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Transborder Trends

Defining Innovative Customer Solutions

by Keith Hart

Defining excellence in the services that logistics companies offer to their clients can be far from a simple task. Not only is this a quickly moving target, it is a target that can only be seen through the eyes of the customer.

In the service industry the tangible aspects or attributes of a service, if likened to a product, are as not as easy to observe and identify as physical objects, but the results are very clearly appreciable. So for a service provider, comparison between one’s own offering or product and that of a competitor is often more difficult to discern.

In the transborder business it can be said there are a number of basic requirements that are common to all customers. These include on-time delivery, products delivered in good condition and complete delivery, access to information, and prompt and accurate billing. These basic elements also apply as maxims for business in transportation generally. So it is in these areas that carriers tend to measure themselves and their services. Many service providers offer performance reports to measure their capabilities and provide evidence of their performance. I would, however, suggest that these requirements could be likened to the wheels on a car in terms of service or product excellence. They are essential. I’ll refer to them here as level-three requirements.

Clearly, there are participants in the market that struggle below this level. But most carriers worth their salt should have a performance rating in the high nineties when it come to these basic functions.

Outside the core requirements there are other areas in which a service provider can help make the client relationship a success for both parties. In today’s competitive environment it is critical that a service provider examine and understand the entire customer experience. This consists of many and varied elements in terms of the interface between the service provider, the customer as well as the customers trading partners. I refer to these as level two requirements. They are the things that go beyond transporting products between two points. To take my automotive analogy further, this is where you enjoy the look and feel of the car.

The knowledge and diligence of the provider’s account managers, coupled with the client solutions they convey to effectively address their customers’ unique requirements, particularly in the inaugural stages of a transborder service relationship, are vital. It’s just one example of what of what we refer to as level-two requirements.
These softer issues can represent a good part of a company’s competitive edge. Let’s refer again to the account manager example. If the account manager was to call on the customer every six to eight weeks and the customer’s expectation was that he or she needed to meet on a bi-weekly basis, then we have just identified a service gap. It’s an opportunity for improvement. Points could easily and needlessly be lost to the competition due to the carrier’s failure to get on the same page as the customer with regard to this issue.

This is not to imply that all service providers should try to be all things to all people. Sometimes it is necessary to concede and focus on marketing to customers in a more focused manner. The service provider needs to be mindful that in these instances the elements beyond what they offer are not “hot buttons” or crucial elements to the customer. In other words, it is important to focus on core competencies and strengths to benefit the customer and meet expectations.

A supermarket, for example, would have a tough time trying to create the same customer experience as a specialty store when it comes to selling fresh ground copy coffee by the bag. While the former may have price on their side, clearly the latter have other advantages in terms of making the purchasing of coffee an enjoyable activity. The supermarket could look at the aspects of the customer experience that are controllable and decide they want to respond by attempting to narrow the competitive gap by introducing specialty displays and a fresh coffee aroma instead of competing purely on the basis of price. On the other hand, they may opt to focus their efforts by sharpening their saw in terms of a customer experience’s by primarily addressing the issue of price, as this is their customer’s main consideration.

I started this article by discussing the meeting of elementary customer needs as well as the need to develop an understanding of the whole customer experience in order to optimize business and provide comprehensive customer service. There is, however, a further hurdle on the road to the next level, namely, level-one service excellence.

The ultimate goal can be found through the delivery all of the noted ingredients. But it is also noteworthy that with such innovative solutions afforded by the service provider, this often changes the way in which the customer does business and changes their own competitive advantage. This not only secures the support of the customer as a true supply chain partner. Ultimately, it can lead to the creation of new markets.

An exemplary innovative first is in the express package business. These companies could readily be referred to as the creators of a new market when they provided opportunities for customers to change their logistics practices by supplying a totally new utility.

The bundling of services by customs brokers and forwarders in offering tailored transborder distribution product to non-resident suppliers is another case of this practice, namely facilitating a service and business that was previously unavailable. In both cases, the markets grew and both customer and supplier enjoyed the benefits of the successful delivery of a new innovation.

The bar will continue to be raised in terms of customer’s expectations in the future. Not surprisingly, the importance of addressing all aspects of the customer’s experience in order to simply remain on the playing field will continue to be heightened. The leading service providers of tomorrow will be those who can effectively develop and quickly deliver solutions to maintain a leadership position. Their true measure is in developing innovative solutions to create competitive advantages for their customers.