Thursday, June 15, 2006
Growth in the 3PL industry continues to outpace the general economy...and it has become a fragmented industry with many players chasing the same customers. The situation calls for smart, strategic marketing that helps your company break through the clutter and create awareness that leads to more opportunities and more sales.
Here are five common mistakes 3PLs make in their marketing efforts. Avoid these and you’ll be a step ahead.
1. Marketing from the inside out.
The first place many 3PLs look when crafting marketing messages is the mirror. But what they see often describes most of their competitors, as well. For buyers of 3PL services, too much of the same information is confusing. If everyone says “we’re quality-focused, we’re easy-to-work-with, we can provide visibility to your inventory, etc.,” how does the prospect know who to buy from? She doesn’t and, for want of helpful information, the message is ignored and some portion of the marketing budget is wasted. The antidote: get inside the mirror. Look at the buying choice from your prospect’s point of view. Is it easy for your best prospects to recognize what sets your company apart?
The process of differentiating your service in the mind of the prospect is called positioning. Create a positioning statement that starts, “We want to be perceived as….” This statement is your marketing destination – the perception your communications are designed to create. If you’re thinking from the outside in, the positioning statement will be simple, believable, differentiating and relevant to the challenges of your best prospects. Before communicating, think about the position you want to occupy in your prospect’s mind and be disciplined about reinforcing this perception in all your communications.
2. Over-investing in sales at the expense of marketing.
Whenever we purchase something, whether a car, a candy bar, or logistics services, we go through the same cycle of buying:
Awareness, Acceptance, Preference, Choice.
While the cycle can be long or short, the buyer does not get to Choice before going through the other stages. The sales function – characterized by one-on-one interactions, is best designed to create Preference and Choice for your service. The marketing function, which uses the web, media relations, advertising and other means to communicate to a large target group, is the most efficient way to create Awareness, Acceptance, and broad understanding of your brand’s value, and to generate a good percentage of the leads that your sales professionals pursue. Sales’ job, a time-consuming and challenging one in the 3PL arena, should be to create Preference and Choice among the companies most likely to purchase your services. 3PLs that under-invest in marketing force their sales people to carry the weight of the entire buying cycle and create a far less efficient business development process.
3. Selling as the primary means to drive inquiries.
3PL lead generation efforts often consist of targeting groups of prospects (via mail, email or phone) with sales-oriented messages, hoping that their timing is right and that one or more of the recipients will have an immediate need. But hope is not a strategy and such efforts rarely yield a solid ROI. 3PLs should place more marketing focus on creating reasons for the prospect to contact them. Case in point: Since 1990, Gross & Associates, consultants in material handling logistics, has published its “Rules of Thumb” for estimating capital equipment costs associated with alternative layouts, operating systems, and equipment applications. Each year the firm receives about 2500 requests for this handy reference guide from the very people with whom it wants to build a relationship. With the prospect names and contact information in hand, the firm can continue to cultivate these relationships so that Gross is top of mind when the prospect is ready to buy.
Think about what you are an expert at, then stop selling to cold prospects and start educating. By providing helpful, substantive information, you will draw more people to your message, position your organization as an expert, and generate more leads than typical hard-sell marketing messages.
4. Underestimating the power of the web.
While logistics service providers still rely heavily on referrals for new business, buyers of logistics services increasingly look to the web for guidance. According to WordTracker.com, which tracks keyword searches on the internet, about 205 searches are conducted daily on the term “warehousing” and about 576 on the term “logistics.” Add in additional searches on variations of these terms (e.g., value-added warehousing) and other logistics and supply chain-related phrases, and there are thousands and thousands of daily searches relevant to warehousing and logistics. Your prospects are on the Internet looking for help.
The question is, will they find your company during their search? Online marketing includes search engine optimization, or SEO (the science of getting your web site to rank high on search engine queries for specific keyword phrases), as well as keyword purchases, link building, advertising and other tactics to bolster your online visibility. It has become a complex discipline requiring specialized expertise. Most 3PLs lack the internal know-how to do this well and should seek outside help to assure they are leveraging this critical part of the marketing mix.
5. Delegating marketing responsibility.
As the 3PL industry has become more competitive, there is a greater need to identify new markets, differentiate the company and tell its story in a compelling way. But attracting people with the marketing skills to do these things well has not been a 3PL recruiting priority. In fact, the marketing function often is delegated to a manager in another discipline as an add-on responsibility. This may be the only option in a lean organization, and it can work. But don’t assume this manager can quickly develop the requisite skills needed to execute programs well. Provide the budgetary support to allow this person to hire communication specialists or source needed talent on the outside.
As a 3PL executive, marketing deserves your attention. Great service at an acceptable price are now table stakes and therefore difficult to leverage as a source of competitive advantage. You’ll need smart marketing to help understand the market, identify profitable niches, and create awareness and understanding of your company’s unique value among those most likely to purchase your services. But hey, it is no problem if you keep on doing it the same old way...all the better for Exel, DHL...
Look, the next two weeks are going to be busy for me...the 4th Annual 3PL Summit in Atlanta will be my destination the last week of June. I am on a few panels, and will be working with the Global Institute of Logistics on a new work group focused on end-to-end supply chain collaboration. Should be great...I will give you all the details of the conference next week.