obtaining new, direct customers

[Salma]

Just wondering what the varying opinions are on how new, direct customers are generated. I have talked to many carriers and brokers who find cold-calling (even though very time consuming) has worked for them, others go reference to reference, others (unfortunately) back-solicit, etc..

What has worked for your company? What hasn't?

 

[Pablo]

I'm glad you asked

Salma,

I'm glad you asked. The amount of work it takes to find a new customer is often under appreciated by carriers. I am a broker and we spend most of our resources securing new business.

We call, call, call, call, call!!!!! As a matter of fact we call 100 new prospects for every new customer. We've been tracking this for years and it is pretty constant. Out of those 100 maybe 25 will give you the time of day. Twenty of the 25 are just jerking your chain. The remaining 5 are serious and one out of the 5 you can come to some sort of deal on pricing/service.

The answer is if you want 10 new customers you have to call 1000 prospects.

A sales rep can make about 20 prospecting calls per day (actual talk tos) so that's about 1 new customer per week per sales rep. Do the math!!!! Let's say a sales rep costs $40,000 plus payroll taxes and benefits = $50,000. They take minimum 2 weeks vacation so each new customer costs $1000.

Each customer has to move at least 10 loads with you just to break even on the cost to aquire them!!!! This is why brokers get so upset when there is a service failure. If they lose the customer all that investment has no payback.

Salma, the short answer is it's a lot of hard work. There is no easy way to get new customers. Some may argue, just lower the rates... however, a customer that switches to you to save $20 on a load will switch to someone else to $5 on a load. You're always chasing your tail and you won't make any profit.

Customers who switch to you because you solve a problem for them stay with you, regardless of what other rates people are offering. That's my advice. If more reps took this approach, the pricing in the industry would be much more reasonable.

Weigh your options, you can spend $1000 to obtain a new customer or you can outsource it to a broker to do it for you. That's what we do! Just wanted to give you another perspective on this.

 

[Salma]

obtaining new customers

Thanks, Pablo, for such a detailed answer!

 

[TRUCKIT]

Great answer Pablo,

I am a carrier and we understand the critical role a reputable broker plays. I have no desire or the resources to manage a team of sales people that may or may not produce. The 10-20 points you make must be considered by the carrier for the very reasons you point out. We value the relationship equally with our broker and direct clients, in fact we find it is usually preferable to deal with a broker that understands the challenges carriers experience. My experience (30+ years) has taught me that a solid relationship with a reputable broker will pay substanially more dividends than dealing with a single direct client. Good brokers usually have more savy than carriers and can play a valuable role in your success as a carrier.

Keep up the good work!!!

 

[Pablo]

Thanks!

Thanks Truckit! I rarely hear your perspective from the trucking side of things. You made my day today.

 

[Wiley One]

So what you are saying is that you can't deal with customers so let the load broker do it. Good brokers yes, but they are few and far between. I would far rather deal with the customer direct. Too many cooks spoil the soup and without the broker there would be more money to make a better soup. Less brokers more customers for carriers direct. It would be easier to get customers instead of competing with the many many brokers that are out there. Don't get me wrong there are a few good ones but the ratio is not that good. JMO.

 

[TRUCKIT]

No! I am not saying I can't deal with direct clients, I have several. What I am saying is that to secure solid relationships with direct clients comes with a substantial cost, not to mention time to nurture the relationship. My core competency is trucking, like most carrier owners I come from behind the wheel. I have excelled at customer service but I have limitations when it comes to dealing with direct clients that are of any value. e,g, fortune 500 companies. A brokers core competency is sales and marketing and they usually far exceed a carriers ability to close deals as this is their core competency. My perspective may not work for everyone. All I have to back-up my words is 20+ years as a carrier and I'm still here and going strong. I have never had a broker put a gun to my head and say you MUST haul my freight. It is always by our choice.

Let's not forget first and foremost that in general we are in business. There are alot of carriers who have no business being in business. Our company does not lose sight of this and we try hard to seperate ourselves from carriers that focus primarily on rates and what works only for them.

I do agree that good brokers are getting harder and harder to find but they are out there. I do not worry about things I can not control like the easy entry for basement brokers! I do worry about things I can control like making my company better.

 

[Activet]

obtaining new, direct cutsomers

Just wondering what the varying opinions are on how new, direct customers are generated. I have talked to many carriers and brokers who find cold-calling (even though very time consuming) has worked for them, others go reference to reference, others (unfortunately) back-solicit, etc..

What has worked for your company? What hasn't?

I have tried cold calls. I agree it's time consuming with very low positive response rate. It does require a professional approach, a very accurate sense of empathy, a very good working knowledge of the transportation industry and the prospect's industry, and a very thick skin. Most sales people that call me miss he opportunity to make a sale to me with the very first thing out of their mouth. They neglect to even ask me if I have the time to discuss this matter with them at the moment, or are hesitant to quickly say what they want - my business. I don't have the patience for someone who is being coy with me because they are too embarrassed, or lack the nerve to come right out and declare their intentions.

I have thought about hiring a commissioned sales person, but this requires knowledge of the principles sales management in order to get a worthwhile result. Sales after all, is a numbers game, and you have to know how to interpret the same. Also, before you hire a sales person, you have to know how much business your working capital will allow you to handle without over-reaching and jeopardizing you own cash flow. There's little point in hiring a cracker-jack salesperson whom you may have to put the brakes on because your working capital can't handle the volume of business they may generate. Also, what are the tools you are giving them besides low rates.

What works for me is references from our existing customers. And I don't hesitate to ask for them, and they are more than happy to recommend us if the opportunity arises.

 

[Salma]

Thanks, Activet, for your perspective!
I believe that good references are EXTREMELY important - especially with so many bad and scamming brokers and carriers around these days...
A good reference is priceless!

 

[Freight Broker]

Cold calling is I find the best way to find new business. However, too much emphasis on "filling the funnel" as sales reps sometimes call it will lead to alot of marginal business with you chasing after your money and your carriers chasing after you for payment. To avoid that scenario it really pays to make sure you don't just find customers...you want GOOD QUALITY customers who pay fair rates and pay their bills within 30 days. You're way better off with no freight than the other kind of account..i.e. those shippers who beat their suppliers up on price and then drag their feet on payments.

 

[JUST ME]

Hands down it still comes to YOUR OWN " REPUTATION"
This is the reason we post here to express our concerns and thoughts
As most have already noticed we'll weed the bad ones out 1 at a time !!!!

 

[irish0176]

As a broker I find cold calls is part of sales but not the only way. I find that marketing your company through trade shows, investigating companies on the net, reference from current clients and not restricting yourself to a radius of your office are equally as important.

I believe a quality fair broker has their place for different customers because we can fill different needs of size of shipment, modes to shipment with, and areas of coverage. In today's times of ever changing company needs those can be important qualities.

This is a great site to voice opinions

Thanks

 

[allinone]

Sales.

I've been involved on both ends of the spectrum, and I don't think it really differs from side to side. While we, the brokers, offer the One Stop Shop Convenience, Carriers offer the less hands in the pot which means less potential of screw ups and accountability.

Selling is always going to consist of very many different manouvers to get customers. You can't have sales people with Tunnel Vision looking only to land the big one, and throw back all the small to medium fish. Those are going to feed you while you wait for the big ones to really latch on. I would also suggest having a mix of sales types working for you if you can, corporate and go getters that knock on doors all day(could use 1 or 2 of these now, PM me).

What we are seeing now from a good amount of "Customers" is the price being slashed over and over and over. There seems to be no loyalty out there anymore between carriers and brokers and it's hurting everyone on each end. Until we can get the rates up to where they need to be again, there will always be tensions and basement carriers and brokers in the mix.

 

[Jim L]

Good Brokers

One thing that really frustrates me with freight brokers is that they often call me for a quote on a lane. "I have 30 loads going to someplace". After I give them a detailed quote, I hear nothing from them. Two weeks later I follow up and call them for an update and they say "I haven't heard anything".

If the freight broker relationship is really to do sales, why are they not following up on the quotes they give? Why do they just let the lead die? This is the worst thing a salesperson can do?

I really hate brokers that just push numbers - take the number from the carrier and mark it up and give it to the shipper. To me they are not salespeople, just another person looking for a quick buck.

I put all these brokers on a list and when their name comes up, I up my rate to them.

 

[MyTrucksMyRates]

One thing that really frustrates me with freight brokers is that they often call me for a quote on a lane. "I have 30 loads going to someplace". After I give them a detailed quote, I hear nothing from them. Two weeks later I follow up and call them for an update and they say "I haven't heard anything".

Why did you take 2 weeks to follow up in the first place? Follow up is a crucial part of the quoting process. If you are not prepared or organized enough to follow up the next day or at the very most 2-3 days after your quote, then don't even bother going through the detailed quoting process in the first place. The line "I haven't heard anything" is either a brush off to you, or your broker hasn't bothered to follow up for the last 2 weeks either. When submitting detailed quotes ask the question "When is a good time to follow up with you?"

If the freight broker relationship is really to do sales, why are they not following up on the quotes they give? Why do they just let the lead die? This is the worst thing a salesperson can do?

Because sometimes the lead may not be as important to the broker as it is to you the carrier. That's where it is your responsibility to follow up and keep them focussed on the freight you quoted, the freight you want.

I put all these brokers on a list and when their name comes up, I up my rate to them.

Maybe that's why they tell you they haven't heard anything.

 

[Jim L]

You're absolutely right on these posts. I have tried 2-3 days later. I have tried 1-2 weeks later. Still the same result. Most brokers do the same thing - give out thousands of quotes and hope someone might call back. Like you said, the lead is not as important to them as it is to me. I have tried to be persistent but found that some people just say "when I hear something you'll be the first person I call" - I put that as a screw off and leave me alone because I have other numbers that I have to mark up and send off in an email.

The brokers who continue to do this belong on a list and deserve not to get accurate quotes and wonder why they cannot get freight.

Just venting - Happy New Year!

 

[thefriendlybroker]

it's great to see brokers and carriers seeing eye to eye and talking about this stuff. As a broker, 15 yr sales person and someone who as worked on the trucking side of things... its rare to see hear these type of opinions.

For truckers, their core business is trucking, especially for the smaller companies, which is were a good broker which pay their bills can be extremely useful in helping them build their business.

Bringing on a sales person is a big cost and involves alot more than most people can fathom. Sales people in general are not very reliable unless there is something in for them. Paying them a large salary is throwing money away. Commission structures are the only way to get results and in this industry, there is a lot more to sales than just selling a product.

Sales people in trucking need to understand the industry and that involves them doing a little dispatch or "hands on" work to get a feel for what it is about. Only then can they even begin to accurately quote and generate good profitable business.

I use a bonus/ commission and base salary structure which lets the salesperson see that the more they do, the more they can make on multiple levels which in turn is always leaving them wanting more. I also limit commissions to time frames... ie 20 % on first 6 months, and 5 % after. This way, the sales people don't sit back after they've got the accounts and do nothing. It forces them to go out day after day and keep generating, but at the same time, they are still getting commission from old sales.

On a final note.... I often have to post on link to get a quote. I get usually 4 -5 people call, but more often its so I can see which carriers run that lane and call them. Unfortunately, only 1 or 2 carriers can ever get the business and there is often a very large difference in the rates I get. Funny thing being, the carrier that quote me the highest often drop their rate in the long run a fair margin to get the business. Because of this, it gives the impression the broker is only looking for the lowest rate. Its not always the case.... A lot of times, we gather several quotes and work out a medium price which going by the rates we have received, seems to be fair to the carriers. When we don't call a carrier back, sometimes it is because we haven't closed the deal ( could be they are on vacation, they haven't made a decision.. there are multiple reasons ) and yes, sometimes its because you quoted way too high and we found 7 carriers doing it for 10 % cheaper.

This is a two way street.... you quote us high and then drop rate a week later by 10 - 15% to get the load, we wonder if your even trying to give us a fair quote and we most likely won't use you as it seems
"shady". I've had carriers quote me and 4 months later, I got the business and called them back and gave them the freight.

Everything in this industry, especially now is every changing... like a sales person making 100 calls to get 1 client.... carriers need to realise they could give a 100 quotes to get the 1 load.... but if that load goes good, often a relationship with the broker is formed and there are multiple other loads they are going to get !...