On Second Thought
with Tom Nightingale
I’ve been writing this column for over two years now and I have resisted the temptation. I have fought against the natural draw for me to reflect on the state of sales and marketing across our industry and why such an operationally driven industry should care. I’ve written about everything from the Panama Canal to Steve Jobs. Yet, I have consistently avoided the elephant in the room.
The great management scholar Peter F. Drucker wisely stated, “The purpose of business is to create and keep a customer.” There are two equally important sides to that statement. In our industry, operations have always played the primary role in “keep.” If it were not for the flawless execution of the operations teams across our industry, customers would certainly and quickly be lost. The expectations set through the commercial organizations of sales, marketing and pricing would not be fulfilled and the customer would be gone faster than you could say, “Panama Canal.” I fully acknowledge the critical role that operations plays in navigating the perilous waters of keeping customers. It’s hard, often thankless work.
However, our industry often seems to forget the criticality of the first part of the statement — “create.” Creating a customer takes an ever-increasing complex set of skills in an exceptionally competitive and changing environment. There was a time when creating a customer might have required nothing more than doughnuts, a bottle of Scotch, or a three-martini-lunch. However, those days are gone forever. This discussion will focus on the four core areas of commercial operations: marketing, sales operations, pricing and sales; and reflect on how much their worlds have changed.
Today, creating a customer requires more than just close collaboration between sales and operations. It requires a tightly integrated commercial effort and close collaboration with operations. Let’s start with marketing. Marketing used to just be about putting pictures of trucks or planes in industry magazines and showing up at trade shows. Now it takes much more to cut through the clutter and lay the groundwork for sales. Today, brands, social media, media relations, the Web, segmentation, and targeting — all of that matters. And, your marketing department needs to know how to do all of these if they wish to rise above the message saturation that has invaded the day-to-day workplace. There is probably no single area of the industry that has changed more dramatically and quickly than marketing has in the past decade. None of the traditional mediums have disappeared (everyone still values publications, such as American Shipper
), yet our targets now get information from a wider variety of sources, including LinkedIn, blogs, news feeds, tablets, and they get it 24 hours a day, seven days a week.
In the past, sales operations fielded a few inbound calls, routed the occasional unsolicited request for proposal and worked hard generating a few reports. Now, sales operations plays a critical role in ensuring that sales — one of the company’s most expensive resources — stays productive and focused. Advances in CRM (customer relationship management), SFA (sales force automation), lead-nurturing technology and MRM (marketing resource management) keep sales more productive than ever. And, in organizations where sales operations are responsible for proposals and contract administration, the bar has never been higher with customers and competitors setting expectations far beyond traditional rate cards. Bids are often evaluated by professional procurement departments and bid tools, both of which are unforgiving and could care less how long a carrier has provided the company with reliable service.
Pricing has evolved dramatically from the days of tariffs and straight percentage discounts. Now, pricing professionals are the single greatest profitability lever. Knowing the market price and ensuring the company does not leave any money on the table is a balancing act that now requires a sophisticated tool set to sense market prices, produce sophisticated contoured pricing, and appropriate accessorials. Concepts such as vested outsourcing, value-based pricing and market-based pricing have gone far past the theoretical and are being used by providers across the spectrum. Pricing must be versed in all of the emerging techniques and should be leading their organizations toward the most appropriate methods for their businesses.
That brings us to sales. While one might think that the world’s second oldest profession has not changed much, the reality is that it has changed dramatically. Advances in selling techniques, such as SPIN Selling, Miller Heiman’s Strategic Selling, PSS (Professional Selling Skills), Action Selling System, and Black Belt Selling to name a few, have better equipped sales professionals in a variety of selling environments. These are the bedrock upon which an explosion of product offerings have been built and now require salespeople to sell a broader set of solutions than in the past. And, what happened to the days when you had no idea where the sales team was? With advances in CRM and productivity tracking, salespeople have never been more accountable and expected to hit higher levels of productivity and deliver higher quotas.
In summary, while operations’ job has not gotten any easier and is absolutely still essential to “keep” the customer, the commercial team’s task to “create” the customer has evolved dramatically. Not every commercial organization has kept up with this change. Just look around. Those who have made the change are probably the ones growing the fastest in your markets. The goal line moves further away every day and your organization should be tooling itself to reach it. Most companies in our industry seem to want to ignore the elephant in the room that commercial teams deserve investment and an equal seat at the table.
Nightingale has held top commercial roles at some of the industry’s leading companies across transportation, logistics and supply chain management. He can be reached by email.