The last two years were super good for most logistics service providers. Of course, some regions suffered, but generally, the market was excellent. Many logistics companies made record profits. Many felt like superheroes, the Neos of this world, who made their companies thrive. And some of them were heroes; I’m talking about those companies that grew faster than their competitors. But we all know that most just used out the perfect storm. When the conditions were excellent, most logistics services providers forgot about new business development. No sales strategy is needed when capacity is scarce, as then shippers are looking for LSPs, not otherwise. But we know this is not true. Proactive logistics companies never forget new business development.
Talking with LSPs and reading logistics news, I’ve started hearing some sounds of panic. Ocean carriers suddenly announce that freight forwarders are welcome, while a few months before, they threatened to eliminate them. Transportation companies, freight forwarders, and expeditors are starting to hear from shippers that the future is uncertain, and they can’t say for sure what capacity they will need. When only a few months ago, they booked everything they could. Moreover, they insist on price reductions and do not care that the energy prices are high.
The shipper’s revenge is here. And now, suddenly, logistics service providers have started thinking was the growth achieved in the last years sustainable. What to do with its sales strategy in a downturn market.
All those questions are valid. Therefore we thought to provide you with a few insights into what you should do with your sales strategy.
1st. Stay calm.
Many economists think this recession will not be as harsh as it was in 2007. And we have the same opinion. Because the need for logistics services is constantly growing. The global logistics market is growing YOY, and it’s proposed to reach 6,88 Trillion by 2024 (in 2020, it was a 5,73 Trillion industry). Moreover, the global driver shortage is more than 2mln; this will again limit trucking capacity availability, which is good news for freight prices.
So yes, there will be a downturn, but this is not a tragedy, and the future will be bright again. But of course, by staying calm, we do not mean doing nothing, so stay tuned and read below what you should do.
2nd. Look for product groups that are growing.
Because of the recession and increased energy costs, some product groups are declining, for example, the chemical, metal, and paper industries. So you can be in trouble if your company is based in Europe and most of your customers are fertilizer producers.
On the other hand, many other industries are growing. For example, firewood, biomass, and solar panel sales are booming right now, so a good idea when building your prospect lists would be to look at the growing industries. And there will be many other opportunities, as when a recession hits, consumers tend to change their buying behavior, for example, consuming lesser meat and increasing cereals.
What I want to say here is that everything depends on you. If your customer base is diversified, your organization will live through the recession more smoothly. So if you haven’t diversified your customer base, start doing this today.
3rd. Enter other markets.
Some markets are affected by recessions more than others. For example, Europe will be affected by the energy crisis more than Scandinavia or the USA. Moreover, when energy prices and other uncertainties hit, some exporting regions will become importing and wise versa. For example, there is a massive demand for trucking and drayage services in Ukraine right now; before the war, this wasn’t an option you would think of. And after the war, this region will boom again because of the rebuilding.
So, if the region you serve is not profitable anymore, look for other markets. I know that this is not an easy thing to do, as entering new markets takes time. But I’m sure you know stories of when companies make 360 degrees turns in a few months, so it’s possible. So, for example, if you are doing brokerage in Europe, you can also do this in the USA and wise. Or if you did drayage in Baltics, you could switch to Ukraine (it’s risky, but freight prices are great). And wise versa.
You must understand that there are always options; you need not panic but look for ways out. Moreover, as other companies are panicking, you can reap the benefits of the first arrival.
4th. Speed up new business development
Business development needs to be done constantly. But the best time to start is today if you haven’t done this in the last year.
Constant new business development is super important for each period, but this gains even more importance when uncertain times approach, as you never know who can be hit. Therefore, diversifying your customer base is the best option.
The best thing you can do is instruct your sales managers to widen their reach by adding customers from industries you haven’t worked with previously, which have great chances of growth during a recession.
There is another essential thing that you need to consider. Many logistics services sales managers haven’t seen a recession in their lifetime (the last serious one we had was in 2007). So, it would help if you prepared them. The best way to do that is by investing in training and coaching. Thinking that your employees will find ways out alone is a big mistake.
Moreover, sales leaders must train and coach constantly; you must set up a yearly training plan because positive change takes time. Furthermore, training needs to be adjusted to the new reality; selling in good and bad times is not always the same. And do not worry about the expenditures. Studies show that every dollar/euro/pound invested in training generates six times the ROI.
And lastly, all recessions create significant opportunities because, usually, many companies start to panic-cut marketing and sales development budgets. So those who do sales and marketing effectively during a downturn can grow faster.
5th. Build a sales process and a sales strategy.
Many logistics service providers do not have a sales process, and some do not have a sales strategy. As a result, many companies’ sales department is holding on thin air. So, guys, take yourself in your hands and invest in building a sales process and strategy. Period.
If you haven’t done that yet, please do this right away. Look. Usually, businesses start building a sales strategy after the company is incorporated with its mission and vision statements. So, no, just cold-calling a list of entities; referral-based growth or head-hunting a sales manager with his business books is not a strategy.
And suppose you haven’t backed up your sales strategy with a visible and measurable sales process. In that case, you are missing many opportunities, and there is a big chance that your sales operations are costly, and you can find many saving opportunities there.
The same is true about marketing. You can read more about two significant reasons you should invest in marketing here.
And lastly, now it’s the best time to invest in the above initiatives. Because most likely, you’ve earned good profits in the last two years, so the wisest investment you can make is to invest in your company’s future growth. Believe me. It will pay off.
Let’s get in touch with us, and we will build you a killer sales and marketing strategy. We will train your sales managers to crash the quote in uncertain times.
And if you are looking for a marketing agency that understands your business and shippers’ pain points and can help you differentiate from the competition by building thought leadership.
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