Why Does Your Customer Buy from You?

Why Does Your Customer Buy from You?

Every business depends on their customers choosing them over the competition. This concept is so simple and obvious, that we forget about it sometimes.

We take it for granted that the customers we have will continue to work with us. A quick review of your customer list from last year, will most likely demonstrate that customers leave.

At TranStrategy Partners, when we ask our coaching clients why their customers buy from them, they often give superficial answers. Frequently, we hear “my customers buy from us because we provide great customer service” or “low pricing,” or “our integrity.” Customers may also buy because you have a specialty geared toward their business or because you make it easy to work together. Customers definitely consider all these factors when choosing a freight brokerage, but there is so much more that is missing.  

Irrational Buyers

There is significant research that suggests buyers make irrational buying decisions. Perhaps, your company was never the best option, but they chose you anyway. As a business owner, you need to know why your customers buy from you, even if the reason is a little out of the ordinary or off your radar.

Regardless of the reasons, your customer chose your company. Your company was considered the best option at the time, but…

Times Are Changing

There is new and different competition facing freight brokers. There are full-service 3PLs that offer a suite of services usually not offered by brokers. Carriers, who traditionally didn’t broker freight have opened freight brokerages. Lastly, there are new web-based freight marketplaces that will enable shippers to connect directly with carriers.

Shippers, including your customers, will consider these options. With the internet, it is easier than ever to research options. It is also easier than ever for your competition to find and connect with your customer.

Your freight brokerage might have been the clear winner when your customer compared your company to other freight brokerages, but how does your brokerage measure up against the new competitors?

The Questions are Easy, but the Answers are Hard

At TSP, we only work with freight brokers and transportation companies. We help our customers understand their customers and why they buy.

As part of our engagement, we do a complete competitive assessment of your company to determine how your company stacks up. If there are holes in your service offering, it is better that you discover them before your customer.

With the permission of our client, we interview their customers to understand why they buy and what they like about your service and where you can improve. We keep the interaction with your customers very positive and constructive. These exercises result with our clients having a much deeper understanding of their customers. This understanding almost always drives service and sales messaging enhancements.

If you want help getting the hard answers, like why do my customers buy from us, please contact TSP.

About the Author – Mike Temple

Mike Temple is a Senior Partner at TranStrategy Partners and the Director of the Xcelerator Leadership Program, which is designed to be a catalyst for accelerated growth for 3PL and freight brokerage businesses. The Xcelerator Leadership Program is a yearlong program that utilizes a unique process that maximizes business results with minimum disruption to day to day operations. Does My Freight Brokerage Business Serve Me or Vice Versa?

Ask the Coach: How Do We Grow Up?

Ask the Coach: How Do We Grow Up?

The “Ask the Coach” program is produced by TranStrategy Partners, the recognized leader in freight brokerage / 3PL coaching. Since 2004, TSP has helped hundreds of freight brokerage owners and top executives build the companies they want.  

Question: I read your recent article, “The Freight Business Grows Up” and as the owner of a freight brokerage, I agree with your assessment, but I am wondering where do we start? What would be a good first step to growing up? Tom in PA

Mike Temple:
Tom, thanks for the question. There is more than one way for your company to grow up, but to keep it simple, I will suggest that you find a way to add more value for your customers.

Before I elaborate on “adding more value” let’s examine the competitive environment as it has been over the past thirty years and where it is heading…

Freight brokers have traditionally competed against other freight brokers who have a similar value proposition and similar pricing. In the absence of a clear competitive advantage, freight brokers depended on personal relationships with customers.

In that market, a sterling reputation, a dependable carrier network, fair pricing, great customer service along with personal relationships was enough to be very competitive. The best freight brokers differentiated themselves by excelling at the day to day blocking and tackling.

Of course, every shipper has their own expectations. While some shippers value a strategic relationship that includes a high degree of integration, trust and customer service, other shippers are content with a transactional relationship. The transactional shippers may work with multiple brokers and value a lower price over relationships and customer service.

The Evolving Freight Market
Today, freight brokers must compete against companies that have very different business models, service offerings and value propositions. Shippers have more options than ever before. In fact, it is hard to list all the new types of business models and companies that have sprung up in recent years. A few of the new options are discussed below.

Shippers who move freight in multiple modes may decide to consolidate all their business with a full service 3PL that can manage their ocean freight, drayage, warehousing, LTL and truckload needs.

The transactional shippers (who don’t value relationships) may be lured to some of the online freight marketplacesthat enables them to save by cutting out the middleman. Many people in their twenties and thirties grew up with the internet and may be more comfortable with a well-known website than a broker relationship. For proof, look at what Amazon did to the brick and mortar retailing vertical.

Over the last decade, many 3PLs and brokers bought asset based companies and vice versa. These hybrid or asset light carriers offer the best of both worlds – assets and full service brokerage. When there is a shortage of trucks for a given lane, these companies become a very attractive option for shippers because they can use their own trucks or broker the loads.

Compete by Adding More Value
To compete and win in this new market, companies must find ways to add more value for their customer. Provide such a superior service, that the customer never considers the alternative.

Understand the Customer – Solve More Problems.
To add more value, solve more of your customer problems. Rather than define your customer’s needs as a low price and good service, go deeper to understand the problems facing them and their industry.

Develop a Specialty
Rather than just moving freight for retailers, develop a full-service retail logistics specialty. Do some research on trends and challenges, attend retail logistics events, create reports, case studies and best practices that position your company as the retail logistics experts. 

Provide Insights and Recommendations
With all the transportation management systems, sensors, GPS and other information created, your company can gain new insights into your customer’s business. Use these tools to gather the right information on problems and challenges facing your customer. Providing raw data isn’t always that helpful. The value is when you identify trends and opportunities from the data created.

Expand Your Services Offering
Many brokers and 3PLs are partnering with other transportation providers to expand their service offerings. For instance, if you specialize in retail logistics, it might make sense to align your company with a home delivery / final mile carrier so you can serve the rapidly growing retail home delivery market.

About the Coach Mike Temple is a Senior Partner at TranStrategy Partners and the Director of the Xcelerator Leadership Program, which is designed to be a catalyst for accelerated growth for 3PL and freight brokerage businesses. The Xcelerator Leadership Program is a yearlong program that utilizes a unique process that maximizes business results with minimum disruption to day to day operations. Check out our white paper: Does Your Freight Brokerage Business Serve You or Vice Versa?