Name an area of logistics that directly impacts the profit margin, productivity and the morale of your sales and account management teams. If you said solution design, you’re on the right track.
Solution design is what sets the logistics industry apart from virtually every other industry. When you think about it, what other industry has the same amount of complexity throughout the entire business cycle, followed by such a precarious handoff between sales and operations? It has a ton of moving parts:
- International language, currency, regulatory and cultural considerations
- Collaboration and project management spanning clients, asset-based vendors, and 3PLs
- An incredible amount of data created and exchanged during the process
Solution design can make or break a single deal, your P&L for a quarter, or your company’s future. Those who embrace data, collaboration, and innovation in their solution-design process will reap the rewards of enhanced customer service, profitability, and long-term results.
Let’s break down how solution design comes to be, and how the sum of its parts leads to success.
The Role of Business Development in Solution Design
Effective solution design involves translating what the salesperson discovers in the client meetings into something that can be implemented successfully and profitably. It sounds simple, but more often than not, a critical component gets missed and the customer ends up with something that does not match what they wanted, which affects customer satisfaction…and impacts future sales or causes a customer to churn. Alternatively, the implemented solution or “finished product” doesn’t match what the salesperson or finance function thought they were selling, which affects margin.
So why does this happen?
Sometimes, the customer can’t articulate their requirements. Maybe the customer or the account teams didn’t have the data they needed during the discovery meetings. Perhaps, it was a set of requirements that was evolving so quickly that it wasn’t possible to nail it down at the time. Or, there was a failure to communicate the data to all the parties involved in the deal. And if you’ve worked in logistics, you KNOW how many people are involved.
It’s easy to connect the dots. You either end up with an unhappy customer, a less-than-profitable project, or worse — both.
It’s absolutely critical to align the solution design process to the sales process from the start; the two workflows are intertwined and they must share a common system of truth. You can’t have sales or the client working off its own set of customer requirements and documents, and solutions and operations or finance working from another. They must have a shared understanding of what success looks like…and a shared library of customer documentation.
The Role of Technology and CRM in Solution Design
Nobody ever said, “I love updating contact info and communications with the customer in my CRM.”
It’s a tedious task, that’s why. More accurately, it’s because the time spent in the CRM doesn’t translate to value for the person using it! The traditional one-size-fits-all CRM or “Salesforce right out of the box” is great for basic things:
- Storing customer contact info
- Reminding you when to call people back
- Recording sales activities
Traditional one-size-fits-all CRMs don’t capture what your customer really needs; they can’t translate those needs into a solution design that can be priced appropriately, while looping in all the people necessary to satisfy the complex deployments within the logistics industry.
As an industry, we often talk about collaboration and I believe it is a core tenet of logistics. When you look at the parties involved, you can see why:
- 3PLs, including pricing, sales, legal, contracts, account management, procurement, operations, finance, executive leadership
- Carriers including sales, pricing, legal, operations, and billing
All of these constituents play important roles and need to provide input to ensure a proper, profitable deal that exceeds customer expectations. Hence, the need for collaboration on a logistics scale. The kicker is this type of collaboration isn’t exactly natural. Most of these people don’t have systems in place to enable collaboration with others involved in the deal; some don’t even systems that support their own operational workflows.
If you can find a way to make this type of collaboration easier through the use of technology, the costs, processes and workflows will be more transparent and efficient, leading to better deals for both the customer and the logistics service provider.
But don’t expect collaboration to come naturally, especially to competitive, deal-driven logistics salespeople. It takes cultural change and tremendous support from the top down to emphasize the importance of win/win relationships and safeguard against losing deals after the sales team has won the contract.
Losing After You’ve Won
This happens when a deal falls apart after implementation because the solution design didn’t match customer expectations. The salespeople have let the customer down through little fault of their own; the trust and what could have been a long, profitable relationship for both parties are gone. This is the worst-case scenario…and it happens all too often.
Customer expectations are what count at the end of the day, but maintaining a motivated and engaged sales team is also important. A salesperson’s worst nightmare is not losing a deal —it’s losing a customer after the deal has been won because the implementation or ongoing execution has failed.
Effective solution design is the point of differentiation for logistics service providers — not only in the consumer-facing sense, but also in terms of profitability and internal processes.
To learn more about how technology can complement solution design processes for organizations both large or small, contact us for a demo of our logistics app.
ABOUT TOM NIGHTINGALE
Tom Nightingale, a member of the Lanetix Board of Advisors, is the President and CEO of International Package Shipping and Polonez Parcel Service. He was the President of GENCO Transportation Logistics, the leader in delivering product lifecycle logistics® solutions which was acquired by FedEx in February 2015. Prior to heading up transportation logistics at GENCO, Tom spent many years in sales and marketing, including 5 years as CMO of Con-way Inc. (bought by XPO Logistics for $3 billion in 2015), one of the largest transportation providers in the world.