Thankfully business conditions are improving in 2011 and freight volumes are more robust than they have been the past couple of years. As reported in a previous blog, freight rates are increasing. Shippers are taking less of a “bunker mentality” and are now looking for ways to optimize their carrier networks.
For carrier sales personnel seeking to secure new accounts, success comes from a persistent effort or “skating without the puck”. Opportunities to secure new business may arise when you least expect it. A new supply chain leader may challenge the status quo, an acquisition or plant closure, the U.S parent taking control of Canadian and cross-border freight movements, a series of service failures, a disproportionately high rate increase or a host of other reasons may trigger a search for a new carrier or logistics provider.
The actual process of securing a new account can be an arduous one. Some shippers conduct elaborate multi-round RFP’s. In certain cases, carriers must demonstrate that they have the fleet size and quality of equipment, appropriate insurance and good safety records to even gain consideration. Securing new business can take a combination of competitive pricing, good selling skills, strong IT capabilities, a terminal tour and possibly a set of trial shipments. Any slip-up along the way – – – non-competitive pricing, a less than inspiring sales presentation, a botched terminal tour, no EDI communications or other missteps can derail the entire sales effort.
Throughout the process, the new carriers are being compared to the incumbents. It is a big decision to leave a long-standing business partner, particularly if the partner has performed well. The decision is much easier if the incumbents have slipped up on service and there is a price variance. It is much harder if the incumbents have a stellar service record.
For some shippers, there is uncertainty as to whether they are making the right decision in making a switch. A failure can trigger a complaint from a customer, customer service representative, sales person and/or higher management.
For carriers that are able to pass all of these check points and make it to the trial shipment period, it is essential to “seal the deal”. This doesn’t always happen.
Some carriers don’t put the processes and procedures in place to “baby-sit” a new account and lock it up. Landing a new account involves several steps. The people charged with actually moving the freight must be engaged to develop the standard operating procedures (SOP’s) tailored to that account. These SOP’s must be communicated to those individuals within the organization who may come in contact with the shipper’s freight. This can be particularly complex for LTL freight moving throughout a carrier’s network.
There need to be two people who take responsibility for the new account. Typically a Customer Service representative takes 24/7 responsibility and watches it constantly. At one trucking company I worked for, we called it “Platinum Service”. That CSR must have responsibility for not just managing the movement of the freight but also for taking corrective action to prevent a late delivery, and for proactive communication with the customer in the event of a potential service failure. In other words, this individual must be constantly monitoring the KPI’s established during the SOP process to make sure all performance areas are achieved.
There also has to be a senior sales person who takes daily responsibility for the new piece of business. This individual is also responsible for monitoring the KPI’s, ensuring all of the promised routings are received and executed properly, communicating with other managers throught the organization and for making sure the decision-maker at the shipper organization is fully satisfied. This is particularly important at logistics providers where the assets employed are those of arms length trucking firms.
Surprisingly, as difficult as it is to secure new business, some carriers get distracted by other priorities and lose focus at the moment of truth. At this pivotal point, they move on to the next item on the agenda and assume the other members of their team will pick up the baton and get it right. The failure can usually be traced to a breakdown in communication. While the crisis in the Middle East is casting a dark cloud over the current economic recovery, it is still important for carriers and logistics providers to put their Platinum Service programs in place so they are able to successfully solidify the new business that they are trying so hard to secure.
Dan Goodwill, President, Dan Goodwill & Associates Inc. has over 30 years of experience in the logistics and transportation industries in both Canada and the United States. Dan has held executive level positions in the industry including President of Yellow Transportation’s Canada division, President of Clarke Logistics (Canada’s largest Intermodal Marketing Company), General Manager of the Railfast division of TNT and Vice President, Sales & Marketing, TNT Overland Express.
Goodwill is currently a consultant to manufacturers and distributors, helping them improve their transportation processes and save millions of dollars in freight spend. Mr. Goodwill also provides consulting services to investors, vendors to the trucking industry, transportation and logistics organizations. All posts by Dan Goodwill