How to lose a customer: 5 tips for logistics suppliers

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A new customer is a great news for a supplier of logistics services. It means a new source of revenues for your business, so it´s very important to do what is necessary to assure that at the end of your contract the client will decide to renew and keep working with you.

Fortunately I have been the customer the most of the time since I started my career; in the middle, many suppliers have not covered the expectations and I have had to change them.

What are the reasons that make a customer decides to cut a supplier? I will list the most important reasons that have led me to discard a supplier.

1. Communication

If you want to lose your contractor don´t communicate, there is nothing more annoying than a bad communication. For a logistics follower is important to know where the material is during the whole transit, so you have to be sure that you have the information and that your client is receiving it. Accidents in the highway, tire punctures, deviations to the planned route and other risks of delay must be raised to the customer´s attention, because those circumstances can change the original planning of the supply chain and a production plan.

Some suppliers offer a tracking system in their websites with very detailed reports, thanks for that! But, as I said, you have to confirm that the follower is receiving the information, most of the times the client doesn´t have opportunity to check the website, in those cases a call is well appreciated.

2. Poor follow up

If as a carrier or 3PL you do not understand that your users need answers and that you are the provider of those responses, you will lose the business. Logistics is about visibility during all the transit, it is a big challenge mainly in international operations because some connections could cause losing the tracking of shipments (GPS or communication infrastructure could change from one country to others, for example). Therefore, the ability of your company to maintain a good level in your follow up is an added value that the client will thank.

3. Limited supply base/equipment

When you have to sub-contract a logistics partner to meet the demand of your customer, commonly for 3PL and international carriers, the reliability and variety of your supply base will help you to offer a better service.

Having a logistics partner in the north to cover your demand in the south is a good idea if you don´t want more contracts. It means more expensive rates, higher times of delivery, difficult communication, etc. Definitively you will give an easy choice to logistics buyers to discard your company in next opportunity. Take care of create a solid and trustable supply base and work close with them to develop the level of service that you want to offer to your clients.

In the case of transport suppliers, the lack or poorly maintained equipment can cause the same effect of a low-level supply base. It´s very recommendable to keep the fleet size in good conditions and avoid that this point becomes a concern for customers.

4. Lack of a culture of continuous improvement

Listen to a supplier arguing excuses instead solutions is frustrating, do it to lose a client. You have to adopt a quality system that allows your company transform your errors in opportunities. An adequate procedure to find root causes and a close follow up to implemented actions will enhance your position with your customers.

We all know that in logistics the threshold of error opportunities is big, we are susceptible to commit mistakes, but the important for a customer is how the suppliers react to each case, how they solve it and what they do to avoid falling again in the same situation in future.

5. Price

Everybody is chasing savings. I confess that I don´t think that price is the main point of competitiveness in logistics (that´s why this is the 5th point of this list), but at the end there must be a good balance between service and price (a cost-benefit analysis). The questions to respond are: Is my customer receiving the service that I promised? Is the service equivalent to the price of my product? Negative answers will make you run out of customers.

The keyword in terms of pricing is: efficiency. Efficient processes mean more competitive prices. I mean, supplier has to find how to do more with less resources, because nowadays the best routes are reachable for all and we all pay fuel surcharge; the difference is in the creativity of suppliers to find opportunities along the supply chain.

Well, don´t follow these tips and keep your customers up.

Thanks for reading, for your likes and comments.

Alan Rodríguez

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13 thoughts on “How to lose a customer: 5 tips for logistics suppliers

  1. Love the perspective: “Logistics is about visibility during all the transit…”

    At the end of the day you are the carrier of a product and the “eyes” of the owner over their product.

    Like

    1. Thanks for your comment Anne! Yes, text is mine. In the about section you can see the disclaimer (alanrodesp.wordpress.com/about). I will post texts properly quoted very soon, keep reading

      Like

  2. Excelentes consejos para los proveedores de servicios logísticos, personalmente siempre he pensado que el “factor humano” influye mucho en la calidad del servicio, estar cerca y pendiente de las necesidades del cliente nos aporta ideas para mejorar nuestros servicios continuamente.

    Like

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