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Presentation made at LOG.AE in Dubai for 3PLs and other logistics servixe providers. Creating a value proposition to increase customer retention, gain better sales, improve profit margins and …

Presentation made at LOG.AE in Dubai for 3PLs and other logistics servixe providers. Creating a value proposition to increase customer retention, gain better sales, improve profit margins and distinguish in marketplace from other commodity service providers. Presentation was very well received.

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  • 1. VALUE PROPOSITION Taking Your Logistics Service Business to the Next Level by Tom Craig www.ltdmgmt.com 1
  • 2. FIRST How many of you have a clear Value Proposition? 2
  • 3. UAE “Gulf region’s top logistics hub” World Bank 3
  • 4. Market Landscape Provide commodity logistics service (3PL, warehouse, transport, forwarder) Price dominates getting business Much customer turnover Many competitors All offer similar service as you 4
  • 5. Market Fight to retain customers from competitors offering cheaper price Fight squeeze on profit margins Fight to create a market / brand identity 5
  • 6. You and the Competition 6
  • 7. Your Profit Margin? 7
  • 8. Is This Your Sales / Marketing Strategy? Same approach as always OR—“The definition of insanity is doing the same thing over and over and expecting a different result.” Albert Einstein 8
  • 9. DISCUSSION Why you want one What Value Proposition is How you do it Questions Issues 9
  • 10. First Value proposition--not for everyone here Not a quick fix for your problems Way to separate yourself from your competition Way to change the dynamics of your business 10
  • 11. Why you want a Value Proposition Move past the price issue More sales / better sales Expand market reach Increased customer retention Higher profit margins 11
  • 12. Why Separate yourself from the competition Define who you are Define why a customer should select you 12
  • 13. Why Increase your importance to customer Make it painful to remove you (switching pain) Create de facto outsourcing 13
  • 14. Value Proposition How to frame your business Address a customer need / problem Why a customer should use you – has real value to customer Hint—it is not about lowest price 14
  • 15. Value Proposition Differentiate you in the marketplace Way to position and define your business Take more control of your business 15
  • 16. What It Is Sales AND operations approach In addition to core business About what customers need / customer centric 16
  • 17. It is Supply chain and/or company issue to customer Goes beyond the standard “win-win” of trading a low price for volume/business Goes beyond narrow logistics service and your 4 walls 17
  • 18. Is For potential customers AND for present customers Taking your business to a new level Way to create new capability in addition to core service Creating competitive advantage (do not worry about “copy cats”) 18
  • 19. Is Results focused—for customers Definable / measurable / quantifiable— even better 19
  • 20. It is not Something that defines or is about the basic service you provide Tag line / advertising slogan / mission statement / vision About freight About pallets 20
  • 21. Is Not “Daily special” Flogging asset utilization Value-added service (aka, giving away something for nothing) 21
  • 22. Note Single / same VP unlikely to appeal to all customers / prospects Match to customers 22
  • 23. I am talking Evolution Not Revolution In Addition To Core Business 23
  • 24. ALSO There is not “THE” one V.P. Just like there is not “THE” supply chain program 24
  • 25. Ask this Can you sustain your low price? Can you be the lowest price provider? If NO, then why are you playing that game? If NO, why do you not have a Value Proposition to better position yourself? 25
  • 26. V.P. Examples--Is Increase inventory turns by 25% Increase market share 2 points Lean solution to remove 20% waste from your supply chain 26
  • 27. Examples Improve your global supply chain performance by 15% Sigma 6 kitting and assembly will improve your quality by 10% 27
  • 28. Opportunity Potential Many rush orders / much expediting / much fire fighting!!! Freight can be a problem Freight can be a symptom of a problem!!! Inventory can be a problem Inventory can be a symptom of a problem!!! 28
  • 29. Example Too much working capital tied up in inventory!!! Real need is not “visibility” to what you store or transport Real need is something bigger and how you fit into it 29
  • 30. Examples--Is Not Low freight rates May not even involve costs Nice looking pallets For every customer 30
  • 31. How You Do It Listen—to what customers say Listen—to what customers do not say Identify customer pain issues / underlying problems / what is really important See the “big picture” and where and how you can fit into it 31
  • 32. How Stay focused on VP and the customer Do not let day-to-day chaos make you lose sight of VP Partner if needed—especially if service/capability is beyond your scope 32
  • 33. How Integrate with partner Realign responsibilities expressly for delivering VP results Collaborate and communicate well with customer Align operations to VP Integrate with customer 33
  • 34. How Understand the competition and what they “offer” as a V.P. Do not be intimidated by competition (may be large firms) that do not have a V.P. 34
  • 35. Then What can you do to help the customers? Not the usual things you say and do now Address real issue (again, it is not about you and your service; it is about the customer) 35
  • 36. Then Do proposals, not just price quotes Emphasize V.P. and state the benefits Be open to / propose new arrangements — such as JV 36
  • 37. KPIs About the customer—not you Ties directly to V.P. Should reflect the KPIs of the customer or its supply chain group Not micro-managed/task/work level Not metrics for metrics sake 37
  • 38. Questions Market positioning--where? Market size—how big? Cross multiple markets (reduces risk)? Competition? 38
  • 39. Questions Change in strategic direction? Sales and marketing strategies? Operations strategy? Funding? 39
  • 40. Issues with V.P. 1) Customer 2) Core Business 3) Delivering 4) Sustainability 40
  • 41. Customer Some focus only on price Would not understand or appreciate a value proposition Would change service providers for a lower price HINT: V.P. is not for those customers 41
  • 42. Core Business—Stay the Course Comfortable with what you do Even if it is a struggle “If we only…..”, then…… 42
  • 43. Delivering V.P. Define it well within company Energize/motivate the company Internal organization—present vs ?? Need for training Need for operational integration 43
  • 44. Delivering See “bigger picture” Add skills / partner with others Change is not easy 44
  • 45. Sustaining It Get employees committed to and involved with V.P. Recognize change management—an extensive topic Continuously improve performance Avoid backsliding 45
  • 46. Sustaining V.P. can give the company and employees an identity Change can be built on that identity 46
  • 47. Value Proposition Did not say it would be easy Did not say “you just….” Did say it can change the dynamics of your business Did say it will separate you from competition 47
  • 48. So? What will you do? Continue the same old / same old --OR-- How many of you want— Greater customer retention More sales Higher profit margin 48
  • 49. Final Value Proposition Comment It is not static Customers and markets and services change—only the rate of change is in question Your V.P. will and must change Look beyond your competition and your “comfort zone” for V.P. ideas 49
  • 50. ASK AGAIN How many of you have a clear Value Proposition? 50
  • 51. It may not be like this, BUT 51
  • 52. OR your business like 52
  • 53. Related topics for V.P. --For another discussion-- Branding Responding to competitors Gaining advantage over competitors Sustainable competitive advantage Making operational improvements last Business transformation 53
  • 54. Technology—IS NOT 54
  • 55. Technology--IS 55
  • 56. Technology—for V.P. Much more than “track and trace” Global End-to-end visibility Supply chain management 56
  • 57. THE END OR A NEW BEGINNING? 57