When it comes to freight, we've been trained to believe that price is king. But what if I told you that the game has changed?
When it comes to freight, we’ve been trained to believe that price is king. But what if I told you that the game has changed? The 2024 TMSA Marketing & Sales Metrics Study just dropped a bombshell that’s upending what we thought we knew about customer retention in our industry. Forget what you’ve heard – understanding and meeting evolving customer needs is now more critical than ever for keeping business in the logistics world. And if you’re not paying attention, you might just find yourself left in the dust.
2022: Price drove 48% of lost business
2024: Inability to grow with customer needs (45%) and meet comprehensive needs (41%) now top reasons
The logistics landscape has undergone a seismic shift. In 2022, price was king, driving 48% of lost business. Fast forward to 2024, and the game has changed dramatically. Now, the inability to grow with customer needs (45%) and meet comprehensive needs (41%) reign supreme. This isn’t just a change in numbers – it’s a fundamental shift in how shippers view us. We’re no longer just a commodity; we’re problem-solving partners. And it couldn’t come at a more critical time. With port strikes, economic pressures, and constant change battering our industry, customers need more than a service provider. They’re looking for adaptable, growth-oriented partners. In this environment, inflexibility isn’t just a weakness – it’s a death sentence for logistics companies.
Why It Matters
Logistics companies now seen as problem-solving partners, not just service providers
Inflexibility in meeting evolving needs = loss of future revenue and network influence
The cost of not understanding our customers’ needs goes way beyond losing a single contract. When we fail to meet our customers’ evolving needs, we’re not just losing a transaction – we’re hemorrhaging future revenue. In an industry where word-of-mouth can make or break us, a lost customer doesn’t just walk away – they take their network and influence with them.
So, how do we get better at understanding what our customers really need? Here are a few strategies to consider:
1. Encourage cross-functional collaboration. Your sales team, customer service reps, and operations folks all have unique insights into customer needs, and they’d love to be listened to. Start by setting up regular cross-departmental meetings focused solely on customer insights. Create a shared digital space where team members can log customer feedback and observations. The goal is to break down silos and create a holistic view of your customers’ needs.
2. Implement formal customer experience reviews. The TMSA study showed that only 39% of organizations have a formal process for this. If you’re in the other 61%, it’s time to step up your game. However, proceed with caution here. Once you send out a survey, people expect change – so if you’re not serious about acting on the feedback, don’t do it. Start by designing a comprehensive survey that covers all aspects of the customer experience. Before launching, ensure you have a clear plan for how you’ll analyze and act on the results.
3. While formal reviews are valuable, don’t underestimate the power of informal customer feedback gathering. Trade shows, expos, quarterly business meetings, and client appreciation events are gold mines for candid feedback. Take your clients out for coffee or lunch – you’d be amazed at what you can learn in a more relaxed setting. Make it a habit to really listen during these interactions, not just wait for your turn to speak.
4. Crucially, make sure all this valuable feedback doesn’t go to waste. Log customer insights in your CRM in a way that can be easily mined later. Create specific fields for feedback type, source, and potential action items. Regularly review and analyze this data to spot trends and inform your strategy.
5. Leverage data analytics and AI for predictive insights (or even just for identifying themes in your open-ended survey data or CRM intelligence). The future of logistics is data-driven. Look into AI-powered analytics tools that can help you spot trends and predict future needs. Start small with a pilot program focused on a specific customer segment or service area. As you gain insights, gradually expand your data analytics efforts across the organization.
With the influx and wide adoption of digital tools in all facets of the supply chain, customer expectations are evolving rapidly. This digital transformation presents both challenges and opportunities. While larger companies may have more resources to invest in cutting-edge technologies, smaller logistics providers can leverage their agility and customer-centric approach to compete effectively. By focusing on understanding and meeting specific customer needs, smaller companies can create tailored solutions that larger, more rigid organizations might struggle to match. Remember, in the age of digital disruption, it’s not always the biggest player that wins – it’s the one that best understands and adapts to customer needs. And when we truly understand our customers, we’re not just retaining business – we’re creating advocates.
The Bottom Line
Understanding and meeting evolving customer needs is crucial for retention in 2024 and beyond. It’s no longer just about moving goods – it’s about creating adaptable, growth-oriented partnerships.
Are you ready to make a shift? Your customers are waiting.
Thank you for reading, I hope you learned something! But come on, I didn’t just write this article to flex my logistics knowledge muscles (though they are impressive, if I do say so myself). This is my wheelhouse, friends! If you’re ready to stop just moving boxes and start moving the needle on customer retention, here are some ideas of how I can help:
• Creating and implementing a comprehensive Voice of Customer program
• Facilitating cross-functional collaboration with an objective, external perspective
• Designing, deploying, and analyzing customer feedback studies, including action planning
• Managing change around CRM integration for effective Voice of Customer capture
• Crafting customer-centric communication strategies across all touchpoints
• Training teams on effective customer listening and insight gathering techniques
• Auditing and optimizing existing customer feedback processes for maximum impact
