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Fuel for Thought

Reduced Rate For More Revenue

By Greg Huggins
Posted Sep 16th 2019 7:21AM

Finding and keeping new customers can be a challenge for just about any business, but for the owner operator, this can be even more difficult.

Give a little

Ever notice how many larger businesses will offer a lower price on a product or service for new customers? There is more to it than just the lower price. It is more difficult to get a new customer than to retain a current one. Think about your own habits and you will probably find that you tend to frequent known businesses over the unknown. So once you have become a customer, chances are you are more likely to return given the initial interaction was favorable to you. That lower price was not at a loss, but a way to entice you to become a patron of the business. 

Get so much more

When you create value for the prospective customer, it can open the door for the opportunity to establish a working relationship and lead to future business, given that you follow through with your initial opportunity and prove to the new customer that you can deliver on your promises. This can add value to your services which can lead to higher revenue per load.

Drawing the hard line

As small business owners, we have to watch our balance sheet and know our operating costs in order to know (1) our expenses, (2) our breakeven point and (3) our profits. If you know your breakeven point, you will know exactly how much you can offer your services to a new customer for with a reduced rate, but not at a loss, and get your foot in the door for future business. When you draw a hard line with a new customer, you need to know if it is sustainable or not. Reducing your usual rate to gain business is not giving your services away, but rather it is staying competitive in the market you operate and could gain you more business at much higher future rates if you also deliver on your promises.

Do the work

Getting that opportunity with a new client is hard enough, but once you get the opportunity, you have to follow through. Going above and beyond expectations will likely lead to many more opportunities.

All of the above is irrelevant

If you don’t know who your customer really is, all of the above is irrelevant. If you are an owner operator with your own authority and direct customers, you know exactly who they are, but if you are leased to a carrier, who is your customer? The shipper? The consignee? Dispatch? Yes. Consider that the shipper is your customer since they have the goods that need to be hauled. The consignee is your customer also. Many times it is the consignee (receiver) who is paying for the goods to be shipped. Dispatch, how is dispatch at your carrier your customer? If you have a bad relationship or poor performance, why would your dispatch trust you with the better opportunities? Without dispatch you will not get to the shipper or consignee.

 

Work together to solve problems and everyone can benefit. 


Know your numbers, be flexible and professional at all times. 


See you down the road,

Greg

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