Does Your Trucking Company Still Need An Outside Sales Force?
February 12, 2013
February 12, 2013
During my early days in the trucking industry, I spent a number of years directly or indirectly managing sales teams. At the time, the sales process was largely focused on number of personal calls per day and on customer entertainment. While service was and still is important, there was a heavy emphasis on face time with customers and prospects, through a combination of lunches, traffic club dinners, sports events and golf outings. One company I worked for had a policy of five customer lunches per week and two entertainments a month.
Representatives were encouraged to be “out in the field” making their designated number of calls per day.
The world of transportation sales is going through drastic changes in 2013. These changes are being driven by three key factors: economics, technology and customer requirements. Let’s take a look at each of these changes to understand their impact on the sales process.
During the Great Recession, every trucking company was forced to carefully scrutinize the productivity of each sales person in order to justify their value to the company. As part of this process, many companies began to realize that expensive car allowance programs, entertainment allowances and travel expenses, coupled with salaries, perks and bonuses made the value proposition of some street sales people quite unattractive. Poor producers were downsized. In addition to layoffs, detailed cost analyses showed that inside selling, which keeps sales people off the road, can be as much as ten times cheaper than street sales personnel. Industry estimates show that each contact made by an inside sales rep may cost $25 to $30 while a face to face sales call can cost $300 to $500.
Technological advances are making it much easier to sell without the face to face component. The internet, combined with tablet computers and smart phones is creating a revolution in sales processes. With virtual meeting software such as GoToMeeting and Webex, communication tools such as Skype and FaceTime, social media sites such as Facebook, LinkedIn, YouTube and Twitter, it is becoming easier to sell with fewer or even no face to face calls.
The technology is also having a profound impact on the cost of employee office space. An employee equipped with the technology can work from home and does not need costly office space. This increases the savings even more. According to statistics compiled by consultants at Bridge Group, 46 percent of sales people are working at company headquarters, 37 percent work at both the office and at home and 17 percent work fully at home.
The third change is coming from shippers and logistics service providers. As Transportation departments were downsized, there were fewer people and less time to meet with or even receive telephone calls from carrier sales reps. Transportation managers became more accessible via e mail rather than by telephone or personal visit.
In addition, over the past five years, the famous or infamous RFP or freight bid has become extremely popular with shippers. In some companies, the bids are done completely or extensively via technology. An actual face to face call may only be required if the carrier is short listed and/or during the implementation stage.
While each of these forces is quite powerful individually, collectively they are driving a major change in the process of transportation sales. These types of changes are being experienced across a range of industries.
Of course there are risks in having sales people work from home in an unsupervised environment. Years ago I remember finding one of our sales people, who was based several hundred miles from the home office, living a double life. He sold our services while working with another firm during his workday hours.
As a result, there is a requirement to employ another technological advance to provide visibility and accountability. This is where CRM or customer relationship management software comes into play. Using this type of software allows a manager in a remote location to see the number of sales calls being made and the stage of each prospect in the sales pipeline. Of course, the integration of CRM with actual sales data (and periodic spot checks), ensures that there is a high level of integrity and performance.
Does this mean that it’s time for carriers to cut loose their street sales teams? Not yet, since there is still a requirement to visit certain clients, in some situations, at various stages in the sales process. But these changes require sales leaders to challenge their current sales structure and their ratio of inside to outside sales personnel. It also requires sales leaders to examine how effectively their companies are employing the latest technology. It should be noted that every conversion from outside to inside sales necessitates a change in recruiting and training. To be successful, inside sales personnel require a high level of product/service knowledge and excellent computer/communications skills. The need for customer entertainment skills are much reduced.
Where does your company stack up? Here is a short quiz.
• How productive is your sales team?
• Does your trucking company have the right mix of inside and outside sales personnel?
• Does your sales team have extensive training in the latest computer and communications technologies?
• Is your sales team equipped with the most effective tablets and smartphones?
• Is your team using a quality CRM system?
• Has your trucking company changed its ratio of inside to outside sales personnel over the past 5 years?
How would you score yourself? Maybe it is time to take another look at your sales operation.
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 transportation and logistics organizations to help them improve their profitability. All posts by Dan Goodwill