Our Own Worst Enemy

It’s hard not to think about trucking when you’re driving the QEW between Toronto and Buffalo. Most of the time the traffic makes it look like a truck stop, not a major international highway. It makes for very long drives, with plenty of time to reflect. At some point during my trip I realized the irony of the situation that I found myself in.

On one hand, I was about to take two days out of my schedule to attend a meeting with other senior trucking company managers about how we can be better government lobbyists. Advocacy work is important, and truckers working together can affect and change public policy in ways that save us all a lot of money.

On the other hand, my background is in sales and marketing. So while driving I’m not admiring chrome or the fancy paint jobs that adorn trucks on the road. I think about what’s inside the truck. Specifically, what’s inside the trailer and how much revenue it might be producing. I thought about the good old days: $5500 for a full load from Toronto to Los Angeles. Cross-border LTL shipments with 35% discounts. Now we’re hauling freight at cheaper rates than we were a decade ago.

It’s ironic. A lot of trucking company owners have no problem booking off time to present a positive and united front to bureaucrats. Yet every day in business, margins are eroding because carriers are cutting rates to attract new business.

Our price to the customers is one of the few things that we can actually control. The trouble is, when pricing is a primary sales and marketing strategy, the rate only moves in one direction: down.

When you cut a rate to get the business, chances are you’ll lose it just as fast for the very same reason: a cheaper rate. (Actually, that might be the best thing that can happen to you. You could end up stuck with the business for the long-term because the rate reached a level where no one else will haul it. It’s too cheap.)

I ran into a frustrated colleague a while back who told me that service was so similar among his competitors that he thought price was the only way to differentiate his company. I discreetly cringed and told the guy to broaden his thinking. Every one of us has a niche in the marketplace.
There might be thousands of trucking companies but most of us have no more than five or six core competitors, so really drill down and find other ways to beat them besides price. Consider these ideas the next time you get into a “competitive” situation.

People buy from people. Spend your sales time building long-term relationships. Get to know your customer. The better you know a person, the less the focus will be on the price.

Know you’re competition. What do they do poorly? What do you do better? Focus your sales efforts on matching your strengths to their weaknesses.

Focus on cost, not price. Are there costly problems in the customer’s supply chain that you can fix? One way to justify higher rates is to reducing the customer’s costs in other areas.

What’s the real issue? It takes a lot of time to switch carriers. In many cases, when a customer asks for a rate, he really wants to solve a business problem. Find out the real issue when he asks for a price.

Resist the price shopper. If you’re told by a prospect that you’ll get the shipment only for a cheaper rate, so will everyone else. Walk away. The customer isn’t worth your time, and may never be: people will do in the future what they have done in the past.

Give good service. People will pay for it. This business is pretty simple. It hasn’t really changed since we delivered milk with a horse and buggy. Your job is to pick up freight and deliver it on time, and when you can’t, you call the customer and let them know. Pay attention to what you are doing. People will pay for good service.

I hope my next trip down the QEW is a little faster and a little less ironic. We’re working on one. Let’s start working on the other.