Trade Commissioner Service Client Survey - 2009

1. EXECUTIVE SUMMARY

1-1 Background, Approach and Methodology

The TCS Client Survey provides the TCS with an opportunity to take the pulse of its clients, and ascertain the level of satisfaction with the services offered, as well as understand the service attributes (e.g. timeliness, consistency, etc.) that are most important. The implementation of the 2009 TCS client survey allows DFAIT to meet its Departmental Performance Report (DPR) and management Accountability Framework (MAF) obligations and addresses several tactical objectives (that are outlined in detail in the body of the report).

The survey questionnaire was developed in close consultation with key departmental stakeholders. It consisted of 40 primarily closed-ended questions, which was designed to take approximately 15 minutes to complete. The census survey involved an online (email-Web) data collection methodology and targeted TCS clients who had received at least one Core or Key service between April 1, 2008 and August 31, 2009, or received a business lead or intensive support with respect to investment attraction during the same time frame. In total, 12,349 TCS clients were invited to participate in the survey. Fieldwork was conducted from November 4 to November 27, 2009. During this time a total of 1,449 clients completed the survey, representing a response rate of 12% which is consistent with industry norms for this type of survey among Canadian businesses.

The (1,449) TCS clients that participated in the survey were highly representative of the total population of clients in terms of the following characteristics: region, organization type, and sector.

1-2 Key Findings

i) Use of Services

Missions abroad (an embassy, consulate or a trade office located outside Canada) are, by far, the source most used by clients accessing TCS services (91%). Other TCS channels such as a TCS Regional Office (36%), a Government of Canada or the DFAIT website (33%), and the Virtual Trade Commissioner online portal (32%) were used by only about a third of clients.

In terms of the types of services used, finding qualified contacts in a target market (63%) ranked first, followed by local company information (41%), preparing for international markets (39%) and obtaining recommendations of trade fairs/missions to attend (36%). While these are the top four services used, many organizations also requested TCS assistance in other more niche areas ranging from assessing the organization's potential (26%) to leads on export sales (19%) and identifying financial funding assistance (9%).

Most clients already had experience doing business in the target market for which they requested assistance (51%), or had at least some experience with international business relationships (38%) at the time when they requested assistance from TCS. Only 7% of clients indicated that it was their first time doing business abroad at the time of the request.

While the majority of clients interested in developing business abroad chose a specific market mostly based on the potential of exporting goods (58%) or exporting services (29%) many clients are pursuing different types of commercial transactions in a given market. On average, a client uses 1.4 transaction types to enter a given market. Most clients are using exporting plus one or two other vehicles, most notably R&D partnerships and licensing of their technology.

ii) Evaluation of Services

Regardless of which service was last used by TCS clients, the large majority of service requests were acknowledged within 5 days of the initial request (80%); however, significant proportions of requests (as high as 13%) were not acknowledged according to the five day service standard. Overall, acknowledgement of service requests was higher among clients who contacted an embassy (83%) or Regional Office (82%) compared to headquarters (72%) or users of the Virtual Trade Commissioner (69%).

About seven out of ten clients rate the services provided by Regional Offices and Missions as "excellent" or "very good" in terms of ease of use, quality of information provided and timeliness of delivery. The proportion of clients who provide an equally high rating for either the VTC or headquarters is lower at about one out of two.

Survey respondents were then asked to rate the TCS on a series of attributes, specifically thinking about their latest service request. Overall, a solid majority of clients were positive about every aspect of the TCS' service delivery. Regardless of which service was requested, the vast majority of clients did not encounter any problems accessing the TCS service in the language of their choice - English or French (90-93% agreed/agreed strongly). However, clients whose language was French were less likely to agree that they were able to receive the service in their official language of choice (82% vs. 90% for clients whose language was English). Also, irrespective of the type of service, most clients felt that staff was knowledgeable and competent (82-89%), and also felt confident that their privacy and commercial confidentiality was being protected (82-89%). About four-in-five also believed that the information received was relevant (78-84%), they were able to reach someone from the TCS when needed (76-82%), and dealt with a reasonable number of people (76-84%).

More than half (56%) of all respondents claimed that they would definitely recommend the services of the TCS to colleagues or business associates and almost two-thirds (64%) would definitely use the service of the TCS again. These figures climb to about nine out of ten when considering positive intent, i.e. combined fairly likely, probably and definitely. This is a very strong endorsement from clients of their overall satisfaction with the TCS - only 10% or less claimed they would probably or definitely not recommend or use the TCS again.

iii) Client Needs

The most significant need identified by clients was referrals to qualified contacts (78% indicated fairly strong or very strong need). Information on local organizations or companies (72%) and market intelligence and information (72%) were equally likely to be viewed as an important need. Other types of support for which a majority of clients indicated a strong need included: referral of international business opportunities (65%); advice on market access problems/challenges (62%); and, recommendations of trade fairs and missions (55%). Although many of the support services identified by clients appear to be more niche oriented, it should be noted that the even the service with the least demand, i.e. advice on implementing an investment strategy, was identified as a strongly needed service by at least one-in-five clients (21%).

The United States (U.S.) was identified by 22% of clients as the most important market for future growth (or 33% as one of the top three markets), which was only slightly ahead of China, which was the second most mentioned market (17% selecting it as the most important, or 31% in the top three). Brazil, the United Kingdom, and the European Community (as a bloc) round out the next three most important markets.

The biggest challenge faced by clients is the rising Canadian dollar, identified by 76% of clients as being either very of somewhat important. Foreign tariffs and trade barriers (71%) was identified as the next most important challenge that clients face, followed by the uncertainly of international standards (66%), corruption (64%), access to financing (63%), distance to customers (61%), and linguistic or cultural obstacles (61%).

Clients' level of knowledge regarding the TCS' policies, strategies and activities to promote and advise on Corporate Social Responsibility (CSR), Global Value Chains (GVC) and Canadian Direct Investment Abroad (CDIA) is relatively limited (only about one in three have a "good", "very good" or "excellent" understanding).

iv) Business Impact

A majority of clients agreed or strongly agreed that the TCS contributed in areas related to the provision of market information and intelligence, facilitating contacts, and improving their profile and credibility overseas. The TCS was somewhat less successful in contributing to their clients' ability to avoid mistakes and delays, and overcoming barriers to new foreign business opportunities, although it should be noted that such situations are often difficult to foresee and/or overcome. Nonetheless, over four out of ten clients acknowledged that the TCS contributed in these areas.

More than half of all respondents indicated their organization had actively pursued or entered into negotiations of a commercial agreement with a business partner in markets where they had sought assistance from the TCS. Among these clients, almost half concluded (or signed) a commercial agreement and 15% concluded an agreement and recorded financial results, while 9% concluded an agreement without recording any financial results. The export of goods (40%) was the most common type of financial result achieved by TCS clients. The only other types of financial results identified by a significant proportion of clients are export of services (28%) and partnership, joint venture or other alliances leading to revenue (19%).

Over half of clients who recorded financial results attributed at least part of their success to the TCS. The TCS was most likely to have had a "major contribution" in terms of partnership, joint venture or other alliance leading to revenue (14%).

In total, TCS clients who participated in the survey and provided relevant information are estimated to have concluded financial results valued at about $4.2 billion between April 1, 2008 and March 31, 2009. The TCS' contribution to these financial results is estimated to be over $1.1 billion. The average stated value of each transaction made by TCS clients (who provided this information) was just over $4 million and the TCS' contribution to the achievement of these financial results, is on average, 27%.

Most TCS clients believed that they would have still achieved financial results without the assistance of the TCS; however, a solid majority indicated that it would have required more resources than they had expended if the TCS had not assisted. About one out of ten clients that achieved financial results stated that they could not have done so without the help of the TCS.

Of the organizations that concluded a commercial agreement, about one quarter indicated that there was a change in employment or a transfer of new technologies in their organization as a result.

Among clients who used the TCS for attracting Foreign Direct Investment (FDI), about one third agreed or strongly agreed that the TCS provided information, service or support which influenced a FDI for Canada and that the information and documentation provided may have influenced the final decision on the investment location. A notable number of FDI clients (about one-third) could not provide an answer (i.e. "don't know" or "not applicable") with respect to the contribution of the TCS with respect to FDI - this is likely the result of the longer lag time between the delivery of services and a transaction or business outcome taking place, as the outcome may not yet be known.

About two-thirds (66%) of clients indicated they were satisfied (ratings of "4" or "5" out of "5") with the services and advice provided by the TCS. Conversely, only 13% of clients were clearly dissatisfied (ratings of "1" or "2" out of "5"), while about one in five (21%) were neutral (rating of "3" out of "5"). Satisfaction levels vary depending on client characteristics. For example, larger organizations tend to be more satisfied than smaller ones and clients whose last service request was with a post in Southeast Asia or US consulate were slightly more satisfied than those who dealt with very large posts or any other post.

1-3 Conclusions and Implications

The TCS has a substantial positive impact on Canadian clients' international business development efforts - we estimate that TCS services and intervention contributed roughly $1.13 billion in additional financial results to Canadian clients in the 2008-09 fiscal year. This represents over one-quarter of clients' stated financial results from their international business development activities. The conclusion of a commercial agreement also has an impact on both employment and the transfer of technology.

A solid majority of clients are satisfied or very satisfied with their overall experience with the TCS. That being said, the fact that one-third of clients do not feel that way means that many clients are sending a message that there are opportunities for improvement. In general terms, clients are largely satisfied with the generic service attributes: ease of use, timeliness and quality of information provided. However there is a sentiment among approximately one-third of clients that staff do not sufficiently understand clients' business to add value to the business development effort, and many see staff as not clearly explaining the business rationale on whether or not to pursue an opportunity, or being creative in providing advice beyond the initial request. Also, with regard to finding qualified contacts, one-third of clients who have used this service did not feel the contacts provided were appropriate, which signifies an important gap.

Missions represent, by far, the principal entry point for TCS clients; and, just over one-third of clients access TCS services through regional offices. Many clients continue to make use of missions and are using services which can be delivered via the on-line channel, i.e. visit information and recommendations on trade fairs and missions. Given the costs of delivering these services via posts, the TCS should verify whether appropriate content is available from its on-line portal for individual missions, whether this information is up-to-date and continues to be responsive to evolving client needs. Depending on its cost-benefit analysis, the TCS may need to take bold steps to drive clients (and especially partner clients) to alternative service channels for this information and to dedicate necessary resources to keep electronic information sources accurate and up-to-date (e.g. important trade events in their territory).

The U.S. still is regarded as providing the greatest future market opportunity by the greatest number clients; however, fewer than one in four clients still believe this to be the case. More importantly, the survey findings show that clients view many more different markets as providing their greatest opportunity for growth. Emerging markets are clearly becoming more important to clients' future growth potential, and the TCS must ensure that the resources and service delivery mechanisms are in place in these markets to provide the requisite services.

About two out of three clients only have a fair level knowledge (or worse) of TCS policies, strategies and activities with regard to Corporate Social Responsibility, and even fewer (one-third) have a good knowledge or better of TCS policies, strategies or activities with regard to Global Value Chains. The TCS has an important opportunity, almost as a necessity, to close the knowledge gap and provide assistance to clients with regard to dealing with corruption and CSR. As clients venture increasingly into emerging markets, as they indicated that is where their future growth opportunities lie, the onus will be on the TCS to augment its service offering in the CSR and corruption areas.

While the exporting of goods and/or services remains the principal interest in a foreign market, four out of ten clients indicated more than a single interest in any given market, with the average client indicating 1.4 different activities. Most of the time exporting goods or services represents one interest, with the other key interests tending to be R&D partnerships, licensing or franchising, and to a lesser extent CDIA. Integrative Trade is taking hold, although it still appears to be relatively underdeveloped.

March 2010