Small and mid-size logistics organizations have built much of their customers based on relationships, networks, and word-of-mouth. Although this strategy has proven effective for building lasting relationships, at some point, using this approach alone will end up stalling the company’s growth.
Growth lulls often go hand-in-hand with sales problems. These can either be problems within the sales team or the problem could be you don’t have a sales team at all.
If the company does not have a dedicated sales team or at least a semi-dedicated person doing sales on a consistent basis, its growth potential will be limited.
But if the company has sales activities (either a team or just one person) and the efforts are not gaining traction or paying off, then it's time to look a bit deeper at what is holding back your logistics sales operations.
1) Unable to Generate Leads Consistently
Lead generation. This buzzword is passed around a lot, but what is it really? Well the name speaks for itself. Lead generation is the process of getting leads for potential sales opportunities.
In logistics sales, it’s common to associate lead generation with networking and referrals. While this is one way to do it, it’s not the only way to get leads into your business. Lead generation could also be through your website, marketing, advertising, and so much more.
Source: Logistics Marketing Advisor
A common problem among logistics sales is leads not being generated consistently, or worse, no leads at all. Sales growth (and business growth for that matter) is directly proportional to the ability of the business to capture sales leads and convert those leads into customers.
To overcome this challenge, companies need to develop inbound and/or outbound strategies to generate a steady flow of leads. Once leads are generated, the next step will be to identify whether the lead is a good fit for your business and convert them into a prospect. Then later into customers.
2) Low Conversions Rates
Another problem in sales can be seen when the company fails to convert leads into customers or is converting at very low rates. The truth is, you can generate a million leads per month, but if those leads don’t convert into customers you’re wasting precious time and money.
The most common causes of low lead-to-customer conversion rates include:
Lack of Trust or Reputation. If leads don’t perceive the company as trustworthy, they won’t be willing to do business with the company. At the same time, if the company lacks the reputation in the market where it operates, this will also impact trust. Trust and reputation are key determinants in the logistics industry and an essential part in converting leads into customers.
Unfit or Unqualified Leads. Very often companies buy databases of potential customers and bombard them with unrequested emails and phone calls. Not only could this practice could hurt the business’ reputation, but it will also result in a huge waste of time and money. To avoid this, qualify leads before investing time and resources into communicating with them.
Lack of Differentiation. Believe it or not, if a lead does not perceive an added value when doing business with a company, they will have no problem going with someone that comes with a lower price. Logistics service companies must be loud and clear with how they are different from their competitors.
3) Inability to Forecast Sales Volumes
The inability to forecast sales volumes is probably the most important problem to pay attention to. Without knowing how much sales to expect, the business is not only unable to estimate business growth, but also incapable of guaranteeing flawless service, because it lacks proper planning and budgeting.
Although forecasting sales volumes might seem impossible, the truth is it won’t be perfect, but it is fairly doable.
Having a consistent method and proper systems to support sales and marketing efforts will yield a healthy sales pipeline that will allow the business to make fairly accurate sales predictions.
Logistics sales is no easy task. But you need to be aware of big issues that can hold back your business growth. Inconsistent lead generation, low lead-to-customer conversion rates, and not being able to forecast sales volumes are 3 clear signs that your logistics sales department needs improvement.
If your company is experiencing sales issues, it is not alone. Most small and mid-size businesses are facing the same challenges – and here lies an opportunity for your company. As Mark Lakeman said:
Most problems are simply missed opportunities. The flip side of every problem is a solution.