Transport, Freight & Logistics

If you’re a senior executive responsible for setting – and overseeing the attainment of – your enterprise’s corporate growth goals, I have a question for you: How informed are you on the individual contracts that comprise the overall total of your organisation’s business-under-pursuit? How certain are you that the priorities underpinning the prioritisation of current […]

Prominent social commentator of the Victorian era, John Ruskin, famously observed: "There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey." Ruskin’s words are nowhere more applicable than in the world of high-value tenders. With rarely an exception, those organisations that issue market calls with the sole or primary objective of sparking price competition (and getting a cut-throat deal), inevitably pay the price in some other form. That’s not news. But it doesn’t apply to all potential customer organisations . . . and the ones to which it doesn’t apply are, obviously, the ones smart transport operators want to be targeting. The trick is to give those organisations a solid reason – other than cost – to choose you . Differentiating in A Highly Commoditised Space You know what’s coming, right? You guessed it: The predictable admonition to differentiate your company and your offering on something other than price. That’s all well and good, but let’s take, for example, my readers from the transport sector (and other highly commoditised industries): When the competition offers exactly what you do and you’ve done everything you can – exactly how do you differentiate? The answer: You think from the client’s head. The point of self-focus from which the vast majority of bidders come when responding to an Expression of Interest (EOI), Request for Tender (RFT) or Proposal (RFP) renders it hard to see what’s most meaningful to the client. Sure, what the client wants is articulated in the selection criteria . . . but, in some industries particularly, these criteria can be pretty bald and (often, if the client documentation is template-based) not nearly as contract-specific as they could be. So . . . you have to dig deeper . Way below surface level. A Courageous Pursuit Recently I conducted a series of bid strategy sessions for a rapidly growing mid-tier organisation in a somewhat courageous pursuit for a certain type of contract with a very large mining consortium. After leading the senior management and the appointed bid team through a comprehensive and in-depth analysis of the competitive landscape, the surprised and humbled team made the collective observation that, “We’re not anything special after all. We don’t do anything more or anything different than anyone else.” I assured them they did. They had done something very different indeed by conducting a series of detailed, in-depth analyses of their prospective client’s world, of its priorities, and of their own capabilities in the context of their new-found knowledge. There’s A Tangible Value to A Client-Focused Bid That made them immeasurably different. Unlike their competition which would undoubtedly present the same old template-style, supplier-centric dross as everyone else, they would – through a now- deep understanding of their client – produce a bid that clearly demonstrated a superior knowledge of that organisation’s operating environment and challenges. Critically, my client would demonstrate that it had formulated its service proposal in direct (and comforting) accordance with these. A response of that quality offers a distinct and very real value to the procuring organisation . . . a value in terms of risk minimisation, frustration avoidance, value maximisation , and general peace of mind . And all of these, in turn, ultimately have a monetary value – especially in a long-term service provision contract.

Of all industries, the freight and transport sector is arguably one of those most at risk of its services being viewed and treated as commodities. It’s a depressing reality for the industry, but there is an answer. If a company struggles to differentiate its product or service from that of its competition, the first element of any corrective strategy should be to seek to understand its prospects and its clients at a deeply detailed level. Not all companies do this well. Most don’t – regardless of any conviction to the contrary. Why am I confident to make such a sweeping statement? I see the evidence on a daily basis as a bid strategist and writer, and as an evaluator and bid coach. When I take on a new client, almost without exception, that organisation’s written proposal materials speak for themselves in this regard: Most companies take a heavily self-centric perspective in responding to tender calls, or in producing any other form of bid or proposal. And those that think they don’t, are always surprised to learn just how much further they could go in taking (what they thought was) a client-centric approach . . . and, in the process, de-commoditising themselves far more effectively. Symptoms of Self-Centricity In this post, I’m going to focus on how a self-centric perspective shows up in a bidder’s documentation. In order to give very specific and “graspable” examples, I’m going to focus on just one part of a bid document: the Executive Summary . This front-piece of a bid, tender or proposal is where the bidder’s client-centric – or, alternatively, its self-centric – approach shows up loud and clear. In the following commentary, I provide just two examples that literally whack a tender evaluator between the eyes with a bidder’s self -centricity. I’m going to highlight the underlying problem , and let you, yourself, go deep-diving for the many Pursuits Academy posts that provide solutions. Understanding the problem before looking for the solution, however, is critical. Without an understanding of what “wrong” looks like and why it’s wrong, “right” isn’t so easily identifiable nor the logic behind it so obvious. Example 1: ‘We, Our, Us’ I once evaluated a bid, the Executive Summary of which featured the seller’s name no less than 17 times in a short series of introductory paragraphs. You might laugh at that, but a large percentage of Executive Summaries end up with the seller’s or service provider’s name (or “We”, “Our” and “Us”) at the beginning of most paragraphs. This indicates a lack of knowledge, understanding and caring about the client organisation and its issues and priorities, as well as a lack of listening skills and a probable low “care factor” on the part of the bidder. The propensity for a bidder to communicate in such a way that the world revolves around them i.e. the supplier or service provider, rather than around the prospect / client makes it obvious to the client and its evaluators that the entire working relationship is likely to evolve in this same, very predictable, direction. This – in the client’s mind – places that bidder in the same self-focused category as the majority of its competition. And this, in turn, relegates it to a largely undifferentiated status. Example 2: Not Framing Strengths in A Meaningful Manner Most Executive Summaries focus almost exclusively on getting across the bidder’s strengths, and perhaps the uniqueness of its offering within the competitive space in question. Few, however, investigate and explain the specific relevance of these to the client, and within the current environment in which that client organisation is operating. Some Executive Summaries do start out in reference to the client, but only as a prelude to a monologue about the bidder’s own capabilities and credentials . . . still not taking the time to fully draw out the client- or contract-specific relevance of these. This comes across as arrogant. Not a desirable trait in a working relationship. Worse still, it comes across as cloth-eared arrogance, to any prospect that may have had discussions about its issues with a bidder, and that could reasonably expect to see the key points of those conversations reflected in a proposal. If nothing else, though, it’s a wasted opportunity. Regardless of any information requests made in a client’s tender call documentation, the client’s interest in the service provider centres around the relevance of that information to its own organisation, priorities, issues and potential contract with the bidder. So let’s come back to de-commoditisation. The extent to which your company, as the bidder/service provider, can demonstrate (a) a relevant and competitively superior understanding of the client organisation, and (b) how your strengths and the aspects of your offering uniquely position you to solve the client’s problem and/or achieve that organisation’s desires, is the margin by which you’ll be out in front of your competition. And the extent to which you are out in front of your competition (on elements of your offer other than price) is the extent to which you have successfully differentiated your company and differentiated your service or solution. In turn, the extent to which you’ve differentiated and de-commoditised, is the extent to which you free yourself from the price trap into which most operators in heavily commoditised industries – like freight and transport – otherwise fall.

"De-commoditisation" is the practice of creating a meaningful competitive difference or positioning in order to avoid (within reason) the need to compete on price. It represents a critical element of a non-price-driven business (and bid) strategy. And it’s THE answer for the small operator faced with overly-hungry and cost-advantaged competition. There’s a multitude of available strategies for achieving de-commoditisation, but better still is the fact that – whatever that number may be – it increases exponentially when investigated in the context of any specific industry and geography. One simple (and reasonably generic) strategy for de-commoditisation is to move to a new, heightened and more client-centric level of service. This is often the secret of the small company that successfully hangs onto contracts in the face of deep price-cutting by larger competitors. These operators – almost unconsciously – apply a reasonably uncomplicated formula: they understand their clients not only at the higher, “bigger picture” level but also at the “on-the-ground”, operationally-detailed level. They understand, genuinely care about, and act upon what’s important to the client. And they make themselves indispensable by virtue of their resultant, highly personalised – and thus highly valued – service. Let’s take, as an example, arguably one of the most commoditised service industries of all: freight. Applied to our freight sector example: This type of operator is the freight company that will do whatever it takes to make no deliveries before 4pm . . . if that’s the client’s stipulation, and that checks in regularly with the client to ascertain what is and isn’t working about their service. And, staying with the freight company example, if they are told – or discover for themselves – that there’s an issue with breakages, they’ll implement new loading and other forms of procedure to prevent these. Perhaps most importantly of all, this more diligent type of operator takes these measures proactively i.e. before (rather than after) the fact. They do it, not simply because they’ve been instructed to, but because they know and care that that’s what works best for the client. Building rapport with the client organisation and the people, processes and roles they’re interfacing with has become a natural and central part of their modus operandi. And still with the freight and logistics example: It’s the operator who continually hones basic practices like punctuality, diligence in paperwork, and top-notch presentation. It’s the company with management that makes sure everything is done or delivered on time, that documentation is detailed and error-free, that its drivers are properly attired, and they’re driving trucks that look brand new because they’re washed after every trip. It’s the operator whose drivers are friendly, professional and well-presented . . . the operator who will never allow even one instance of denigration of its brand by allowing a blue-singleted driver to load food into the back of a supermarket. It’s these elements of an SME’s performance that ensure it not only holds its own in terms of marketplace credibility, but can differentiate, cumulatively, “by detail”. Because the client notices.