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Customer Service is dead. Long Live Customer Service.

Customer Service in this country has been dying a slow, painful death over the last few decades. From poor communication to general rudeness, a lot of factors play into this, including the fact that buyers are more sophisticated and have higher expectations. Either way, the decline in customer satisfaction is real and evident in every industry. The transportation space is no exception.

In writing the business plan for http://www.revolutiontrucking.com, we spent an inordinate amount of time on defining both who our customers are and identifying ways to exceed their expectations. We’ve defined our customers more broadly to include three major stakeholders: employees (including drivers), shippers, and carriers. For the purposes of this paper we are going to focus solely on shippers.

Now that we’ve defined the “who”, we should examine our “touch points”. There is no average shipper when it comes to communication expectations. We have shippers we communicate with using phone, fax, email, text, and Skype. Regardless of the form, the basic principles of good customer service remain true. Share the right information, at the right time, in the right format, to the right people…all delivered in a friendly manner.

It’s really that simple. So, let’s look closer at each component.

Right Information

When dealing with shippers, more than 80% of the time they provide us with incomplete information. Something is almost always missing. Whether it is weight, dimensions, commodity, pickup or delivery times something is either missing or incomplete. It’s our job to make sure we get all the information before there are any commitments. Sometimes this involves speaking with multiple people. We might have to reach out to the production manager or even the consignee/end customer. New employees often get frustrated and become short with the shipper employee tendering the load. This is absolutely the wrong approach. Sometimes in business you have to do “their” job for them. Don’t get upset and blame them, as there is usually a reasonable explanation. They could be understaffed. They might not know where to get the information or who to call. Be patient and help them think through it. Part of our job is to make their life easier and position them as the hero. I’ve always found you secure a lot more business when you can save the day. We are in the business of solving problems, and this is part of it.

Right Time

Although it requires extra effort, nobody was ever penalized for over-communicating. From the first call to book the shipment through invoicing and collections, you should provide clear “touch points” to ensure the customer is always in the know. In addition, we know that 1 out of 5 shipments have some kind of issue. Although you don’t want to alarm the customer (particularly if you can resolve the challenge without impacting quality), if there are real issues that demand communication, we err on the side of communicating with the shipper. Now, you don’t want to show the customer “how the sausage is being made”, but at the same time you need to communicate anything that impacts quality so they can make any appropriate changes. The best example of this is if the delivery time needs to get pushed out and they have production or personnel that will be impacted. If the clock is running you can save the customer a lot of time/money or avoid penalties the sooner they are made aware of the situation.

Right Format

So many times transportation providers will communicate electronically (usually email or text), taking the easy route for them, when really a phone call is much more appropriate. We actually promote the “belt and suspenders” approach. We will send off an email immediately to the right group, but then follow-up with a phone call. Why? Remember, people are busy. They might be in a meeting and not looking at emails. A phone call signals the importance. You also might want to call because you want to discuss the options based on the new information. Back and forth via email is slow and more difficult approach to problem solving.

Right People

More often than not, there are multiple parties on the shipper side that need to know about any changes. For example, the shipment might be an intra-plant move from their production facility in Chicago to their DC in De Moines. In this case, both locations need to be made aware of the current situation. Another situation is when the product is being delivered to an important customer. If the shipper allows it, make sure you communicate with the salesperson or head of customer service so they can take the appropriate action. I don’t know how many times as a salesperson I was walking into a customer location and their was a “burning issue” with their freight. One of the things we implemented in our CRM system is that whenever there was a service issue the appropriate salesperson received an automatic notice, usually via email. This allows the salesperson to be informed before walking into a customer meeting. This eliminates a lot of “song and dance”. Nothing is worse than when the customer has more information about an issue than the transportation provider.

Friendly Manner

It always amazes me how many people communicate information in a non-caring or ambivalent way. Worse yet, some folks are just flat out rude when delivering both positive and negative news. Because at Revolution we always value the relationship over the transaction, we view the shipper as part of our extended team. We communicate in a professional and courteous way. You can diffuse a lot of issues by being friendly. It doesn’t require any more energy, so do it. You will be surprised how many challenges become non-issues when you are friendly. Most shippers understand things happen that are out of your control. That said, we own the solution, so do it with a smile and the shipper will at a minimum respect your professionalism. A little bit of empathy never hurt either. Sometimes their job is on the line.

Summary

In conclusion, great customer service is the easiest part of the job. So why do so many transportation providers fall short when it comes to world-class communication? There are a number of factors that can play into it. Maybe they are having a bad day and they let it extend out beyond their four walls. They are afraid of upsetting the client or dealing with their wrath, so they drag their feet or withhold information. The customer is small relative to their other customers and they let their relative importance change the way they communicate. Or maybe they are just lazy and don’t want to use any energy to do it right. Regardless of the reason, your people need to always rise above their personal reasons, protect the company brand, and communicate the right information, at the right time, in the right format, to the right people…all delivered with a smile.

  • James Adams
  • CEO and Co-Founder
  • Revolution Trucking, LLC
  • james@revolutiontrucking.com
  • (330) 975-4145

Cognitive Bias is Making Your Job More Difficult

If you, like me, are a human being, then you have a certain number of cognitive biases. In fact, it’s difficult to function without a few biases in order to move throughout your day. Most of them you are not even aware you’re making. Unfortunately, most negative outcomes can be attributed to one form of bias or another. I want to make you aware of how cognitive bias negatively impacts your job. Let’s start by defining cognitive bias.

In its simplest form, cognitive bias is an error in one’s line of reasoning when the decision is flawed by personal beliefs. Cognitive errors play a major role in behavioral science and represent an entire field of study. For our purposes, we will limit them to the top 7 types of bias common in day-to-day business.

  1. Overconfidence
  2. Herd Mentality
  3. Loss Aversion
  4. Framing
  5. Anchoring
  6. Confirmation
  7. Hindsight
  1. Overconfidence Bias results from one’s false sense of skill, experience, or self-belief. It is probably the most prevalent and dangerous form of bias in business. The most common manifestations include illusion of control, timing optimism, and the belief that something will happen because you want it to happen.
  2. Herd Mentality is when managers blindly copy and follow what other leaders have done. When they do this, they are being influenced by emotion, rather than by independent analysis.
  3. Loss Aversion is the tendency for managers to fear losses more than focus on trying to maximize ROI. The more losses one experiences, the more loss averse they likely become.
  4. Framing Bias is when someone’s decision is based on the way information is presented to them, rather than based just on the facts. In other words, if someone sees the same facts presented in a different way, they are likely to come to a different conclusion about the information.
  5. Anchoring is the idea that we use pre-existing data as a reference point for all subsequent data, which can skew our decision-making processes. The most common form of anchoring is the order in which information is presented, first or last. It can dramatically change the outcome.
  6. Confirmation Bias is the idea that people seek out information and data that confirms their pre-existing ideas. They tend to ignore contrary information. This can be a very dangerous cognitive bias in business.
  7. Hindsight Bias is the theory that when people predict a correct outcome, they wrongly believe that they “knew it all along”. This can lead to drastically wrong decisions in the future.

Case Study

David is the COO of Q Company, a growing 3rd-party call center. The executive team decided to upgrade their phone system to better serve their clients, end-customers, and employees. They expected a 20% increase in productivity for a savings of over $1 million per year. The new phone system project was not to exceed $100,000 and they needed to go live in 90 days, just in time for the kick-off of a new major client, American Airlines.

David was the obvious choice to head up the project because of his experience. He oversaw phone system upgrades at 2 other companies – one as a consultant and one as the VP of Operations. David has only been at Q Company for 6 months, so he wanted to show the organization that they hired a superstar. You can guess how the project turned out. Here we go.

To accelerate the timeline and finish 30 days early, David wanted to use Company X in conjunction with their leading managed service provider. He had worked with both firms before. Because he needed three bids, he used Google to identify X’s top 2 competitors – Company Y and Company Z.

He sent each of them the project specifications in order to bid on the project. Within 1 week he received all three bids, each of them being under the budget and target date, and within 5% of each other. He picked a day for each company to present their case via a 1-hour Zoom session – Company Y in the morning and X and Z in the afternoon.

Company Y was the least expensive option and their presentation was phenomenal. They touched on all the pain points, used relevant case studies, answered all his questions, and better yet, they had their CEO lead the presentation. David was impressed.

With the executive team’s blessing, David proceeded with Company Y. Unfortunately, the project finished in 120 days, was $25,000 over budget, and all the stakeholders hated the new system. What in the world happened?

As you probably guessed, when the executive team conducted a project post-mortem, they found David had encountered all 7 forms of bias. No wonder the project was a disaster.

The last phone project David led went flawlessly. He saved the company over $50,000 and received a promotion and pay raise. From that point on, David believed any project he led would be a success. Clearly, hindsight bias played a role. David’s prior experience and need to impress the team led to overconfidence bias. He never brought the rigor this important project demanded. Rather than looking at the solutions that best fit his company’s needs, he lazily selected Company X’s two main competitors. Yep, herd mentality. David exhibited loss aversion when he tried to save a few bucks with the low-cost solution. It ended up costing him a lot more as Company Y had never worked with the service provider before this project. David fell in love with Company Y, the first presenter, because of their story and the fact that the CEO was the main presenter. He didn’t really pay attention to the other two in the afternoon. A clear case of both framing and anchoring bias. During David’s lunch break, and before X and Z presented, he went online to read the reviews of Company Y. They had a 4.5 star rating and stellar reviews. Little did he know, more than half of the reviews were fabricated by the company. He never bothered looking at the reviews of the other companies. You guessed it – confirmation bias.

Moral of the Story

Bias can be a job killer, or worse yet, an actual killer. Think about the ramifications of a structural engineer or a space shuttle scientist exhibiting bias. Could be deadly. It can lead you down the wrong path from the start and blind you from reality. Bias is insidious as it creates the illusion that everything is just fine. It’s scary because it obscures the truth and continues to point you in the wrong direction. The good news is that bias can be easily avoided if you are aware of the different types in advance…and conduct a daily sanity check.

  • James Adams
  • Chief Executive Officer
  • Revolution Trucking, LLC
  • james@revolutiontrucking.com
  • (330) 975-4145

Managing Upwards Requires Real Effort

It doesn’t matter who you are, you report to someone. Even the CEO answers to the Chairman, Board of Directors, and outside investors. Besides managing people that don’t report to you, managing upwards may be the most difficult part of your job. When you hear the word “manage”, nearly everyone envisions managing direct reports, but really, you manage in four directions.

  1. Your boss (upward)
  2. Your peers (laterally)
  3. Your direct reports (downward)
  4. Your external stakeholders (outward)

It’s my estimation that most people spend 99% of their time on 2 through 4. Although 1 is the most difficult, it is also the most important. There are three main reasons people willfully ignore managing their boss. First, it can be intimidating. Second, it’s not easy. Third, it has a negative connotation. Ever heard of the phrase “sucking up to the boss”. Well, all three are 100% wrong. It’s your boss, so just embrace it. It’s not that difficult, it just requires a little thought and effort. And, who cares what others think. When done right, it will never be viewed as sucking up except by those who are jealous of your success.

When managing your boss, or anyone more senior to you in the org chart, I’ve always followed a simple three step process, and it has served me well.

  1. Understand what makes them tick.
  2. Find out how to best engage them.
  3. Discuss what matters most to them.

Now, to be successful, there is really only one skill that’s required. Emotional intelligence. What’s that? Well, I’m glad you asked…..

Emotional Intelligence, or EQ, is defined as the capacity to be aware of, control, and express one’s emotions, and to handle interpersonal relationships judiciously and empathetically.

Other than that, it’s just another process. Let’s break it down.

1. Understand what makes them tick.

This one is fairly straight-forward. I will describe it through a bunch of things you need to research. Some you can find online. Some you might need to ask your peers. Finally, you might need to ask your boss directly. So what are some things to consider? Understand their interests outside the office. Understand their bio, accomplishments, and history with the company. Understand their current role and expectations in the company. Understand the key performance metrics that guides their work. Understand their career trajectory. Understand how they are measuring your group. Understand how they measure you individually. And most of all, understand their personal interests outside of work. Now, I’m not suggesting you create a dossier on your boss, that’s creepy. Instead, have a basic understanding of them, in general terms.

2. Find out how to best engage them.

Everybody has their own style of communication. Some people prefer face-to-face meetings. Others prefer electronic communications. And still others prefer the “don’t call me, I will call you” approach to communications. And don’t forget about the frequency of the interactions. Some like engagement daily, others weekly, and some maybe quarterly. It all depends on them.  Regardless, talk to your peers to better understand your boss’ preferred style of communication. They will know. And they will provide good recommendations. So, please pay close attention.

3. Discuss what matters most to them.

A little small talk is fine, but when you have their attention, focus your time on the things that matter most to them. Tell them about your major projects, what’s working and where the challenges are (and your solutions). Give them numbers, data, and facts. They have a business to run, and you can help them appreciate how things are going. Assumptions, hearsay, and half-truths will only come back to haunt you. Don’t ever throw people under the bus. Nobody wants to be a victim of friendly fire. Don’t worry, if your boss truly cares about you, he will spend time learning more about you; however, that is their prerogative.

Short Case Study

A long time ago in a galaxy far, far away…. there was a Director of Sales that reported to me. He, along with 4 other directors, were all experienced and knowledgeable. Each were subject matter experts (SMEs), not only in transportation, but their respective industry verticals. None of them resided at our headquarters; they were spread across the continental US.

This individual was a high performer. He was crushing his numbers every quarter and he was well-respected by the rest of the organization. There was only one problem. He never built rapport with the executive team (other than me). This created several issues. First, they didn’t have a real appreciation for what he did or how exactly he contributed (except during the monthly P&L conference call). Second, the executive team never developed a genuine sense of empathy for him. Finally, whether real or perceived, it created a sense that he wouldn’t be able to advance in the company.

Now part of this was my problem because I wanted him to succeed. And if it wasn’t rectified, it was going to become a major stumbling block. So, I did two things. First, I made him schedule two days at HQ each quarter, so he had the opportunity for face time with the other execs. Second, I provided insight into each member of the executive team, essentially answering 1, 2, and 3 from above.

It definitely helped, but we never truly closed the gap. And I view that as a failure on my part. If I had to point to the root cause of the failure, it was the fact he never took it as seriously as I felt he should have. He never scheduled one-on-one time with each of them in advance (these were busy individuals). He never tried to spend time with them outside of the office. He never got to know them personally. It was business as usual. The only difference was that the execs saw he was there in-person. Unfortunately, he ended up leaving the company. And that was a huge loss to him, me, and the company.

Moral of the Story

Your ultimate success depends on a lot of factors. But I would argue that your ability to manage upwards is the most important factor. Don’t take it lightly or you will slowly get lost in the shuffle. The onus is on you. View it as personal development. The closer you get to your boss, the smoother your career trajectory will be. Do you want a strong headwind or the wind at your back? It’s your choice.

  • James Adams
  • Chief Executive Officer
  • Revolution Trucking, LLC
  • james@revolutiontrucking.com
  • (330) 975-4145

Caveat Emptor: Know Your “True” Cost of Service.

When communicating, nearly everyone uses some form of shorthand (a simplified manner of communication). It’s efficient and accurate enough for most situations. That said, it’s also fraught with pitfalls.

Nowhere is this truer than in logistics and transportation. Forget for a moment not knowing or understanding the whole host of acronyms used in that industry, and most industries for that matter. Instead, let’s focus on the single most used phrase in transportation, “low-cost carrier”. Why? Because, in my experience the low-cost carrier is often the most expensive carrier. And that’s a major problem in the $2 trillion transportation industry.

It’s universally understood that the total cost of transportation consists of shipper-handling, pickup, linehaul, delivery, consignee-handling, billing, and collections. I agree, but these are direct, hard costs.  What’s ignored are the indirect, or soft costs? What are soft costs? Let’s focus on the costs related back to the “low-cost” carrier. These indirect costs fall into three buckets: time, service, and stress. In transportation, there are five main instances where these buckets apply.

  1. Insufficient, wrong, or no communication
  2. Lack of commitment or “give back”
  3. Incorrect truck equipment
  4. Late pick-up or delivery
  5. Unsafe driving or securing of freight

It’s no surprise that these costs are rarely factored into the cost of service. In fact, most shippers don’t even really acknowledge them as costs. What might surprise you is that any of these soft costs can easily dwarf the total direct costs.

To support my point, I would like to walk through a real-world example. Here is the setup.

CASE STUDY

A manufacturer of landscaping equipment, based in Atlanta, received an expedited order on Friday afternoon from Home Depot, their largest customer. They needed a direct delivery to a Home Depot in a Chicago suburb with a delivery window of Sunday between 8:00 pm and 9:00 pm CST, in time for a major promotion starting the following Monday morning. The order would amount to 12 skids weighing more than 20,000 pounds. The equipment was to deliver 500 feet away from the receiving dock in the Home Depot parking lot (a common practice for large sale items). This required a liftgate on delivery.

Liz, the Logistics Coordinator, was given the order information from Sales around 5pm. Because it was late in the day and it was scheduled to deliver on Sunday night, she was stressed (she was attending a wedding that weekend for her brother). She typed up the RFQ and hit send on an email blast to a mix of more than 20 carriers and brokers. She received 5 responses within 30 minutes.

Here were the all-in bids…

  1. Carrier 1:         $2,750 for a 53’ dry van
  2. Broker 1:         $2,900 for a 26’ straight truck with liftgate
  3. Broker 2:         $2,950 for a 53’ dry van with liftgate assist on delivery
  4. Broker 3:         $3,000 for a 53’ dry van with liftgate assist on delivery
  5. Carrier 2:         $3,200 for a 53’ dry van with liftgate assist on delivery

Because Liz’s company required her to select the low-cost carrier (assuming they could make service), she awarded the shipment to Carrier 1. Liz was both happy and confident because she could go home for the weekend knowing that an asset-owned carrier won the business. But here is how it played out…

Lack of commitment or “give back” – Carrier 1 committed to the load; however, they did not tell the Logistics Coordinator that the driver lived in Louisville, KY and would be dropping the trailer and relaying it with another power unit (tractor). The second driver would be leaving Louisville with the freight on Sunday morning, plenty of time to make service. Unfortunately, that driver was more than 4 hours late due to a late delivery for another client. Now they were cutting it close with no room for error.

Insufficient, wrong, or no communication – Carrier 1 accepted the load without any clarifying questions (this will come into play later). Carrier 1 never provided any status updates along the route; Liz was in the dark for the entire journey. It wasn’t until the Carrier delivered on Sunday night that Liz received an email notification.

Incorrect truck equipment – Carrier 1 never saw the requirement for a lift-gate on delivery (the others added $150 to their bid price), the difference between the Carrier 1 and Broker 1 rate. This forced the consignee (Home Depot) to receive the freight on their dock and reposition all the freight back into the parking lot, which added 2 hours to the process, greatly upsetting the warehouse people (by the way, they were already receiving overtime at time and a half).

Late pick-up or delivery – Carrier 1 picked up on time but was technically 2 hours late on delivery as driver 2 got a flat tire in Gary, IN and had no slack time available due to the relay. This led to a 20% chargeback from Home Depot, wiping out any profit on the purchase.

Unsafe driving or securing of freight – Carrier 1 and both drivers had excellent driving records. However, they did not properly “block and brace” some of the freight, and two pieces of equipment ended up with bent drive shafts. This led to significant claims from Home Depot.

When you total up your costs for Carrier 1, it looks as follows:

Pick-up and deliver$2,750
Home Depot chargebacks$4,000
Claims for broken axles$750
Warehouse personnel overtime$500
Upset customer         Unknown
Undue stress to Logistics CoordinatorPriceless
  
Total   $8,000 + untold damage to the brand
Total Costs for Carrier 1

I realize this might be an extreme example to prove a point, but it happens more frequently than you might think. In my experience, 9 out of 10 shipments execute like clockwork. However, it’s that single shipment that can go totally sideways and wipe out any savings that you thought you were enjoying by always selecting the low-cost provider.

Here’s what a best-in-class service provider would have done…

First, they confirmed the need for a lift-gate on delivery and included that in the bid price. Second, they fit the asset to the freight, sending in a 26’ straight truck with liftgate. Third, they utilized best practices on securing this expensive freight. Four, they included a link for real-time tracking, but also sent texts to Liz, the Logistics Coordinator, on pick-up, midway point on linehaul, and final delivery. Fifth, the driver went direct, arriving in Chicago on Saturday afternoon and spent the extra time sight-seeing in downtown Chicago. Sixth, they arrived 2 hours early, allowing the Home Depot team to unload them early. Another flawless load delivered. The shipper and customer were pleased as punch! The service provider sent the final invoice on Monday morning for $2,900! They also sent a follow-up email with a short survey. The carrier received a perfect score of 10 on their net promotor score.

MORAL OF THE STORY

There is a cost of service and a “true” cost of service. These can differ dramatically, so understand both the direct (hard) and indirect (soft) costs. Caveat emptor.

  • James Adams
  • Chief Executive Officer
  • Revolution Trucking, LLC
  • james@revolutiontrucking.com
  • (330) 975-4145

When should you consider relocating your office?

Since I started in logistics in the late 80’s with 3M Company (NYSE: MMM), I have been in charge of numerous office moves and consolidations. For example, at Panther Premium Services, because of the acquisition of 2 air freight forwarders in Chicago, we had to consolidate 3 offices to the ideal location in Elk Grove Village (our original office was in downtown Chicago, a 5 minute commute for me). More recently, we moved our Revolution office from Seville, OH to Wadsworth, OH (20-minute drive between the two). Below are 6 reasons to relocate offices (there are more, e.g., being closer to your vendors/suppliers, tax credits, etc.).

Right-size Your Office – Covid has taught us many lessons. One is that a much higher percentage of employees can be just as effective, sometimes more so, by working from home. This obviously reduces your necessary office footprint. This could be great; people are more productive with more room. This also provides you room for future expansion. Or maybe you decide to convert the additional space into something you’ve been considering, e.g., break-out rooms, private rooms, kitchen, an extra conference room, etc. However, if 20% of your workforce is now working from home, that is a lot of extra space. It might be time to down-size and reduce your rental cost by 20%; or get a better space for the same money. Either way, it’s time to look.

Shorten Commute – Today, most people don’t want to drive more than 30 minutes to get to work. This is a real barrier to hiring. You may have located to the perfect spot, but the average employee drives 45 minutes each way. Commute distance equals stress on employees. Calculate all of your employees commutes and you may find your “perfect” location is far from perfect. Every 30 minutes of commute time you lose about 15 minutes of work time for a whole host of reasons. If you can reduce their commute from an hour to 30 minutes you can pick up a half-hour of work time per day. That leads to a lot of extra time if you have 20+ employees! By the way, at Revolution, 80% of us live in Wadsworth…bonus!

Talent Pool – You may have located your office because of the building and space, but you quickly find that it’s hard to recruit quality talent within a certain radius. The problem could be big enough that it forces you to relocate. I worked in Manhattan, NYC for a number of years and found the talent we needed couldn’t afford Manhattan, so we had to recruit in the boroughs with easy access to the subway systems. Regardless, look at your own constraints and figure what you need to do to maximize your talent pool. Without the right people you will never grow your company as turnover will eventually catch up with you. It’s just a matter of time.

Getting Closer to the Customer – I’ve dealt with a number of companies that wanted to save a few dollars on their office and labor and then realized their miles away from their customer base. Post COVID it will still be important for face-to-face meetings, whether it’s sales or operations personnel. There might be a way to have your cake and eat it too – be close to a solid labor pool and nearer your customers. In other words, try to address as many factors as possible.

More Active Chamber of Commerce – We loved Seville, OH but it’s smaller than Wadsworth in population and the Wadsworth Chamber is much more vibrant and active. Wadsworth has already promoted us to all of their members, and it led to a lot of new business. Our exposure has quintupled overnight.

Consolidating Acquisitions – Like I mentioned earlier, if you are acquiring other companies, it might be time to consider relocating offices for two reasons. To mitigate the turnover of new employees from the acquisition and it might be a buyers’ market so you can improve on your current lease and earn some tax credits.

Having said all of this, you might ultimately decide that based on all factors that you don’t move at all. Just know this is something you should evaluate once a year to ensure you are not leaving money on the table. If you own your current building, maybe you can turn it into an investment, generate rent, and use the excess money to help pay down your future lease amount. My final message is, don’t take any of these factors for granted as they can give a material boost to your bottom line – immediately.

  • James Adams
  • CEO and Co-Founder
  • Revolution Trucking, LLC
  • james@revolutiontrucking.com
  • (330) 975-4145

Do you hear voices? We do.

Although Voice of the Customer (VoC) is a concept that’s been around for nearly 30 years, it amazes me how few companies do a decent job of it. For those unfamiliar, Voice of the Customer (VoC) is a rigorous process for capturing customer’s expectations, preferences, and aversions. There are a number of good books on VoC so we will focus more on what we do at Revolution to keep our finger on the pulse of our customers and the market place.

In the most general sense, VoC is nothing more than research. And there are two main types of research – primary and secondary. Primary research is defined as a methodology used by researchers to collect data directly, rather than depending on data collected from previously done research. Where secondary research involves the summary, collation and/or synthesis of existing research. I suggest you start by evaluating the available secondary research to educate yourself and your team. Google is your best friend here. Then decide what type of primary research you want to conduct.

Before we jump into the VoC process, I would like to discuss three major missteps companies make that you should avoid. First, many companies fully develop new services and then look for the market. I call this the “build it and they will come” approach. This is like trying to add quality into a product after it comes off the assembly line…it’s too late. Before you even develop a new service or a change to an existing service, spend time understanding the “true” underlying needs and potential market dynamics. This investment will pay off ten-fold. In fact, you might decide it’s not worth pursuing.

Second, many companies approach VoC in a robotic way, where the process is overly formalized for every case. VoC is very flexible and can be scaled based on the size and scope of the opportunity. For example, if you are making a minor change to a product or service, VoC can be completed in a week or two. If you are developing a completely new product or service for an industry where you have no experience, this could take weeks to months to do right.

Finally, many companies go it alone rather than employing an outside expert, introducing all types of biases and assumptions along the way that corrupt the findings. If you are unfamiliar with VoC, I suggest hiring a consultant to help guide you through the process until you develop your own internal capabilities. If you don’t have the budget, assign someone to quickly become an expert on the subject…it’s not rocket science.

The first step of the VoC process is to define the universe of stakeholders related to the opportunity. This is usually an existing customer or a potential customer. That said, the customers might cut across demographic, socioeconomic, psychographic, and geographic lines. I like using a Venn Diagram to help understand the differences and similarities.

Once you’ve defined your stakeholder groups, you should try to explain what you are trying to accomplish in the simplest terms possible. For example, are you trying to generate new demand for an existing product or are you trying to motivate existing customers to try a new product. This objective is going to be the foundation of the research you conduct.

Now that you have your goals outlined, it’s time to develop a working hypothesis that you can test with your research. I follow a simple 3-stage process for hypothesis development. First, define the current situation. How does your target market currently act? What’s the complication preventing them from trying your new product/service? Finally, what are you going to do to resolve their complication and get them to trial your service? In each of the three list the supporting facts and assumptions. You will be poking holes in this hypothesis throughout your research. As assumptions become “true” or “false” you adjust your hypothesis accordingly.

With your working hypothesis in hand you put together a research plan to test it (remember this is an iterative process). You may decide to do this yourself or retain an expert. There are numerous ways to engage your target market (you may use one or all of them), but here are the major ones, with pros and cons for each.

Surveys – This is the most common and usually the cheapest way to gather data. Usually conducted online and sometimes via phone, you are asking a few questions to a lot of people. I like to use surveys at the very beginning of the research to get some broad stroke results to challenge the hypothesis quickly and cheaply. Too many times companies try to answer too many questions in a survey because it’s easy. You really shouldn’t ask more than 10 questions, preferably 5 questions. If the survey takes less than 2 minutes you have a much higher likelihood of getting people to complete them. Customer satisfaction surveys are the most common survey. Often conducted quarterly, it’s a way to ensure you understand how satisfied your customers are with your service compared to expectations. Of all the questions, the one you must include is one that supports the Net Promoter Score (NPS). NPS is a way to understand how far your customer will go to support you. The question goes something like this, “On a scale of 0 to 10, how likely are you to refer (your company, products, or service) to a friend or colleague? NPS is very simple and valuable, so you should always include that question in your CSAT surveys.

In-depth interviews – IDI’s are perfect to dig in deeper on specific issues and opportunities. It’s basically a list of questions you go thru with an individual. IDI’s are good to conduct when you want to better understand certain information from the surveys that might be unclear. IDI’s are best conducted in-person so you can see the body language of the participant during the questioning. Most IDI’s last no more than one hour in duration.

Intercepts – Sometimes referred to as Street or Store Intercepts, they are the perfect tool for when you want to capture a consumer’s thoughts during the buying decision of your offering. Essentially, you have a researcher “intercept” them while shopping. You often see these researchers in shopping malls with a clipboard and pen. The advantage of intercepts is that you get the feedback from the participant while they are on the buyer’s journey, or “in the act” so to speak.

Focus Groups – A focus group is a demographically diverse group of people assembled to participate in a guided discussion about a particular product/service before it is launched, or to provide ongoing feedback on an existing product or service. A typical focus group consists of 7 to 10 people that are guided through a collaborative discussion by an experienced moderator. They are typically conducted off-site in a conference room with the session being recorded for future use. They can last anywhere from 1 to 3 hours depending on the complexity of the topic. Individuals are usually paid anywhere form $100 to $1,000 to participate. Focus groups can be a highly effective means of getting true insights into the hypothesis. That said, the value of the results depend directly on the experience of the moderator and the quality of the moderator’s guide.

Beta Testing – Although the concept of beta-testing came out of the software industry, it can apply to any product or service. In short, a beta test is the second phase of product testing in which a sampling of the intended audience tries the product out. Beta testing is also sometimes referred to as user acceptance testing (UAT) or end user testing. Find a small group of trusted, leading-edge users that value innovation and let them “kick the tires” on your product offering. This helps your team “work out the kinks” in your offering and provides feedback before you go to market. You might also consider a “soft launch” of your offering before you go wide and deep with your marketing efforts.

Summary

In conclusion, although the Voice of the Customer process can be intimidating, it’s worth investing time to do it right. Although marketing usually owns the process, it’s extremely important to have executive oversight. I highly recommend bringing in an expert to get you going in the right direction. Once you have the foundation, it becomes second nature and VoC becomes engrained in the organization. I also recommend you include some of the outputs as key performance indicators (KPI’s) in the monthly executive dashboards. It’s that important. Time to get your finger on the pulse of your existing and potential markets. Remember, most markets are fast moving. The payoff of implementing VoC best practices are substantial and will ensure you don’t get blindsided by the competition. Do you hear voices?

  • James Adams
  • CEO and Co-Founder
  • Revolution Trucking, LLC
  • james@revolutiontrucking.com
  • (330) 975-4145

How to Fix the $350 Billion “For-Hire” Truckload Industry

As most of you know, full truckload (I refer to it as just “truckload” in the rest of the article) is a mode of freight for larger shipments that typically occupy more than half and up to the full capacity of a 48′ or 53′ trailer. According to the American Trucking Association, the US Full Truckload market is approximately $600 billion ($350 billion handled by for-hire fleets, $250 by private fleets).

I’ve always viewed the truckload industry as a commodity. It’s stable, efficient, and the markets treat service as nearly equivalent without regard to which company provides the service. For me, this represents an excellent opportunity for innovation.

The purpose of this article is to highlight 3 of the major opportunities to both improve service and reduce costs in the for-hire full truckload industry. These include: shipper over shopping freight, lack of quality information, and service mismatch. In our estimate, if we were able to resolve these challenges shippers, carriers, and brokers would enjoy a $50 billion, or 8%, reduction in direct and indirect costs. Let’s get started.

Shippers Over Shopping

Many shippers and brokers believe it’s possible to lower cost and improve service by including MORE carriers in the quoting process. Shippers will email out an opportunity (or post to a bid board) to 10 to 100 different providers in order to receive a quote with the goal of selecting the lowest price carrier that can still make service. Surprisingly, our experience is that the service-to-cost ratio is actually improved when using fewer carriers (three to five) where the freight requirements better match the service requirements of the carriers. By tightening up the quoting process to those carriers that can “truly” provide service, the industry would enjoy the reduction of millions of hours of wasted time quoting on freight that they don’t really want, freight where they cannot make service, or freight where they will be uncompetitive.

Lack of Information and Misinformation

We all know there is a lot of bad information in the truckload industry. All participants play a role in this issue. Whether it’s the lack of information from the shipper (true weight, dims, commodity, freight availability, etc.) or carriers/drivers that are not being quite honest (capabilities, location, ETA, etc.). This cloud of uncertainty can cause all sorts of issues throughout the process; usually leading to safety issues, additional expense, or pick-up/delivery times being compromised.

At Revolution, our Carrier Excellence Program includes a Key Metric, Ease of Doing Business. This metric is both qualitative and quantitative. The quantitative component measures the number of times a carrier deviates from the process. The qualitative component is handled through monthly internal surveys with the individuals that “cover loads” and deal directly with the carriers/drivers. They rate “honesty” on a scale of 0 to 10. This information is then fed into our TMS and carrier selection process for a given shipment to ensure those carriers that are “less honest” move down the “pecking order” leading to fewer loads.

Service-Price Mismatch

I’ve always said that not all freight is created equal. The freight might be the same but the end-customer is new or is an important client. The freight might be the same but the pickup or delivery locations are different (busier shipper or consignee location, more remote, etc.). The freight might be the same but it’s paramount to get the freight off the dock by a certain time in order to book revenues for the quarter (time or speed). There are many other reasons, but you get the point. These slight differences cause the shipper to need different/additional services or superior performance than the traditional requirements. Unfortunately, shippers always want a higher level of service but do not want to pay the required premium. In short, they want the Mercedes service for Yugo prices. To meet this requirement, carriers and brokers are forced to do one of four things: reduce margins, cut corners, compromise service, or flat out lie to the shipper. All are bad.

At Revolution Trucking, we have come up with a solution to resolve this disconnect. We call it Service Select©.  Service Select© is a new and proprietary offering that matches the shippers service requirements to a specific carrier and even a specific asset or driver. Service Select© has 4 service levels with increasing price: economy, standard, premium, and guaranteed, each of which have a different level of service expectation.

Based on our data, approximately 80% of full truckload freight still goes Economy and Standard, which is no surprise; however, the other 20% is equally split between Premium and Guaranteed. Guaranteed service is very similar to the dedicated ground expedite market – a market that has been getting diluted over time. This more refined segmentation allows shippers to “buy-up” or “buy-down” based on the specific needs of that shipment and get the proper carrier match. More choices for shippers both add efficiency and improve service. A good thing.

Conclusion

I put all three of the challenges listed above in the “being lazy” category. All parties involved can do better, but deadlines, stress, and concerns of losing a shipment/customer force us to compromise our brand promise. Unfortunately, cutting corners leads to all forms of downstream supply-chain issues and ultimately the various parties start blaming each other when the freight doesn’t arrive in good condition, on-time, or at the quoted price.

A wise professor from the University of Chicago once told me that when a business takes on the task of changing industry norms that you should expect an uphill battle, regardless of who benefits and by how much. Like people, most industries abhor change. At www.revolutiontrucking.com we are up for the challenge. We want to be known as the company that spearheaded innovation in a massive industry rooted in its ways.

  • James Adams
  • CEO and Co-Founder
  • Revolution Trucking, LLC
  • james@revolutiontrucking.com
  • (330) 975-4145

Focus on Being Great and Big Will Follow

Don’t get me wrong; growing a company is a “great” thing. The most rewarding times in my career were helping companies attain growth rates that were multiples of the industry average. However, I’ve found that executives get consumed with growth when the best way to grow is by focusing on becoming great. Why the disconnect? Simply speaking, most executives focus their energy on quarterly financial performance, not how the financials are generated. So they ask their teams to put up certain numbers in a specific time frame but never ask the simple question, how can we become great?

It is generally recognized that acquiring new customers costs approximately 5 times more than retaining an existing customer. This depends on the industry and product/service, but my experience is that it’s fairly accurate. There’s another important axiom to me: it requires 5 times the effort to secure a new customer than to capture that same amount of revenues from existing customers (different products/services, divisions, geographies, etc.). I’m not suggesting doing one versus the other; my point is that being “great” is the most cost effective way to grow.

When you are great, your customers become your sales people. I will assume most of you are familiar with the Net Promoter Score (NPS). Although once controversial, it’s widely accepted as the single best measure of client satisfaction. On a scale of 0 to 10, how likely is it that you would recommend our company/product/service to a friend or colleague? In my mind, NPS is directly correlated to “greatness” and proportional to market share (for a given segment). In other words, it’s a measure of how well you are delivering on your brand promise.

Hang on a second. Don’t we need to define what “great” means? Well, your customer defines that and it can vary between customers and change over time. I’ve always found the easiest way to determine the answer is to just ask (a novel concept). I can tell you that most sales people don’t ask the question. Marketers usually fall back on the established quality-service-price triangle (personally, I would add “options” and call it the square). By the way, throughout my career I’ve had people suggest that you can only have two of three. That’s rubbish on a number of levels, but that’s for another blog.

So once we know how the customer defines “greatness” through surveys and in-depth interviews, what’s next? Well, look at the complete value chain for delivering your product or service and how it supports the clients vision of being a “great” supplier or service provider. Although there are a number of factors, it typically comes down to the robustness (speed, accuracy, and precision) of key processes your company controls or influences. By the way, Henry Ford’s “you can get it in any color you want as long as it’s black” wasn’t about a lack of capabilities, it was about cost and quality. Making inexpensive and dependable cars for everyone. Old Henry was really the founder of Lean Six Sigma (Lean = cost, Six Sigma = quality). Herb Kelleher used the same darn approach when he started Southwest Airlines. See, there really aren’t any new ideas.

Remember, before you get your hopes up, being great is a never-ending journey. I posted in the previous blog that more than 80% of the Fortune 500 corporations from 50 years ago are gone. When greatness becomes a continuous improvement discipline, then it becomes part of your company’s DNA. And once that happens, you are on the road to becoming big. See, it’s not even a chicken or egg problem. Focus on being great!

Objects in Rearview Mirror May Be Closer Than They Appear

I remember it as if it were yesterday. Sitting in Driver’s Ed, excited about getting my Driver’s Permit. There was one lesson that seemed odd…make sure to check your side and rear view mirrors every 3 seconds (I believe they’ve since extended that to 5 seconds). At the time it seemed a bit excessive, but with cars whizzing by you on the Dan Ryan Expressway like it’s the Daytona 500, I can understand their concern.

In business, looking back too frequently is the beginning of the end for your company, for three reasons. First, when you relish the past and constantly talk about the golden years, you create a culture that believes the best years are behind you. It’s demotivating to your leaders. Second, the argument that “those who cannot remember the past are condemned to repeat it” is a complete fallacy. Every situation is unique, the environment was different, and the variables are many. Don’t fall for the trap. Finally, if you become consumed with what the competition did or is doing, you lose touch with what is important to your business today and in the future.

Like everything, it’s a balancing act. Make sure you spend the vast majority of your time looking forward, understanding the fundamentals of the marketplace and how customers’ needs are changing. Yes, know where your competitors are and what they are doing, but don’t dwell on it or it will become a distraction to your leaders. Best-in-Class companies understand the market, create a vector of differentiation, and focus their energy on what matters most. Remember, everyone eventually gets to the right answer, but leaders get there faster.

We all know the past is a tricky thing. It provides us valuable lessons and at the same time it clouds our judgement. For me the past provides a measuring stick for continuous improvement.  We get better or we get worse…we never stay the same. Whether your KPI is customer satisfaction, win percentage on new business, or number of defects per thousand, it’s critical that you measure what’s important in your business, and more importantly, that you focus on getting better every day. And when the KPIs go backwards (in a statistically significant way), do a root cause analysis to understand why it happened. Focus on removing that “why?” and you will drive positive change and get closer to your goals.

As every leader knows, business is a game of inches. Consultants will tell you, just do this and that and you will solve all your problems. Unfortunately, it’s never that easy. There is no silver bullet. It’s a combination of things you must do to get your company back on track. Caution: that combination of things typically spans the enterprise and is rarely owned by a single individual (but that’s for a future blog post).

Objects in Rear View Mirror May Be Closer Than They Appear. This phrase was put on mirrors back in the 80’s to avoid consumer lawsuits; however, it provides us an excellent reminder to not panic. You put a lot of thought into developing a bullet proof strategic plan. Stick to it. Take the market’s temperature quarterly, but don’t act rash and jump to the next idea. Companies that are members of the “initiative of the month club” find themselves with mediocre results and “me too” offerings that won’t get you closer to your goal. Winning requires discipline and patience. If you are persistent, you will get it; if you are consistent, you will keep it.

The 7 Secrets to Finding, Hiring, and Retaining Strong Leaders

Companies with high employee retention aren’t necessarily successful; however, successful companies almost always have high retention. For as important as this metric is, it doesn’t get near the attention it deserves. That’s the impetus for this paper: to bring employee retention to the forefront and share proven strategies for hiring and retaining top performers.

Your workforce is in constant flux. That’s normal. Although reasons vary (changing demand, strategy, regulations, etc.), management and employees are constantly making decisions that affect the size and make-up of your employee base. In addition, healthy businesses are constantly pruning under-performers or those individuals that just don’t fit. All of that is a natural part of a businesses life-cycle. However, if management is not aligned, retention can become a major problem.

Executives understand that high employee turnover ultimately manifests itself in lower revenues and profits. The insidious part of turnover is that it has a short- and long-term effect. It can negatively impact your company in five primary ways:

  1.  Lower Customer Satisfaction
  2.  Increased Costs
  3.  Distraction to Operations
  4.  Loss of Institutional Knowledge
  5.  Low Employee Morale

However, there is a new retention challenge. Gone are the days of a homogenous, one-size-fits-all workforce. Today, the workplace has 4 distinct generations: Baby Boomers, Gen X, Millennials, and Gen Z Kids. Each group has a unique set of priorities and beliefs, the most interesting of them being how they define their career. On one end of the spectrum, Baby Boomers focus more on job stability and disposable income (to acquire assets such as cars, houses, etc.). On the other end, Gen Z Kids are looking for personal fulfillment, opportunity for growth, and free time to “experience” life. These diverging priorities make retention a much more complex issue than just a few years ago. That, and the fact that as of 2017 millennials make up the largest segment of the workforce. This demands thought…and flexibility!

The Foundation of Retention

Your top performers are the reason you are successful. Without them, you have no business, so you need to protect them at all costs. Top performers have some fundamental requirements, regardless of company or industry, which I refer to as the Hierarchy of Retention. I represent it as a pyramid on its point because it’s a constant balancing act, and from the bottom-up, as each builds off the foundation created by the other.

Strong-Positive Culture

When it comes to success, culture is both critical and ethereal. I’ve seen definitions range from having a clear mission statement framed in the boardroom to allowing employees to bring their dogs to work. That’s clearly inadequate. Culture is the collection of social behavior and norms that ultimately motivate employees to act. I define culture with two simple dimensions. Is the culture positive or negative; is it strong or weak. High-performers gravitate to strong-positive cultures where they believe they can thrive. Do individuals look forward to coming to work? Do they treat each other with respect? Do they want to win as a team? Zappos is an excellent example of a strong-positive culture that attracts top talent. On the other end of the spectrum is Radio Shack, a bankrupt company that continues to downsize and where employees are at best ambivalent about their future.

Strong Leaders

Now that you’ve defined your culture, you can instill it in the most important asset in your company – your managers. Throughout this paper I use the word “manager” in the most general business sense. A manager is simply a person in charge of the activities, tactics, and development of a team. A manager can reside at any level in the organization. I also use some descriptive words interchangeably, including “best manager”, “top-performer”, and “high-performer”. To me, these mean something specific – those that rank in the top quartile (25%) of the normal performance curve. We refer to these individuals as Strong Leaders and certify them along behavioral and practitioner lines.

Empowerment

With the right culture and people, you can now empower them. NOTE: Don’t waste your time hiring great managers if you won’t empower them. Many executives make the mistake of bringing on top talent and then micromanaging them right out the door. Remember, they have options. Bring on the best, set expectations, put a few guardrails in place, and get out of their way. Make midcourse corrections as needed, but ensure they have the resources they need to succeed and that’s a good start. One final item: I have seen companies that empower their people only to crush their souls with stifling bureaucracy, including overly complex processes and redundant authorizations. I’m a proponent of SOPs, but don’t enslave your employees and hinder their creativity.

 Development

Managers leave for two primary reasons. They are either underpaid or over-worked…or both. We determined the root cause for managers leaving is that they have not been armed with the skills to make their life less chaotic. In other words, because they are unable to address the inefficiencies and opportunities in the business, they become “burned out” and leave. Very early in our company’s history we analyzed the behavioral and performance data for top managers with tenure over 7 years. We found they shared a common trait – they made decisions as if they were the owner. From this single observation, we created a complete leadership training certification process called H.A.L.O, or How to Act Like an Owner. This online 90-for-90 (90 seconds for 90 days) micro-training complements your corporate training and focuses on leadership skills such as goal-setting, team-building, issue resolution, and communication.

 Summary

These four building blocks form the foundation of a best-in-class company with low employee turnover. This conclusion isn’t controversial, but it’s not obvious to many executives.

  • James Adams
  • CEO and Co-Founder
  • Revolution Trucking, LLC
  • james@revolutiontrucking.com
  • (330) 975-4145