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To counter the potentially commoditizing effects of digitalisation, forwarders need to move the focus from price to value – the benefit the customer receives.

The shipping industry is undergoing an evolution as it moves inexorably to a technology-centric approach, with the advent of groundbreaking technologies like AI and Blockchain.

Digital freight forwarders are deploying their proprietary technology solutions, in a differentiated offer for shippers, providing a fast, simple and effective experience of shipping that they are marketing aggressively. And while it may be fair to say that traditional freight forwarders have been slow to adopt the customer-facing technologies that would counter these new market entrants, it would be wrong to suggest that forwarders lack innovation.

Forwarders work tirelessly to support shippers and deliver a lot of value to the customers they serve. Yet, without taking effective action to highlight that value, the impact of new market entrants and technological changes will continue to erode confidence in the whole sector.

With a limited service, the digital players focus on price, may accelerate the effects of commoditisation, undermining long-term market stability. It is possible to counter the impact of commoditisation by moving focus from price to value, and there are a number of tactics that forwarders can deploy to demonstrate the value they add.

The first issue is to make sure their people understand that value and price are not the same, because too often we allow customers to think of them as the same thing. When price is the only thing the customer is focused upon, everyone loses.

Value is far more than price. It’s the benefit the customer receives, and everyone on your team needs to start thinking about value. It’s about moving the focus away from basic service elements to more considered elements like routing, planning, and additional services.

So what matters isn’t merely the freight cost, but the outcome that is accomplished.

– Does delivering directly to the customer save handling costs at their DC?

– Has your loading method simplified handling and consequently cut cost?

– Does your efficiency increase their customers’ satisfaction?

It’s outcomes like this that will differentiate you. Talking to your customers will be invaluable in highlighting the things they really value. You can filter this feedback into your communications.

Undertaking quantitative customer research allows you to use benchmark indicators that provide evidence of the service value levels delivered in areas like service, efficiency, and reliability. Once started, you can track trends, enhancements and performance against targets. All this measurement adds more credibility to the data.

Whatever happens in the added-value debate, a lack of customer satisfaction is a sure-fire way to lose them, so be totally and utterly fixated on continuous improvement. Soliciting honest feedback through F2F (face to face) and remote surveys will keep your finger on the pulse of your customers’ needs and monitor your progress in the market.

There are plenty of free online survey tools that offer easy-to-use templates and reporting.

Forwarders that provide positive customer experiences are more likely to benefit from repeat purchase, referrals, positive reviews, and better retention rates.

Consider all touch points, from quote to service reviews, and how the experience can be enhanced for the customer throughout the process.

Building a customer experience helps develop relationships, so that you can connect on more senior levels that don’t follow simply getting the sale. Memorable customer experience adds further intangible value, with personalised service, attention to detail, and showing a sense of urgency by addressing issues as they arise.

Expertise is added-value too. However, in order for you to provide value, you need to provide a level of advice that is significantly higher, more sophisticated, and a lot more valuable than that of your competition. What this means is a higher level of knowledge, wisdom and understanding about what it is that you do.

Consider chartered membership of the CILT to showcase your knowledge and expertise. (Joining the freight forwarding forum’s a good benchmark too!)

It’s not easy to get customers to open up about the value of the service they receive. But keep pushing and you will get feedback you can use for testimonials, case studies and trade awards.

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