Railway Age, July 1993

Go See the People

Off the top of my head, I can give you three good reasons to make a personal visit to your customers and prospects:

If you're there, they can't be talking to your competitors. You can't see what they do without going there. And you can't ask for the order if you're not there.

This is the last thing the weary short line manager, who's already struggling to balance the demands of track, motive power, staffing, and regulatory compliance, wants to hear. But the payoff of seeing the people is increased freight revenue -- more money to make dealing with those other pressing problems a little easier. And to make the job of seeing the people itself just a little easier, here's a guide that helps you decide who to see, what to look for, and what to do with the information you get.

1. Who to see.

Target your customers first. Customers represent the best use of your time. To start with, you don't have to explain who you are; they've already bought so they know something about what you're about. What they don't always know is the way you can be flexible to help them.

For instance, in just three days of calls one short line found several customers who could increase their rail traffic right away. By going to see the people, the short line found they could build business by supplying one customer with a ready supply of empties, another with a more dependable distant source of raw material, and a third with a more flexible contract arrangement. But it took seeing the people to make it happen.

In the short line business, where margins are often razor- thin, the cost of putting someone on the road looms large. The danger is that in counting the costs of calling, you don't take into account the cost of not calling.

The biggest cost of not calling is lost business. Like the railroad that didn't stay on top of the customer with an "automatic" move of ten cars of phosphoric acid. The year the cars got lost and the railroad didn't see the people, the trucker did--and was there on the spot when the cars got lost, saved the farmer's fields, and won the business away from the railroad. New or increased business-that's the payoff of going to see the people. Just ask Superior Carriers' director of sales, Don Hannon, whose truck freight sales have ballooned more than 50% in the past three years, even in a down market.

2. What to look for.

Good, fast, and cheap. In any business transaction, you can pick any two. Unfortunately, many buyers think they can have all three.

One customer wants cheap and fast. He hires the bottom-tier carier and then complains about his product being contaminated by dirty equipment. Another wants cheap and good but complains about how slow it is. A third wants (em>fast and good but complains about price.

The astute customer service rep can tell what kind of buyer he's got just by looking at the place of business. As Yogi Berra says, "You can see a lot just by observing."

My rule of thumb is that the better the physical appearance of the plant, the more astute the purchasing practices. You can bet that where things are ratty around the edges, they're cutting corners--probably by beating up on their suppliers. If you can't sell cheap, you can't sell anything. On the other hand, if everything has a coat of paint, the work areas are clean and the machinery well-kept, they understand quality. You can talk in terms of value, not price. You can talk in terms of logistical solutions, not a shipment of goods from A to B. This buyer will understand that good and fast have a cost, too.

It's been proven that a manager is only as good as his market intelligence. The best way to gather intelligence along your railroad is to go out and look. Yogi was right.

3. Who to work on.

Sooner or later, you want to ask all these people for the order, of course. But first, use your market intelligence to segment your markets. You've gone to see the people, and you've seen a lot just by observing. You know who can use your services, who's apt to be the best (and worst) customer, and you know who's likely to have a sustainable, profitable business.

Here's one way to segment your customers:

In this example, you work on delivering logistical process value for your "build" customers. You support your "hold" customers as long as you can do so profitably, and when you can't, they become "harvest" candidates: provide the minimum service you can, concentrating on minimizing your own risks.

The object of the game is to make the strong stronger, replace harvested customers with new ones you can build, and encourage the hold customers to go one way or another.

But to know which customers and prospects are which, you've got to go see the people.

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Created July 31, 1995. Send comments to lblanchard@aol.com