Every shipper we talk to confronts mountains of emails and cold call pitches. Most of them tout the ability to access any asset, with 100% OTP, 99.99% OTD (“See, we aren’t perfect!”), and 100% TA on every lane. There is very little differentiation or substance to these pitches, which are easy to ignore at the best times.
And the reality is that shippers have no shortage of options for asset-based capacity at favorable rates right now.
It’s exhausting for brokers.
Making sales calls daily and trying every tactic in the book to land new clients in this market is taxing. You struggle to find ways to stand out in a sea of brokers seemingly offering the same thing.
In an increasingly data-driven decision-making era, these old strategies underutilize data that should be readily accessible in your TMS. And even if the data is available, these systems fall short because they inherently lack objectivity, making it hard to prove where and why you’re indispensable relative to the incumbent. We don’t have a FICO for freight performance, which we desperately need.
With solutions built for load execution, not load intelligence, this freight recession shows that it is time for a data-driven transformation to how we do business.
Why this Freight Recession is Different
According to FreightWaves, domestic truckload volumes are the highest they’ve been all year, so consumer demand isn’t the reason for this market. Instead, an overabundance of capacity has persisted even through the layoffs and bankruptcies this year.
Digital brokerages are helping to match trucking capacity’s long tail to loads they wouldn’t have had access to before. Doing so results in smaller trucking companies staying afloat while capacity remains despite challenging conditions.
This pattern may be signaling a new normal for freight recessions. Many brokers find themselves expecting to see what they’ve seen in countless markets before: “Surely prices have bottomed out, or consumer demand is on the verge of spiking, right? Some of this excess capacity is going to leave the market soon. It HAS to!”
But do you have time to wait it out? And for how long?
Strategies To Differentiate Your Brokerage In Today’s Freight Market
While many brokers have struggled to survive this downturn, others are gaining ground. What makes these service providers, digital or otherwise, different? It comes down to their ability to successfully demonstrate the answer to that question to shippers.
To excel in this “new normal” of the recessionary freight market, brokers must adopt modern, data-driven strategies that set them apart. Here’s a blueprint to help you confidently and objectively differentiate your brokerage services with data:
1. Develop a Comprehensive Understanding of Service-Level Performance
You can’t manage what you can’t measure. Many brokers have the technology to collect service-level data across their carrier network properly. But simply collecting data on each shipment is just a start. Brokers that get ahead are the ones that are more likely to invest in advanced tools and mechanisms to measure service-level performance and extract and operationalize insights on their strengths and weaknesses.
Suppose you lack visibility into service-level performance data across your carrier network. In that case, you’re relying on tribal knowledge and price alone for decision-making. To break free from this methodology, brokers must build a Business Intelligence (BI) process or function to collect and clean service-level data from their TMS for every carrier, lane, and customer. Implement carrier and customer scorecards based on industry-standard performance KPIs and establish a record system accessible to the entire team.
2. Determine Your Strengths and Weaknesses Against the Market
Once you have readily accessible data on your performance, you need to add outside context to understand better where it puts you within the broader freight broker landscape:
- Use standard performance KPIs – Ensure you measure and define your service-level performance based on the most common or standard methodology available.
- Leverage Industry Benchmarks – Compare your KPI performance with industry data to identify strengths and weaknesses. Utilize a carrier scorecard system like ISO or external consultants and analysts to access comprehensive industry benchmark data.
- Competitive Analysis – Analyze competitors’ strategies and performance using whatever data points you can find. You can glean a lot about what is most important to a competitor by what they post on social media, the tradeshows they attend, their digital marketing strategies, and what you can glean from your customers.
3. Create a Strengths-Based Sales Strategy
With both internal and external data as your guide, develop a company-wide strategy to capitalize on your objective strengths:
- Pinpoint where your brokerage excels. Ask questions like, “What are my top five strongest lanes?” or “Which industries or verticals do I excel in?” Drill down further to understand where you outperform the market for specific customers and consignees. Your organization should know where they are strong and where improvement is needed based on performance data and available benchmarks.
- Develop marketing strategies based on your strengths. Use scorecards to pivot your performance data for each of your top customers. Where have you delivered above-average performance compared to the benchmark? Which power lanes are emerging? Target your sales outreach to share this data with shippers that run these lanes and earn more business in the areas where you are objectively strong.
- Leverage your strengths to build strategic partnerships facilitated by collaborative tools that enable you to share performance results with shippers and carriers proactively. These alliances help establish a clearer understanding of your value, create trust, and drive mutual growth.
4. Transform Your Company Culture
The insights you glean from your data must trickle down to your operators. Executives must lead by example and prioritize data-driven decision-making from the top down. Here are a few tips you can leverage to create a data-driven culture:
- Put the Data at Your Team’s Fingertips – Too often, data hides behind a team of BI analysts or data scientists with specialized knowledge of databases and tools like Tableau or Power BI. However, the right technology solution will enable your customer and carrier-facing teams to self-serve real-time data.
- Training and Education: Invest in training programs to ensure your team can access and interpret your data effectively. If you throw a new solution or process over the fence without training your reps, you can safely assume nobody will touch it.
- Mandate Better Collaboration Between Teams – Your carrier team must understand each customer’s needs to deliver the best match on their freight. Instituting cross-functional meetings or touchpoints for the teams to review and plan around that data is even better.
- Incentivize Your Reps to Leverage Performance Data – In a margin-driven business, money will always be a safe bet as the best motivator. Implement an incentive program based on both service level and margin improvement. Create a weekly, monthly, or quarterly performance review for each team member, leveraging the scorecards you roll out.
Unlock Your TMS Data to Gain a Competitive Edge
Ready to unlock your data and differentiate your offering from competitors? ISO can be your trusted partner on this data-driven journey. Contact us today to learn about our IT-light, easy-to-use performance benchmarking and scorecard solutions that can serve to speed up your transition from “tribal knowledge” to “data-driven.”