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Why Many 3PL Companies Struggle with Customer Acquisition
Many 3PLs are known for the exceptional ways they run warehouses, but not necessarily for sales skills and acumen. While running a warehouse is a breeze, sales and marketing skills may take a bit more effort. Oftentimes, 3PLs will struggle to:
- Develop and implement sales goals, strategies, and tactics
- Articulate the characteristics of their ideal warehouse customers and how to find them
- Touch prospects with the consistency, speed, and persistence to win deals
The industry’s overall lack of sales savvy represents both an opportunity and a threat. This serves as a tremendous opportunity because most 3PLs perform poorly in the sales arena and ultimately end up dropping the ball – leaving the door wide open for you to close the deal. If you find yourself not performing, it stands as a wake-up call to create a well-oiled sales and marketing machine so that you aren’t gobbled up by the competition. Some of the more common reasons that many 3PLs encounter struggles with sales are listed below:
- The president or owner of the company is the primary “sales rep” and wears many hats
- The 3PL is smaller in size and has limited labor resources to devote to full-time sales or marketing efforts
- The 3PL does not have enough funds to invest in anything more than the minimum for sales and marketing
Regardless of the reason, average or below average current results are not a death sentence. It’s easier than you think to elevate your sales operations to the highest levels.
Generating Logistics Leads
How to Develop a Strategy That Performs as Well as Your Warehouse Operations
To succeed in your sales operation, you must have a plan. At the most foundational level, growing your sales starts with taking care of your existing warehouse customers. In fact, it’s not enough to just meet the basic needs of your clients – you must “wow” them with your service and give them a reason to mention your company to others in a positive light. In essence, you must strive to produce “raving fans” – customers so happy with your service that they will not leave and will proactively mention how great your services are to others. This is the type of service they won’t get anywhere else.
By “wowing” your warehouse customers, you turn them into raving fans, which can be used to:
- Ask existing warehouse customers for testimonials and reviews to be placed on your website and through various review sites
- Ask existing warehouse customers for referrals
Equally important – wowing your warehouse customers will reduce the loss of clients due to performance issues. It serves no point to add new business if the service is at a level that won’t keep warehouse customers happy. Once you have your operations in tip-top shape, you can confidently begin to acquire new warehouse customers/clients. But where do you start? It begins with knowing who you want to do business with.
Know Who You’re Targeting
Most companies don’t stumble into success. Rather, they implement and execute a detailed business plan. Identifying the ideal customer you’d like to target is a similar process. It’s important to know who you want to do business with so that you can find channels to target and avoid customers you don’t want to do business with, saving valuable time and resources.
Be strategic about your ideal warehouse customers and prospects. Look at your existing customer base and see who you’re currently doing business with, including specific types of products, industries, customer sizes, geographic regions, and technologies used.
Ideal warehouse customers may even be companies that you’ve never done business with but aspire to. The sky is the limit. But the more specific you get, the better results you’ll experience in the end.
Examples of potential 3PL warehouse prospects include specific:
- Product types, such as medical devices, food-grade products, electronics, apparel, etc.
- Industries, such as construction, arts and entertainment, education, etc.
- Sizes of warehouse customers, ranging from startups to Fortune 500 companies
- Geographic regions, such as locally based companies, companies that export to certain countries, etc.
- Technologies employed, such as Shopify users, EDI users, etc.
Once you’ve identified your target prospects, you can focus on where it’s best to find them, such as at tradeshows and events, a specific and personal marketing outreach channel, magazines or online websites, or other methods altogether.
Know Your Ideal Customers’ Pain Points in Searching for You
Large companies may be very sophisticated when it comes to sourcing 3PLs – they may have current or previous experience using 3PL services. Larger or enterprise-level companies will likely have formal Request for Proposals (RFPs) and specific Service Level Agreements (SLAs) they’re searching for. Smaller companies that are still growing may just be dipping their toes into the water of outsourcing. With that will come a great deal of fear of letting go of their operation. Some businesses may not have any perspective at all and are willing to jump in with both feet.
Regardless of their perspectives on the 3PL industry, many businesses won’t have anyone in their network that uses fulfillment, and if so, it might not be the right fulfillment company for them. Therefore, they will be searching for 3PLs just like yours, and that search process comes with certain pain points.
The greatest challenge a 3PL will face as prospects are searching online for their best fit is competitors with large advertising budgets that appear more frequently in queries, regardless of quality and fit.
Furthermore, the internet is filled with unsubstantiated claims as brokers and middlemen further muddle the equation, leaving prospects with a set of results that are clearly biased and slanted.
Ultimately, prospects are looking for a partner they can trust. Not just somebody to trust with their operations, but a team that will have their best interest in mind. Business owners and stakeholders want someone to care about more than just profits.
Keeping these points in mind is critical when structuring your pitches. Becoming a trusted advisor is key to staking your claim to a piece of the 3PL new business market.
Armed with a best-of-class operation ready to add new business, and a thorough understanding of your target market, you’ll be ready to decide which sales and marketing channels best suit your needs.
How to Find and Follow up with Your Ideal Customers
You’re now ready to put the finishing touches on your sales strategy, which involves the identification of the specific channels to target and acquire your idea prospects and the methods with which you will communicate with them. For 3PLs, there are several options to pursue. You can decide which acquisition channels best fit your organization:
- Salesforce for in-person visits and cold calling
- Attending trade shows
- Networking with other relevant contacts, such as commercial real estate brokers and freight carriers
- Email marketing lists and newsletters
- Online marketing, including social media, paid search, and SEO
- Use a lead generation service
In terms of using a lead generation service, there are some things to look for and pitfalls to avoid. Brokers and commission-based companies present some challenges. Look for a company that doesn’t penalize you or the end customer, and where you have control over the relationship. If not, the broker or middle person can pull the rug out from underneath your feet and you’re left with filling the sales gap.
Their platform acquires prospects using online marketing, screens the leads for quality, and matches them to up to five 3PLs that most closely fit their specific needs. The project scope and contact details for the lead are emailed to the selected 3PLs, and each 3PL then contacts the prospect, ultimately provides a price quote, and competes for their business.
This type of lead generation model is a good option for both 3PLs because they:
- Generate leads for busy 3PL operators that don’t have enough time or enough money to invest in a full sales and marketing department.
- Minimize costs by simply charging a small, one-time lead fee for each “opportunity to quote”. You get 100% of the business you close.
- Allows the 3PL to target specific services, geographic areas, and other dynamics that suit their needs.
- Do not operate their own warehouses nor are they in any way affiliated with any warehouses. They are a fully independent company offering unbiased matches.
- Offer a quick way to start generating prospects immediately.
WarehousingAndFulfillment.com screens each 3PL by:
- Conducting a full-scale analysis of their overall operations and capabilities.
- Speaking with customers and investigating online reviews.
- Researching performance and financial information of the 3PL to access long-term viability.
- Compiling reviews from all the users of their platform to access the quality of service of 3PLs in their network.
Now that you know who you’re targeting and how you’re going to reach them, specific strategies and tactics can be developed and employed to physically contact them. Contacting prospects, following up with them, conducting demos and site visits, delivering pricing, and continuing to follow up with them over an extended period requires a plan and persistence. Whether you get their name and contact info from a site visit, tradeshow signup, an email marketing list, a call from a direct mail piece or magazine ad, or website submission, creating a formalized process of follow-up with help ensure the greatest success over time.The most critical steps include determining:
- How you will organize the prospects (e.g., Excel, CRM, etc.)
- What methods you’ll use to reach them (phone, email, direct mail, personalized gifts, etc.)
- How frequently you’ll follow up with them
Again, persistence is the key, and closing prospects may require consistent follow-ups over a period of weeks, months, or even years if the deal is large enough.
At a baseline level, having a routine cadence to follow-ups with “warm leads” is a minimum, and prospects expect you to follow up quickly. Reaching out within a day is no longer sufficient – deals are won by 3PLs that respond within hours. Be sure to follow up numerous times and use different methods, such as both email and phone.
In addition to warm leads, it’s helpful to have a follow-up process for cold leads as well. These are companies that either didn’t respond to your outreach, indicated that they aren’t ready, or chose someone else. In the world of fulfillment, a current provider can slip up and lose a client in a heartbeat, so being top of mind is important so they will think of you when they need a different alternative.
Below are a few ideas for following up with cold leads:
- Try to touch them at least 1-2 times per year, but could be up to once per quarter
- Provide value when reaching out, rather than performing the standard sales pitch
- Get creative with your outreach methods, as they will help you stand out from the crowd
