As a logistics service provider, you need to constantly look for new ways to grow your business and satisfy your customers. But how do you identify and exploit new market opportunities and customer segments for your logistics services? In this article, we will share some practical tips and strategies to help you achieve this goal.
The first step is to conduct a SWOT analysis of your logistics services. This means evaluating your strengths, weaknesses, opportunities, and threats in relation to your current and potential markets and customers. A SWOT analysis can help you identify your competitive advantages, gaps in your service offerings, areas for improvement, and external factors that may affect your performance. You can use a simple matrix or a tool like SWOT Analysis Template to conduct your SWOT analysis.
Its important in Logistics to map the end to end supply chain for a particular region and hinterland areas. WRT SWOT its important because there goes huge investment in setting up infrastructure so its important to know Strength of your facility wrt Location advantage, Flexibility in service and being agile, ROI within computed time period and hinterland area and market complexion of that particular region. Further Weakness should be assessed wrt competitors presence, their pricing, Inhouse facilities of customers who in turn may be competitor in future and benchmarking Infrastructure. Opportunities may be wrt development of business clusters in region and to create infrastructure for the same & threats will be to keep innovating & trends
The next step is to research your target markets and customers. You need to understand their needs, preferences, expectations, challenges, and behaviors. You can use various methods and sources to gather this information, such as market reports, industry trends, customer surveys, feedback, testimonials, referrals, social media, and online reviews. You can also segment your customers based on criteria such as location, industry, size, revenue, service type, and loyalty. By researching your target markets and customers, you can tailor your logistics services to their specific requirements and pain points.
It is very important to monitor end to end supply chain of customer and how the product is going to reach last mile consumer without any pilferage and damage. The target segment identification is a mix of primary and secondary research focussed on existing infrastructure, need for infrastructure, market segregation, Inhouse logistics abilities of companies, Coming up of new entrants in the belt, Cargo clusters in bandwidth of over 500 Kms and prospective customers. Further the pricing has to be in line with customer needs and requirements for such an infrastructure depending on which infrastructure may be created
The third step is to develop your value proposition and differentiation. Your value proposition is the statement that summarizes how your logistics services solve your customers' problems and deliver benefits to them. Your differentiation is what makes your logistics services unique and superior to your competitors. You can use a tool like Value Proposition Canvas to create your value proposition and differentiation. You need to communicate your value proposition and differentiation clearly and consistently across your marketing channels and touchpoints.
Its Important to build your brand commitment to the stakeholders who are gonna be end users and build a differentiation in terms of brand lineage, brand co creation from the existing service verticals, unique proposition offered in terms of unmatchable brand experience and its important to provide customized solution to customers. Thus its important for brand to be agile as that will potray a value proposition to the Industry who are seeking Solution suited as per their Product and their end to end supply chain right from sourcing of raw material to end user channel.
Knowing and understanding your audience is crucial, not only in logistics services but in any business or field. Even a young comedian may not always resonate with an older audience. The key is to comprehend their needs and position yourself to address the market's requirements. Once the market is established, you can tailor your logistics solutions, thereby solidifying your positioning statement.
The fourth step is to explore new channels and partnerships. You need to find the best ways to reach and engage your target markets and customers. You can use various channels and platforms, such as websites, blogs, newsletters, social media, podcasts, webinars, videos, and events. You can also leverage partnerships with other businesses, organizations, or influencers that can help you access new markets and customers, or enhance your service offerings. For example, you can partner with e-commerce platforms, local delivery companies, or industry associations.
Logistics has been historically a 3PL business always and most of the successful companies among Fortune 500 has always advocated using them as their Supply chain partners. Thus target segment engagement is a major challenge for any new entrant because proposition of changing their existing supply chain may or may not excite them till they don't find value proposition in it. Unfortunately till date the customer acquisition in logistics has mainly centered around pricing and although it has peaked a lot still customer wants solutions which is meeting their target pricing. Unfortunately Supply Chain Managers are helpless as they are tasked to reduce supply chain cost every year. Thus there are a dire need to create brands in logistics space
The fifth step is to test and optimize your logistics services. You need to measure and monitor the performance and feedback of your logistics services in the new markets and customer segments. You can use various metrics and tools, such as customer satisfaction, retention, loyalty, referrals, revenue, profit, costs, quality, efficiency, and productivity. You can also use tools like Google Analytics, SurveyMonkey, or Zendesk to collect and analyze data. Based on the results, you can make adjustments and improvements to your logistics services to ensure they meet or exceed your customers' expectations.
Measuring Customer satisfaction is utmost important as that is the key to align the customers with your brand and ultimately brand advocacy would kick in where in the word of mouth helps in getting necessary traction of business in Logistics space. Thus periodic feedbacks in terms of Operations, Services, Audit reports needs to be carefully vetted to ensure customer remains loyal to the brand. Further any new market engagement requires an altogether new category creation for eg a logistics company operating in chemicals is switching to perishables cold chain logistics may not have that high acceptance level if there is already enough competition thus its important to ensure market acceptance level as such brand switchovers may tamper brand.
The final step is to innovate and scale your logistics services. You need to constantly look for new ways to add value and delight your customers. You can use various methods and tools, such as brainstorming, ideation, prototyping, testing, and feedback, to generate and validate new ideas for your logistics services. You can also use tools like Business Model Canvas, Lean Canvas, or Value Proposition Canvas to design and refine your business model and strategy. By innovating and scaling your logistics services, you can create a sustainable competitive advantage and achieve long-term growth.