Competitive Advantage
Starting our business “back in the day” looked much different than how it looked when it was sold. There were season’s of many changes and opportunities. Having been the founder and the company’s CEO since its inception I had to face many challenges and decisions, that I was unprepared for.?Over a 24 year run, we faced multiple shifts in our industry, the economy and the competition.?
My background was sales and marketing and I was 31 years old. I did not build the business on my own, there were other shareholders, 5 of us. Those challenges can be enough to break most companies. There were buy-outs over the years, and a name change to where two of us ultimately worked together and divided all the shares when we sold in 2009.?
Rather than share all the successes and challenges I’d like to focus on the competitive nature of our industry, of trucking/logistics. We were a small fish in an ocean of competition. Many were several billion dollars in sales. We were in a commodity industry. Just look around at all products in your home, business, your closets, refrigerators and cupboards! You name it, it was on a truck at some point.?
Pricing became a major factor soon after President Reagan finally brought deregulation to the trucking industry. This allowed us to enter the LTL trucking business in 1986.?
When we entered the market, we only serviced 6 Midwest states out of Southern California. We covered direct service using exclusively, sleeper teams. We out serviced the larger truckers by 2-3 days. We also could give our customers a better discount by over 10-15% lower than the competition.?
At that time, there didn’t exist corporate Websites, cell phones, no texting and only the beginning of companies having PC’s on everyone’s desk. Our business was gained by face to face sale calls and building trust, superior service, relationships and lower pricing.?
We were based out of Orange County CA. Our potential customers shipped to many states we didn’t service, we were trying to just get a piece of their shipment lanes. We were an additional carrier to their vendor list.?
We were growing quickly and were developing a name for ourselves. We grew our sales teams with talented and experienced sales personnel. Top sales people were soon knocking on our door wanting to work for us.?
After our third year we found ourselves being challenged by two competitive fronts. One, our pricing was being matched and two, many were matching our service! The term ”differentiation”, was the new struggle we now faced. How were we going to differentiate ourselves over the competition??
All were highly competitive with pricing. Offering bigger discounts than what we would offer. Offering??a wider range of service areas.?
Some were the oldest carriers in the nation.?Roadway, Yellow Freight, Consolidated Freight, who were the 3 largest in the country at the time.
Mergers and acquisitions were taking place. Some of the biggest carriers were losing money and were filing for bankruptcy.??Union companies were facing labor strikes. Chaos, mergers, failures, new entrants, freight brokers, etc. the market was constantly shifting.
?The issues we faced was 4 fold:
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Out of these 4 I’ll focus on in this message regarding sales.??Part of my background was traveling around the U.S. training sales personnel and sales managers how to increase their sales through utilizing a communication skills system from Psychological Associates.?I was a certified trainer and a trainer of trainers.
I personally trained our sales force on how to properly have a discussion with potential clients to bring the client to a mutual understanding of each others business and how our solution was superior to our competitions.?
3 specific goals are met for the customer to make a decision.
Sounds simple, doesn’t it? It’s not. Managing a customer’s real issues takes effort in understanding their needs. Today’s term is pain! or “What’s keeping you up at night?” I don’t see us as doctors trying to cure their pains, I see us as partners helping them reach their overall goals for their company. In order to do that, it means we have to understand the client’s business and where we might fit into their strategies. This takes listening skills; by asking and showing interest and showing you understand their business. Most salespeople don’t listen, they just go into a pitch or push to show a “demo”, and the customer goes right to playing a tennis match where both parties are lobbing questions and answers.
?Sales Training for most companies is seen as an expense that they’ll pay for every so often. And its impact seldom has any long term or desired impact.?
?Our training was customized to our industry and specifically, our company. I trained sales managers to become trainers to establish a bench of committed managers to lead us in the future. It was our culture. It was our differentiation. The impact of teaching real solutions for our sales teams, helped us having long term sales departments with very little turnover.
?So,? what’s the benefit of having little to no turn-over? Customer relations is the single biggest reason clients want to work with you, even when the competition makes moves to take your business away. If the customer sees constant changes in sales representation, PRICE becomes a major issue in keeping your client. If you have to keep lowering your price to keep the business, so do your margins drop!
?The company’s culture had huge impact as well. It is my theory that, every employee is a salesperson. Every Contact the customer has with us, from the phone answering system or receptionist, to the dispatcher, the truck driver, our trucks cleanliness,
our billing accuracy, and all communications demonstrate a singleness of who we were as a company. It builds trust and confidence to our employees and the customer. Turnover causes distrust of your messaging to everyone, customers included.
?Today’s sales resume’s look like a travel log of job changes. Many companies are trying to replace the relationship sales to demo’s that prove to the customer that their product is the selling point. Sales is simply a system of steps and pitches.
?Of course, these strategies had a much deeper understanding and effort to accomplish our goals. As a CEO, I learned that not everything I thought or tried to accomplish works. I made mistakes, However, I learned to listen to my leadership more, and part of that was a CEO Peer group I joined early on. One of the best decisions I made that provided to me a great sounding board with some of the major decisions I had to make through the years.