Very few industries have seen as many changes as the logistics industry, with fuel costs, compliance, and global trade volatility dominating daily headlines like never before. In this dynamic environment, Logistics Service Providers (LSPs) must embrace new approaches to move forward. Despite some rebound in the economy and freight volumes, very few companies attribute their growth to a substantial increase in current customer volume. Rather it is business acquired through new products, new routes, or new accounts – business they have likely taken from another LSP. When I meet with companies that are losing business, I find that more than likely they aren’t engaging CRM solutions as part of their standard sales automation and process management.
Sales automation and process management seems to be the latest dynamic for the logistics industry to conquer. The old model - hiring account managers with “books of business” and turning them lose – doesn’t work anymore. Yes, personal relationships are as instrumental in logistics sales as other industries, but C level decision makers also expect value, visibility and information. Account managers need both talent and tools to be successful in the sales process.
Visibility is essential
Acquisition of quality sales talent is a major challenge facing the industry today. Rarely do you find the ideal candidate who requires minimal development effort and comes with a book of business. An all too common staff development approach taken by sales managers is to give sales recruits 6 months to sink or swim with minimal investment in building skills. When someone “washes out” because of a lack of opportunities to develop their skills, any investment made in them is lost. When this happens in sales the immediate impact on the business is especially acute. By the time a team member has reached the point of sinking, opportunities have been lost and potential revenues forfeited. A better approach is to hire the right people in the first place. Then provide them with the right tools, and most importantly, a sustained mentoring effort. This approach provides a solid foundation on which to build Sales capabilities. It seems fairly simple, but in practice this approach requires a certain amount of management visibility.
CRM systems unleash talent and retain business intelligence
In the logistics sector this lack of visibility often stems from the lack of an appropriate CRM system, or the lack of one altogether. When carefully chosen and competently implemented, a CRM provides management with a powerful new tool, allowing them to identify and nurture ability and build-up struggling potential. Sales managers are usually quick to embrace an integrated CRM, seeing the immediate and long term benefits. Even sales teams, who can be notoriously reluctant to change, enthusiastically support new CRM processes once they realize it automates their sales reports.
It is not hard to see why sales teams would welcome a tool which reduces the proportion of their workload not directly related to selling - allowing them to spend more time making sales and making money. An integrated CRM system follows the life cycle of a customer from building awareness, to marketing & sales campaigns to customer; all without data re-entry. The sales team can build a customer profile for SOP Standard Operating Procedures without having to resort to memos or external routing guides; these functions should be an integral part of the system.
A CRM system minimizes the loss of customer relationships and data intelligence through staff turn-over because the point of data integration is located in the system itself rather than in the sales personnel. This gives the company ownership of this important accumulated corporate knowledge. When the inevitable periodic turn-over of personnel does occur, incoming team members can be smoothly inducted, and the transition is a less disruptive process for both the customer and the business. It’s important to note that while there are many good general CRM systems on the market, logistics service providers have particular needs that demand an industry specific solution. You aren’t likely to find routing order management on most standard CRM’s!
Many LSPs embrace the mantra that customer relations are a priority function. But, when it comes to maximizing sales it needs to be an integral function. A properly executed and integrated CRM allows for sales to be more productive and concentrate on sales instead of administration, gives management the visibility and development tools to nurture the right talent (and identify the wrong talent), ensures the customer is “owned” by the company and not the sales rep, and most importantly, gives the customer a better experience across the entire organization. In my experience, an integrated logistics CRM is the foundation for building sales productivity and customer retention.
Gene Gander is Vice President Business Development Americas for CargoWise®
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