Throughout my university life,I have been educated to consider sales as per the 4P'S/7P’s of marketing. The theoretical way of marketing and sales always focused on products,price,promotion etc.In the freight forwarding industry,most of the clients either select their service providers based on bids or spot quotes.In both the scenarios,the information they expect from a freight forwarder is often in the same structure;
Product:Import/Export/Brokerage?
Price:Cost of moving shipments?
Place:Market Share/Market Ranking?
Promotion:Value-add that you can offer?
However,after spending years in freight forwarding sales and learning from some of my clients who are successful in strategic partnership,I believe that it is not the above 4P’s that make an organization successful in partnering with the right provider. I believe the below4P’s make a huge impact;
Purpose
Organizations looking for a differentservice provider always give first importance to the new provider's products.That is why,products always has a top rank in the buying process.Because of the traditional sales people, who always focus on their products first,many organizations who look out for new freight forwarders also focus on the same.
Some example questions that I get from new target clients who has transactional way of looking at providers are always the same;
How many trucks do you own?
How much volume do you carry?
Howlarge is your warehouse?
How fast can you clear shipments?
What is the unique feature of your service?
It is always about products,products,products!Organizations look at a different service provider for various reasons, to achieve something substantial, to do a major change, to grow significant revenue and to make their supply chain stronger. If this is one of the factors, then the discussion with your freight forwarder should be on yourPURPOSE and not on their PRODUCT.In our company, as an employee, we have always been trained to focus on the purpose first,even with our superior product offerings. As a freight forwarder,if we are not aligned with your purpose,then what is the point of having superior product offerings? It is like a Volvo commercial transportsales person,selling a Volvo coach to a customer who wishes to transport 5 people in his family. Yes,both Volvo coaches and cars are superior offerings,however just because the sales person is selling a coach doesn’t mean that the consumer has to buy a coach to transport just 5 people who can also travel in a 7 seat SUV!
So,find a company who aligns with your purpose,becomes your partner for achieving your vision.Partner with the purpose first and the best product offering will follow!
Process
The next step organizations concentrate during a buying process is always Price.Once they are happy with a product with/without a shared vision with their provider,their focus would be to get the cheapest price for that particular product. However,Price has to be replaced by Process.
When you partner with a company who has heavy focus on process and efficiency,price will take care of itself.I often hear questions from clients on Price,
What is the cheapest price you can offer for air freight?
My answer,why do you ship Air freight and if you have to ship only air freight,then what options have you evaluated to ensure that you are not shipping only via standard air freight?
Streamline your process first,price will definitely go down!
People
The third key aspect of the customary buying process is always about PLACE. Customers always look for the right place to buy andwould like tounderstand the place where the service provider stands. In our industry,often consumers ask me of our market share and market ranking.While I am not denying the fact that market share and market ranking are important,those alone are not going to help you achieve your goal.It isthePEOPLE who are committed to your vision, who can makethings happen.
In the history,ground breaking success has always been possible due to PEOPLE and not due to PLACE. Sir Edmund Hillary did not climb Mt Everest because he was a local and knew everything about Mt Everest,but he climbed Mt Everest because of his vision and his own skills and processes that he practiced coming from the other part of the world.
While you look for the best partner,it is very important that the organizations you are evaluating has great people. Great people are not just people who has past glory,market reputation etc.It is the ones who work with passion and strive to achieve their client’s vision which they share with them personally.It is always thriving people who will find value in unexpected places!
Performance
The last but not least aspect of the habitual buying process is PROMOTION.Once the customer understands about the Product, Price, Place, all they want to know are the value-add that they can receive. While value-add and promotions are wonderful to have, organizations should focus on the strategic aspect of PERFORMANCE.
By focusing on the culture of performance in your service provider,you can easily understand if they are the right fit for your vision.
A vision can’t be achieved without performance,however a lot of companies tend not to concentrate on understanding the culture of performance before partnering with a service provider. As logistics professionals, if we did not ensure meeting expectations of our customers, then our internal performance will not bemet and will result in totalfailure.
I have known numerous industry professionals who will never join a company which motivates their employees based on performance.These professionals will always join a company which provides them decent fiscal benefits irrespective of their performance.If people working with your service provider,can’t back up their personal work,how do you trust that they will commit to your goals?At the end,Success happens onlywhen performance overlaps goals!
To conclude,organizations looking out for a strategic supply chain partner,don’t give prime importance to Product,Price,Place and Promotion.Rather concentrate on Purpose, Process, People and Performance and I can guarantee, you will get a superior product offering with a good price supported by tons of value-add!
Thanks for taking the time to readand I look forward to your thoughts on strategic partnership with your service provider!
