Your brokerage firm uses many different ways to build business relationships with your customers. Your activities may range from phone calls, emails, and newsletters to in-person meetings, special events, and Christmas cards.
Still all customers are not created equal — and that means your customer relationship activities shouldn’t be equal either.
But how do you organize your “touches” in a systematic way that ensures you contact the right customer at the right time in the right way — and can track the results?
Jimmy DeMatteis of Des Moines Truck Brokers presented a unique system at Transportation Intermediaries Association 2013 in Las Vegas.
Des Moines Truck Brokers starts by dividing prospects and customers into four groups using a simple matrix.
As Figure 1 shows, the x axis on the matrix is Attractiveness, which ranges from Awful to Amazing. The y axis is Penetration, which ranges from Prospect to Partner.
I think of the x axis as the Cost of Sales, which includes the time, money, and effort to sell to a particular prospect or customer. Easy customers are super-attractive; difficult customers may make you a lot of money but cause you a lot of headaches.
My y axis is Revenues/Profitability, which tells you how much business a customer gives your brokerage and how much you earn from that business.
In the upper right quadrant in Figure 1 are the high-revenue, low-maintenance Cash Cow customers. The Des Moines’ team wants to nurture these relationships.
In the lower left quadrant are the low-revenue, high-maintenance Dirty Dogs. The team spends almost no time or effort on these relationships.
In the upper left are the high-revenue but high-maintenance Cruise Control. The Des Moines team simply maintains these relationships.
And in the lower right are the low-maintenance but low-revenue Rising Stars. The ultimate goal is to concentrate efforts and resources efficiently to develop the relationships with this group and move them into the Cash Cow quadrant.
So how do you know which of your customers or prospects falls into which group? You score them.
The scoring criteria for Cost of Sales include characteristics that are externally observable, such as payment speed, rate structure, geographic desirability, bid frequency, and claim rate. Other characteristics you may want to include are loyalty to your business and number of miles or drops.
The scoring criteria for Revenue/Profit include percent of the customer’s business your brokerage commands and the margin level you’re able to average from their shipments.
Of course, you’ll want to develop your own criteria, based on your business priorities and goals.
Click here to download a printable version of this chart for you to use.
Once you’ve created your relationship matrix, you need to develop a checklist of activity types for customers in each quadrant based on their importance to your business.
For example, Des Moines’ Rising Stars get two performance assessment meetings each year, while Cash Cows get one and the other groups get none.
To keep track of who’s been contacted and how, brokerages can plug all the activity information into a Customer Relationship Management system. Keypoint recently introduced a full-featured CRM that integrates directly into the Keypoint Logistics Transportation Management Software.
It’s the best way to ensure the activities get done and measured — and generate the kind of business you want.
For more information, contact Steve Blair at:[email protected]