For most Logistics businesses, the COVID-19 situation was an ultimate disaster. Some have lost revenue, which leads to drastically employee cuts. Other companies oppositely were dealing with unprecedented growth and failing to take all the possibilities provided.
Economists predict that we will have one of the worst recessions of all time. Although it’s essential not to forget that during recessions, funds relocate, creating significant possibilities for businesses and punishing companies that aren’t ready for the change.
History has shown to us that all significant business possibilities are found during recessions, and I believe the same will be valid after this post-COVID recession. Although, companies need to make wise decisions to use them out. Most of the companies are panicking and implementing the budget, employee, overhead cuts. Of course, it’s the best time to make operations leaner, although it’s essential to think about continuity and future growth. And one of the critical departments talking about sales development is marketing.
What is changing in the Logistics sector?
Firstly the cargo balance is changing. Therefore most carriers are unable to find enough cargo supply for their usual operations. Secondly, pricing disbalance, for some modes or lanes, the price has increased enormously, for others decreased significantly. Thirdly changing consumer habits are already changing and will change the face of logistics, which we have known before. Fourthly, and most importantly, there are signs that supply chains will change, moving from China and India to other locations.
For most logistics providers, those changes are overwhelming; companies are trying to save their operations by lowering wages, cutting marketing, sales, and other budget lines, or firing employees. It’s easy to slip and make mistakes during uncertain times. Therefore we are here to help.
In this article, we will provide some peace of advice for logistics service providers, how to deal with the upcoming recessions, and how to model operations to better use out upcoming possibilities through a marketing perspective. We will talk more about marketing strategy and marketing complex reassessment than a simple advertisement and lead generation.
Bellow, you will find five areas within marketing where you need to put your attention to and talk about each of them separately.
Perform a SWOT analysis.
The first thing you need to do is assess the services provided. It would be best if you reassessed your strengths, weaknesses, opportunities, and threats. And by doing this, you need to be crystal clear and truthful with yourself, as lying or hiding can be disastrous. It would be best if you were double sure that your strengths are still valid. If not, you need to Pivot and in search of new possibilities. Furthermore, it would help if you looked at your competition, how they do look, what services do they provide, can you be better, and where.
You need to look at your services provided and ask yourself, are we still required? Will we be required in the near and extended future? If not, what can we do to change this situation?
And if you have clear evidence that your services will be needed, or you still have a competitive advantage, or maybe your competitive advantage has increased, do not delay a moment. Put all your efforts into finding more business opportunities.
On the other hand, if you found out that your business model isn’t relevant anymore, you have two options, close down or pivot. The worst thing is when companies are waiting for some miracle to happen; by doing this, you will only burn funds. I would recommend to pivot and to put all efforts to find more business; believe me, there are always possibilities for new business out there.
The pandemics have mixed the prices. Some are increasing enormously, and others are decreasing. If you are pushed by your customers to reduce the cost, your need to stop and think for a moment, can your company live with the lower price, and is it even worth to hold on to this customer. I know companies that used to work with a negative margin thinking of getting more business afterward. At the moment, it’s okay if your operation is significant, and you can survive the price pressure; otherwise, stop and look for other customers, or think of ways to add more value-added services while keeping the earlier valid price range. And oppositely, if you are having the higher hand know and can increase the price for your clients, again stop and think, maybe it’s an excellent time to show your trustworthiness and reap the fruits later.
Reassess your customer’s segments.
There were a lot of changes in the supply chains recently; some businesses are decreasing in volume or closing they’re operations, other growing. Furthermore, most of the companies are reevaluating they’re supply chains, looking for ways to increase resilience, and it will conclude in changing partners and locations. It means that if your company is struggling to find new business, plenty of opportunities can be found in different areas; you need to look at this from a different angle.
Reassess and improve your marketing spending.
Marketing was never a strong side of most logistics businesses, although the situation has changed, and it’s tough to get customers with cold outreach tactics only. During recessions, companies are starting to cut costs, and the marketing budget line is among the first ones to cut. Although it’s a wrong decision because, as I said, there is a lot of possibilities that are among; furthermore, most companies need to add more sales fast to survive. And it’s not possible to snowball without new marketing and sales strategies. I would recommend you overlook your strategy cut unnecessary cost’s which do not generate any positive results, like brochures, trade shows attendance, TV, or magazine commercials (if you are doing some). And relocate those funds to activities that will generate you fast results: inbound marketing activities, content creation, LinkedIn prospecting, website blog building, etc. And if you haven’t invested in any inbound marketing activities, let’s start doing this immediately, as we all know and feel that cold outreach tactics do not perform as they did earlier.
Reassess your services
Most logistics businesses will face the upcoming recession. And we all know what happens during a downturn, fierce competitive battle kick’s in. And we all know that the competition in the logistics sector (I’m not talking about all segments and all countries) wasn’t easy before the dammed pandemics, but it will increase even more. Superior services and high quality will be crucial; that’s why an honest service assessment is needed. If someone in your company will do the evaluation, there is a big chance that the review will be wrong; we highly advise to order this service from a third party. Doing the assessment, you need to pay attention to quality, promptness, employees’ experience, ability to solve problems fast, choosing the right customers persona’s, and much more.
If you will find out that your services aren’t needed anymore, it’s time to pivot. For instance, your company has provided storage services for a retailer that went bankrupt. Now you need to find new customers to fill the void. There are two options here. First, to acquire new customers from the same profile or look for other possibilities, like adding some e-retailers.
However, companies need to be sure that they will be able to use all those upcoming possibilities. Suppose your company is an operation of 2 people, then it will be hard to find and use out emerging opportunities. Let’s face it it’s sales development is and challenging and time-consuming job, as you need to prospect, qualify leads, perform sales calls, send quotes, and many more. For this to happen, you will need sales development representatives, account managers, and maybe even marketing managers, and of course, salesmanship and marketing knowledge will be required.
Secondly, you need to assess is your personnel able to acquire new markets. Ask yourself do they have the knowledge and skills. In other words, will your employees have the guts to develop new business? It’s not the same as working with old customers, who were growing together with them.
Thirdly, you need to be sure that you will be able to deliver the services for your new market.
If you can provide, but you lack needed personnel, please look for online tools that will help to automate your sales process (email, prospect gathering, other process automation tools). Or you can hire a third party, which will do this cheaper than you can do this in-house
Thank you for reading. Hopefully, this was useful, and hopefully, you understood the main message that this situation isn’t as bad as it looks, and there will be a lot of possibilities. Of course, now it’s vital to make your operations as lean as possible, and not to forget the growth possibilities. Remember, if your company isn’t growing, it’s decreasing already.