3PLs / LOGISTICS SERVICE PROVIDERS - Business Development
Business development is used to create new sales. Whether it is done as a subset of the corporate strategy execution for greater market penetration or new markets or whether it is a granular effort, business development is important.
Many firms address of business development with cold calling, email blasts, advertising or social networking. Each of these tools misses a key point, beginning with the lack of focus and structure. The risk is using essentially standalone sales efforts instead of crafted business development. This methodology limits the effectiveness—and results. That is central to their shortcomings.
There are three parts to a solid business development program. They are inter-related and should be integrated for a cohesive approach. The three are—
- Unique Selling Proposition
- Positioning Strategy
- Market Positioning
Unique Selling Proposition. Generally speaking, logistics services are viewed as a commodity service. That means price is a key differentiator for customers on selecting which provider to use. To counter this and to gain recognition for the company, an important need is to have a Unique Selling Proposition (USP). The USP is not about what the 3PL or logistics service provider does. It is about what customers want. Underlying the proposition is a customer centricity. Customer focus is fundamental to business development.
The Unique Selling Proposition is the Value Proposition. Its need increases when the company has missed sales opportunities and customer retention problems. Too many service providers send much time talking about themselves. In the end, such a narrow focus leads the ongoing price pressure continuum, lost sales and higher-than-needed customer turnover.
The key here, and with the positioning, is to separate the LSP from its competition. It is not about comparisons with competitors. There is competition for customers of logistics/supply chain services to choose among. This is about more than having similar or different capabilities. This is about defining the provider is based on what customers want.
What makes a selling proposition unique is its customer focus. A successful selling proposition is not a slogan. It is about the customers. It is a value proposition for customers, why they should use you. That is important to the accomplishment of sustainable success of growing and expanding.
To develop the USP, the 3PL should—
- Seek to define a competitive advantage;
- Adopt a customer focus (investor centricity approach) to gain the attention of potential customers;
- Target an expanded audience of potential customers;
- Evaluate developing multiple USPs to reach different target customers, markets and service possibilities because using only one USP may limit attaining opportunities;
- Recognize customer needs as compared to the LSP offers;
- Position with regards to competitors;
The USP should answer the question of “Why should I select you for my supply chain needs”? Arranging transport or storing and handling goods is not enough for a USP. It should identify what the 3PL provides and meets customer needs. The latter creates a value proposition for customers and builds customer centricity.
The Unique Selling Proposition should—
Positioning Strategy. The firm needs to identify the best positioning strategy for it and what needs to be done to achieve this goal.
- Reflect needs of customers;
- Differentiate the 3PL from the competition;
- Define why customers should consider/select the company;
- Create value for potential customers;
- Segment for different markets, customers or logistics opportunities;
- Open new customer needs.
There are layers to the Positioning Strategy, including—
- How to design the strategy;
- Who to target with it;
- What to target;
- How to execute it;
- How to present it;
- Where to present it;
- How to design the strategy for multiple media and outlet venues.
The intent is to position to a large audience. Let potential buyers of the service know the 3PL is there and what it does. Create awareness. Make it so people find the firm in their searches. This contrasts with the firm searching for customers.
Underlying the above points is the question of whether the positioning should be monolithic with one message and approach for all prospective customers in the target customer sets or whether it should be segmented. One message is limiting and closes off opportunities. It should it be segmented and should be tailored to different customers and/or to different markets.
Designing a well-targeted investment promotion and marketing strategy is critical to the success. Understanding the competitive landscape, its differentiators, its unique value proposition, and its constraints is crucial in designing an effective positioning strategy.
Key points are—
- Segment the positioning strategy and target it for different market sectors and/or customers. Do not use a monolithic, one-size-fits-all approach. Positioning will be customer centric and targeted to potential customers and markets;
- Consider potential niche opportunities.
- Try to trigger new customer needs as “outside the box” thinking with additional services or approaches. Provide customers with workable concepts that you will work together with for their success.
The benefits of this approach will be a winning strategy that—
Market Positioning. This, tied with the Unique Selling Proposition, creates a branding for company. It is about having potential customers see the 3PLas the solution for their supply chain needs. It presents credibility for customers.
- makes best use of resources;
- is customer centric;
- is investor centric;
- is sustainable.
The marketing should have nationwide, even global reach, recognizing that potential customers are located throughout the U.S. This is very important. There is a large base of potential users of the 3PL’s services. It should also be a multi-media approach, ranging from traditional print to the internet. The internet efforts may include a revised website with the new branding and USP, with search engine optimization of key words for enhanced search rankings.
There should be different well-crafted, customer-focused messages and content to match different customers, markets, services and niche opportunities.
Conclusion. Business development is defining and positioning your service to customers. It is customer centric with a value proposition that is focused on customer needs. It is not about what the service provider does. It is not about comparisions with competitors. It is about clearly differentiating from the competition to create customer interest in you and how you will help them.
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