If you would google a question: What significant challenges does Logistic’s business face, you would find out that the top third answer is – improving service levels. We have talked about some of the other issues in our previous article. If you missed it, you could read it here.
Improving the quality of services is probably the most critical initiative that every logistics company is trying to achieve. So today we will talk about how to create extraordinary Logistic’s services. Why are extraordinary services so important? Because companies emphasizing services can create a long-term competitive advantage, accelerate the attraction of new customers, and increase the loyalty of existing customers. While this may seem elementary, it is a remarkably complex process. Because to create extraordinary Logistic’s services, you must analyze information about your competitors, create measurable service processes at your organization.
Furthermore, as companies face limited resources, they need to prioritize the changes that bring the most benefits. That is why many companies often find much simpler areas of activity that can be improved. Therefore, the myth still prevails in the logistics industry that differentiating oneself from logistics services is an unnecessary investment (with exclusions of complex services). In most cases, many service-level improvement initiatives are simplified to additional security measures, newer warehouse or transportation mean, or following some minor investments in the service itself. However, companies that want to create genuinely extraordinary Logistic’s services need to see the bigger picture. This article will reveal why it is essential to create extraordinary services and what it takes to stand out from the competition. As this is a complex topic, we will split this into a series of articles to share tips and insights with you soon.
What is the difference between good and extraordinary service?
Before getting into the bushes, let’s firstly identify the definition of extraordinary service. Unfortunately, many do not understand the critical difference between excellent and extraordinary services. To better understand what we are talking about, I will share good and extraordinary service definitions.
Good Logistic’s service – it’s a quality Logistic’s service performed on time. Without breaching the contract, the client perceives these services as another good service quickly found in the market. In other words, this service fit’s into the reasonable price and service ratio definition.
Extraordinary Logistic’s service – it’s a quality Logistic’s service, performed on time and without breaching the contract, and the client perceives this service is tailor-made for him, customer thing’s that there is no better alternative in the market. So, in other words, this service relates to the opinion that I’ve received much more than I paid for.
As you can see, exceptional services are customer-oriented. Moreover, clients using such a service think that there is probably no better option within the same price range, and they are ready to pay more.
Companies need to be seen as a better option than the competition at the most critical customer interaction points to create extraordinary services. And this, of course, it’s not an easy thing to do. First of all, companies need to understand what’s essential for their customers. Benchmark their current situation against the competition. And only then start modeling services to suit your customer’s needs better. So, finally, it would be best if organizations formed their services package in a way to be seen as an unchangeable option.
Many companies are trying to achieve that because this is the key to getting better customers, better margins, and increasing customer’s lifetime value. But, nevertheless, most companies don’t realize a breakthrough in this field, as they can’t do their homework correctly and accurately.
What are the most common challenges in the journey of creating extraordinary services?
As I’ve mentioned earlier most common challenge is that logistics companies look at the service in a narrow way, believing that good service is related to the performance of a particular service. This view overlooks other essential elements of the service that occur at other stages of the customer’s journey. Such as order visibility and timely communication, drivers’ clothing and communication during the service, the level of professionalism of other staff interacting with the customer, and all other kind’s of operations in between. Including loyalty-building processes before and after the service.
The other common challenge is related to copycat activities. Many companies try going the most straightforward way copying the activities of competitors or, even worst, copying the activities of the top companies in a particular niche. But, by doing that, companies achieve precisely the opposite thing, as extraordinary services are related to tailor-made services.
Another typical challenge is related to not doing the homework first. Many companies start implementing services level improvement initiatives or start modeling their services without analyzing what’s is essential for their customers. As a result, companies start to burn their finances on initiatives that don’t deliver.
There are also cases when logistics companies start implementing all service improvement initiatives at once. Then these changes start to stall, or their implementation is suspended under the pretext that; we have more important things to do. Or, instead of actual implementation and the development of a measurable system, imitative actions take place.
I will provide some examples of wrong service creation and positioning examples.
For example, a particular logistics company claims to be a green service provider (an increasingly important element of any kind of Logistic’s service). Still, only 1 percent of the existing fleet is powered by electricity or other less polluting vehicles, and there is no plan for other sustainable process implementation within the organization.
Some companies claim to be digital shipping companies, while their only digital solution is a transport and enterprise resource management system.
Other companies report reaching 99% on-time delivery but do not have measurable processes to confirm this claim.
Some companies claim that the quality of their customer service is the best in the industry. Still, it is impossible to contact the people in charge when an unforeseen situation occurs, and no response is received upon request by e-mail.
We could probably find more stories on this topic, but of course, many logistic companies not only talking the talk but walking the walk.
In the following article, we will share insight on where you need to start building extraordinary Logistic’s services.
If you are planning service improvement initiatives, please talk to us before making changes. We can help you make those changes smoother and save you load’s of money while doing that.
About the author:
Tomas Ananjevas is a supply chain professional with 15 years of experience purchasing and selling Logistic’s services and building a supply chain from scratch. He founded a consulting, training, and staffing company that works exclusively with the logistics industry. Tomas is currently helping logistics companies implement the necessary changes that ensure business growth and continuity. You can arrange a time to talk with tomas by clicking here.
