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Cover Story: Winning hearts and wallets the old-fashioned way

Retaining existing customers and gaining news ones may come down to just how much your company can be trusted.


With apologies to comedian Jeff Foxworthy, if you get a surge of negative emotions when you see the acronym ‘RFP’, you might be in the trucking industry.

“These new RFPs that are out, that go out to a 150 carriers at a time, are killing the industry,” says Paul Enright, who holds the dual titles of co-owner of Direct Right and vice-president of its marketing and sales operations.

“A lot of the larger organizations are under tremendous scrutiny to reduce costs right along the board. There are a lot of companies that are headed that way and I don’t know where it’s at, truthfully.”

A 35-year veteran of the industry, Enright remembers starting out in sales at company where “we were expected to have a minimum of three lunches a week plus two major entertainments, meaning taking the guy to a football game or hockey game on the weekend with your wife. Now, that is done. There is a code of conduct that the major guys follow. You might be able to get a logistics guy out for lunch, but it’s tougher today due to corporate policy. It’s business ethics.”

Enright says that sometimes there still are opportunities to bond with customers during entertainment nights, but he admits the practice is seen less and less as a way to build relationships that translate into contracts or loads.

“We’ve had situations before where we went with the guy who was undercutting the guys we used for years, but they failed to do what we required as a customer. You’ll always have those people that undercut but you’ll also always have those people that you are loyal to.”

The combination of imposed standards for corporate ethics, cost reduction pressure on logistics budgets, and the increasingly elaborate RFP process is making it tougher for carriers to retain the customers they’ve had for years, never mind winning the loyalty of new customers. So how does a carrier lock down a customer’s heart and wallet?

“Customer loyalty and customer service seem to take a lesser role than the actual dollar and that’s a direct result of their corporate mandate. They see a five or six million dollar spend and they figure they can save 10% on it. I think the traffic people are under pressure to cut costs,” says a logistics officer with a large meat shipper, who agreed to be interviewed for the story on the condition of anonymity.

“We’re always looking for the best price. We want to pay hamburger prices and get steak.”

But, he acknowledges, sometimes the shipper has to pay steak prices.

“We’ve had situations before where we went with the guy who was undercutting the guys we used for years, but they failed to do what we required as a customer. You’ll always have those people that undercut but you’ll also always have those people that you are loyal to.”

Not particularly confidence building words, but still they still emphasize that relationships do count when push comes to shove.

A study by Mastio & Company, an international research and consulting firm, found that when it comes to customer loyalty, there are specific “conscious differentiators” that customers consider when choosing a carrier. The 4th Edition Canadian LTL Customer Value & Loyalty Study identifies and quantifies the perceptions and needs of less-than-truckload (LTL) customers. Four-hundred companies were rated in the last edition, and only 42 out of that 400 had a sufficient number of ratings to even be included in the report. Findings are based on interviews with 956 customers providing over 2,700 total observations.

“When we ask somebody directly what’s important to them on a scale from one to 10, ‘shipments delivered with no shortages or damages’ was the highest stated important attribute,” explains Kevin Hunstman, vice-president of sales at Mastio. Things like “accuracy of invoices” and “easy-to-understand pricing” are baseline requirements in the study. “It’s like tires on a car. If you are going to go buy a car tonight, you expect the car to have tires that are at par with the other competing offerings. Now if those tires are bald right off the bat, that car comes out of the mix.
“Then there are low-impact factors, which, just like the tires, don’t need to be better, they just need to be at par. The online tracking systems? You don’t need to have the best, and I’m not sure how much more business it gets you, it just has be at par. The detailed reports? That’s not where you change people’s minds to do more business with you.”

Where you change people’s minds are those conscious differentiators, he explains. “If you look at them, being honest and trustworthy is a soft skill. Drivers are courteous? Soft skill. Problem resolution? Soft skill.”

“Really, what drives a high-net promoter score, is ease of doing business. That’s so encompassing, but it’s so true. If you make it easy to do business with you, I want to give you more share of wallet.”

Then there are the operational things, like making deliveries when promised. “You would think those would be baseline requirements, and in most industries they probably would be, but here it’s such a critical factor.”

With shippers running much leaner than they used to, “they really rely on that collaborative relationship,” Huntsman adds. During the 2013 Surface Transportation Summit, Meyers Transportation Systems president Jacquie Meyers, who hasn’t pulled punches when sharing her thoughts on RFPs, noted that “customers are now calling in their strongest carriers and working with them to make their supply chain stronger and more resilient, and to drive out costs together.”

Business attributes like honesty and trustworthy, courteous staff, and effective problem solving go a long way to becoming one of those called-upon carriers. But perhaps the most important of those attributes is honesty.

Asked what’s the quickest way to get off his call-list, the anonymous meat shipper mentioned two things in particular: “Lack of communication and BS. I do not want to be BS’d to. If there is a problem, tell me, be up front with me and at least I know. I’m going to be mad, but at least I know. Don’t try to pull the wool over my eyes. When I find out a trucker is lying to me, it builds a lot of distrust, and when I can’t trust you, I can’t do business with you.”

Direct Right‘s Enright attributes his company’s recent growth to honesty. “Sometimes the sales people sell what they are not supposed to sell, sometimes the sales guys say, ‘Yeah, we can do that,’ and I keep telling them, ‘No, we can’t.’ You gotta be honest with them; being honest with them is the most important thing. If you can’t do something, turn it away. Honesty is the best policy and that’s why we are successful and continuously growing every year.”

Becoming a consistently reliable and trustworthy carrier contributes to what Mastio’s loyalty study calls a “net-promoter score.“ A high net-promoter score means that your company has customers that would recommend you to other possible customers.

“Really, what drives a high-net promoter score, is ease of doing business,” Huntsman explains.

“That’s so encompassing, but it’s so true. If you make it easy to do business with you, I want to give you more share of wallet.

“If my price is the same and your price is the same, who is someone going to do business with?” Hunstman asks. “They are going to do business with someone who is easy to do business with, someone who is responsive, the company that has knowledgeable people, and the company that wants to have a relationship. That’s really what it boils down to.”


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