Forward growth: How freight forwarders can improve customer retention and increase growthby Shawn Casemore on 2012-07-01 05:14:13
Have you noticed that virtually anyone with a phone and email address has become a freight forwarder? There are a growing number of individuals defecting from larger forwarding companies to hang out their own shingle. Why? They recognize that what most customers need is personalized service, and the larger forwarding agents do not have the capabilities to achieve such intimate service levels (hence why they are loosing market share to these smaller boutique-type firms).
The fundamental elements of success in operating or growing as a freight forwarder are no different than in any other business, specifically the alignment and synchronization of people, process, and technology. The challenge? The complexity and diversity of relationships that exist to create a freight forwarders value chain result in communication delays and breakdowns. Not the best ingredients for growth.
In our work with dozens of freight forwarding companies, we have developed a model that in turn drives customer retention and growth, all while maximizing profits.
Here are three of the fundamental elements to our business improvement model:
1.Nothing is left open to interpretation.
If you have ever travelled to a foreign country, you have likely experienced culture shock once you realized that your language was no longer commonly understood. This is a barrier that all international forwarding agencies face, but how it is dealt with is often ineffective. Attempting to integrate bi-lingual individuals is a common solution; however, the predominant communication method employed is still email. Communication should rely less on written words, (the least effective form of communication in any language) and be comprised of communication layers. For example, more complex discussions should be held using face-to-face communication methods (i.e. Skype, Video Conferencing), whereas simple communications should be driven through process, such as the use of forms, checklists, or online portal prompts. Nothing should be left open to interpretation.
2.Seamless time zones.
During a recent discussion with one forwarder, they stated that their typical call-off for scheduling the pickup of a customer’s freight in Italy is two days prior to pickup. Ridiculous! Most forwarders struggle with the effective use of time. Waiting for information from other parties is stressful enough, but when the parties reside in different time zones, the problem is only exacerbated. One of the simplest methods to eliminate these gaps is to modify existing shift schedules to ensure that there is time zone overlap and in turn, seamless communications despite geographic regions.
3.Pull it together.
If you were to map the communication pathways of most forwarding agents you would end up with something that resembled whole-wheat spaghetti. It may appear to be effective, but most customers are gluten intolerant. Communications should be standardized and streamlined to ensure information is clear and time use is optimized. The only thin worse than picking up the wrong freight, is picking up the wrong freight late. Optimizing communication channels improves accuracy and reduces cost.
Developing a sound business model, one that will grow the business, is the result of streamlined processes and alignment of people and technology. By reviewing and acting upon each of the three areas above, freight forwarders can dramatically improve their customer satisfaction leading to increased business retention and rapid growth.