information. The higher the level of membership, the higher the fee, and the more exclusive the content or service level.
High levels can for example entitle to:
- a customized intelligence report
- early bird access (1 week or 1 month before others can access the information)
- frequent updates through alerts
Such premium membership models does not have to be exclusively for trade information. This can also be combined with for example other value added promotion services.
- Online showroom
- Preferred listings in exporter directory
- Advertisement space on the portal or in the newsletter (see also below).
Philexport Cebu and IBCE
Selling of information often goes better in combination with selling of other services. One of the best options is to provide the information for free and charge for the related service, or to package the information with a value added support service. The information can also serve as a filter such that services are offered to the most appropriate client. For example certain services can be tailored to certain categories of clients like beginning exporters or exporters from specific sectors. If information is also categorized accordingly, the tailored service can be offered to users channelled to this category due to their interest in information tailored to them. This concept is often referred to cross-selling of services.
In fact trade information provision and trade support services should not be seen as separate entities. If the Trade Intelligence Portal is not simply an information outlet but an integral part of the organisation and a tool for dissemination and promoting all services, which it should, then the information and non-information services should be well connected and integrated.
Examples of commercial services with a trade information component can be the following:
|Commercial service||Trade information component|
|Customized market research||Market intel/Market profiles/Buyer profiles|
|Product/Market Matchmaking||Product trends/Market trends/ Buyer profiles|
|Product Design Support||Product trends/Market trends/Design trends|
|Quality management consulting||Market access requirement overviews|
|Trade show participation||Trade show directories/Market trends/Buyer directories|
|Issuance of Certificates/documentation||Trade facilitation information|
|Training in trade related issues||All of the above|
Lima Chamber of Commerce – Information supports the commercial services
The Lima Chamber of Commerce is a good example of a business support organisation that has a thriving commercial service for the business community, which is supported by business and trade information. The service portfolio includes training through its own training center, customized research and export coaching services to prepare and support companies for export. Substantial revenue is generated through these services. Information has a supporting function.
Provided you are able to drive enough traffic to your Trade Intelligence Portal (see step 5 on Social Media and step 9 on Promotion), selling advertising space on your Trade Intelligence Portal is a natural bi-product. It is nevertheless sensible to draw up a plan early on including some of the below important considerations:
- Make sure you figure out before your Trade Intelligence Portal (re-)build which space slots you will allocate to advertising, whether you plan to use the same space for multiple ads and if premium locations (e.g. home page, sector specific) are possible. Squeezing in some slots at a later date will usually prove very challenging.
- Consider ads in your email newsletters or alerts.
- Think carefully about who you would be targeting to sell the slot too. If most of your Trade Intelligence Portal visitors are exporters (depending on your strategy – see step 2), you would be looking to target mainly companies that service exporters like banks, insurance companies, freight forwarding companies. Sometimes certain non-profit organisations may also be seeking exposure with your main client group, for example an institution or project that offers incentives to SME-exporters. Another example could be a programme that is promoting a social cause like encouraging SME exporters to adopt corporate social responsibility practices.
- Ensure that your analytics (see step 6 – Monitoring and Evaluation) are in order such that you can substantiate visitor numbers and more detailed figures on categories of users to prospective advert space customers.
- Also consider sponsorship of your Trade Intelligence Portal. This differs from seeking advertisers in that it offers exclusivity to one or two sponsors for the entire Trade Intelligence Portal and/or email newsletter. The motivation for sponsorship may also be different in that it may have more of philanthropic nature – i.e. having the purpose of communicating a message of wanting to support the business community at large.
IBCE – Selling advertisement cross media
An example is the IBCEm@il newsletter- dedicated to events – with banner ads in the sidebar.
An example of a daily business news service by IBCE is the so-called Data Tr@de, with banner ads in between the news headlines.
Collaborating with Banks
A new phenomenon is arsing in various continents. Financial institutions are starting to show a strong interest in offering trade intelligence through Trade Intelligence Portals to existing and prospective SME exporter clients as a complementary service.
Examples of banks with a relevant online trade information initiative are the following:
||Trade information portal|
|Santander Bank||Santander Rio|
|Societe Generale||Import Export Solutions|
Also, it is worthwhile to mention Visa, as a financial partner in the Connect Americas initiative.
This phenomenon is not such a surprise. Export means a significant amount of banking business (see box below) and SME exporters need trade intelligence at their fingertips. So a marriage between exporters needing market intelligence and banks seeking exporters to offer their bespoke bank products to.
In an emerging export sector much of the growth will come from SMEs. It is at this stage that capacity support and financial support is most needed. It is also at this stage that the company is exposed to the most risk if it makes uninformed decisions. At the same time a growing export sector that is boosted by the banking support is good for banking business. Hence investing in Trade Intelligence Portals from a bank’s perspective can perpetuate a series of mutually strengthening benefits (as the diagram above illustrates).
Room for added value
There appears therefore to be a great opportunity out there for BSO’s to approach banks as prospective sponsors for their Trade Intelligence Portal. Having said this, their current portals are more like databanks, which no doubt have much attractive information to offer, but fall short of being trade “intelligence” portals in that they do not offer real time customized trade support. They have therefore not yet positioned it to the full length of their potential. It is here that the real opportunity lies whereby the trade promotion organisation could seek to fill this gap.
As we have seen from all the best practices highlighted in the previous steps, Trade Intelligence Portals are enabling trade promotion organisations to become more proactive and reach out via multiple media channels to communicate recent, customized and insightful information to large groups of exporters at the same to help them make timely and well-informed decisions. Moreover, the service link with the exporting client has gone well beyond information provision and become a whole support system to strengthen and promote the exporter. The Trade Intelligence Portal is becoming the “must be with” service for an entire export community.
Banks can also be encouraged to leap on to this information highway where a large portion of the export business sector are present and offer customized banking products to customized client groups. The trade promotion organisation network of advisors and consultants can expand the reach of the bank by incorporating bank pre-requisite requirements into their advisory and training service products, for example guiding the export marketing business plans in line with prescribed bank credit provision criteria.
Export means banking business
A thriving export sector is good for banking business. Particularly for the SME sector, but also in larger firms, credit is frequently required. Think of for example:
- Pre-shipment credit – Post-shipment credit
- Export Credit Insurance
- Non-shipment/transaction based revolving credit
- Export project cash flow deficit finance (engineering type of export)
- Advance payment guarantees
- Performance guarantees
- Retention money guarantees
- Supply chain finance guarantees
- Other guarantees e.g. for customs
- Credit for product innovation or infrastructure
An important aspect to figure out prior to approaching banks to propose a partnership is what mode of partnership would be best suit both parties best. There are multiple modes in which banks can get associated with Trade Intelligence Portals. The diagram below illustrates a range of various possibilities.
Banks are becoming more and more active in the domain of international trade information portals. This is an excellent means for them to be visible amongst a selected audience of exporters and importers and serve them with the information required to internationalise.
– Gaspard Delassus, Head of Customer Relations, Export Enterprises, France
Acquiring Donor Agency Support
International development agencies often have private sector development programmes or projects that have similar objectives to your Trade Intelligence Portal hence offering scope for working together following aligned objectives. It is important however, as mentioned previously, to not treat the collaboration simply as a project that ends, but instead to build in mechanisms to make the Trade Intelligence Portal self-sustaining thereafter.
A key step in securing donor support for your Trade Intelligence Portal is to conduct a donor-mapping exercise. Such an exercise entails mapping through web research and personal interviews with donor agencies themselves, or their local partners, which organisation has a private sector or trade development program that could possibly support the development of a trade intelligence portal.
Using the outcome of the Mapping Exercise enables you to put together a well-fitting proposal:
- to the right agency
- in line with their respective broad in-country/region programmes
- in line with specific projects geared towards the same/ similar target audiences
- in line with the objectives and targets of the respective projects and matching sub components
- in line with the appropriate budget for the aligning sub-component
- highlighting the ways in which your Trade Intelligence Portal can complement the respective project and contribute to reaching the overarching goals.
Highligts Step 10
- Your Trade Intelligence Portal is of strategic importance. Make sure you take care of the sustainability accordingly
- Selling of information is not easy. Look for financial models whereby you can commercialize information by packaging it with other services
- Consider advertisement and premium membership models with exclusive trade information content or an early bird or alerting service as one of the privileges
- Look for collaboration with donor agencies and financial institutions that show an increasing interest in supporting trade portals to reach out to exporters as prospects for their financials services
Make use of ITC expertise
Want to know more about this step or how ITC can support you with your trade intelligence portal?
- Check our advisory services
- Follow us on: | |