How To Identify Your Perfect Logistics Customer

In our last post, we explained how a shipper could identify a perfect service provider based on a fit of cost, core competency and corporate culture.

The service provider in turn should target prospective customers based on those same criteria.

COST

While service costs will almost always be a major consideration for any shipper, beware the shipper using a comparative pricing table as a barrier to entry and further consideration.   Your perfect logistics customer understands that there is a fair market price for those services in which you specialize and that given the time and opportunity, your rates can meet or beat the market price for comparable services and value.

In time and for the life of the relationship, cost-benefit and market analysis will reinforce the service provider’s value proposition but initially, a general understanding of cost competitiveness should suffice.  The sophisticated customer understands that there is an optimal service level – not too fast, not too slow, not the cheapest or the most expensive. They know that the right service provider offers tools and expertise that ultimately save time, headache and cost.

CORE COMPETENCY

Most established logistics companies have a legacy competency – a courier company, an international freight forwarder, a U.S. customs broker or a national rail company.   While they might branch out into other services or bundle their services with those of other logistics companies, their core competency(s) is born out of their history in the marketplace.

The company that provides logistics services to General Motors has developed systems and processes and has hired people to service very specific needs. This same company would probably offer tremendous value to the Ford Motor Company as well.   They would have an understanding of the equipment requirements, the customs and security regulations and any special handling needs.   However, this specialized logistics company might be less successful in trying to onboard and integrate with a fashion garment customer, for example.

CORPORATE CULTURE

 Your perfect, long term, profitable logistics customer is relatively easy to manage because you are culturally aligned with respect to:

  • Company size: big, small or medium sized company
  • Process driven or market driven
  • Automated or manual
  • Bureaucratic or entrepreneurial
  • Communication style
  • Credibility
  • Brand promise

Finding a cultural fit is part art and part science.   While less tangible than cost or core competency, a cultural fit between shipper and service provider is the glue and the grease that will see the relationship through the inevitable challenges inherent in a logistics relationship.

By targeting prospective customers based on a fit of cost, core competency and corporate culture, the service provider becomes a valuable and integral partner – controlling costs, mitigating risk and creating a competitive advantage for the shipper.  This perfect customer in turn allows the service provider to scale and replicate existing processes in order to earn a fair and long-term profit.