How to Use Offshoring as a Low Cost Strategy

Published by Yann Beaullan-Thong on

Offshoring offers many benefits to your firm, not least the cost savings and productivity gains, but you can also use offshoring to successfully pursue a low cost strategy.

What is a low cost strategy? It’s a method you can use to stimulate demand for your services in a tight market and gain market share. Down the road, when you’ve shown your worth, the clients you win from your low cost strategy can become loyal and captive clients with whom you integrate at a deeper level.

Offshoring is not simply about the upfront savings, although they can be impressive on their own. The multiplier effect of offshoring is that you can use its benefits to amplify your wins.

A low cost example

Let’s say you have a team of six people. After you offshore and achieve the cost saving and productivity improvements, you can double your team for a similar cost per head as before. Then, you can use the bigger team to increase the range of services you offer.

Imagine getting the upfront benefits of offshoring that appear on your button line, plus the magnifier effect of taking on board more people and offering more diverse services for little extra cost?

However, it doesn’t come without some effort. With a low cost strategy, you must have a thorough understanding of costs and how to continually reduce them. That’s where a partner like Accsurant comes in. We know which levers to pull to keep your costs in check.

We do the hard work of standardizing your offerings to put you on a scalable path while managing costs.

Now you can pivot to a differentiation strategy

The benefits don’t end there. After you’ve won some new clients, you can pivot to a differentiation strategy. By using this method, you can be perceived in the marketplace as having a higher value to your customer than your competitors. The kicker is that you can do this at the same price as your rivals.

In a differentiation strategy, you must totally understand your customers’ needs and preferences. You must be innovative and constantly address those wants and needs. This will allow you to build your brand to maintain your position and visibility.

Imagine creating a pitch where you tell your clients that they have a choice between:

  • Vendor A – Lowest cost only. This is usually the cheapest firm that will only offer you one service.
  • Vendor B – Just as inexpensive, except that they offer wider services such as tax, audit, advisory, client accounting services

In case you haven’t noticed, you are Vendor B in this example!

In normal times, when the client requires services that Vendor A does not offer, they must go back to the marketplace to spend more time finding a new partner, getting used to their systems, getting onboarded, and waiting to find out if the quality of their services is acceptable.

Low cost is unavoidable

Offshoring allows you to play in the low cost pool while having more depth than your competitors. Let’s face it, in today’s cost-conscious world, your services, no matter how excellent, have no competitive advantage. However, if you use offshoring and then a low cost strategy the smart way, you can gain clients and embed your services, making it almost impossible for them to leave.

You can extract more value from them over time and take advantage of their growth curve because you are a trusted partner. But it all starts with offshoring, which allows you to roll out a low cost strategy and later a differentiation strategy.

Talk to us to find out how you can start your offshoring journey.

Yann Beaullan-Thong

Yann Beaullan-Thong

Yann is Accsurant’s president. With 20 years experience and six different technology startups behind him, Yann has a proven track record in developing innovative solutions based on his technology and financial acumen.