Freight Brokerage Business. The Staff of Entrepreneur Media, Inc.
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• Make it real. Whenever possible, use real-life situations to train—but avoid letting customers know they’ve become a training experience for employees.
• Anticipate questions. Don’t assume that employees know what to ask. In a new situation, people often don’t understand enough to formulate questions. Anticipate their questions and answer them in advance.
• Ask for feedback. Finally, encourage employees to let you know how you’re doing as a trainer. Just as you evaluate their performance, convince them that it’s OK to tell you the truth, ask them what they thought of the training and your techniques, and use that information to improve your own skills.
To protect yourself from an employee leaving you to start his or her own firm that directly competes with yours, you may want to ask everyone who comes to work for you to sign a noncompete agreement. Noncompete agreements typically consist of time, geography, and industry restrictions, and their enforceability varies by state.
Have the language of your non-compete agreement created by an attorney who is familiar with employment law before you ask anyone to sign it.
Keep in mind that even though your employees sign non-compete agreements, they may choose to violate them. Then you will have to make the decision whether or not to take the issue to court.
Ron Williamson sued one former employee, a salesperson who started his own company. “We won, but we lost,” he says. “It cost me about $32,000, and we settled out of court through arbitration, and recovered about $12,000 of that. I had to go to my customers and ask them to testify against this person. Noncompetes are tough, and they take an incredible amount of time [to enforce].”
That may be, but his willingness to sue helped when another former employee left the company. He started to violate the terms of his agreement but backed off when he realized Williamson would take action.
As you now know, just about everything must move, at least part of the way to its destination, by truck. With this in mind, it is safe to say that almost every company is a potential customer for you. But if you take that approach, you’ll have a tough time coming up with an effective, not to mention affordable, marketing plan.
What’s wrong with just going after anybody in the world who might ever have to ship something by truck for any reason? Because that market segment includes literally millions of companies and individuals, and it’s impossible for any small business to communicate effectively with a market that size. Can you afford to send even one piece of direct mail to one million prospective customers? Of course not. But when you narrow that market down to, for example, 500 or 1,000 potential customers located in a particular area, conducting a successful direct-mail campaign is much more affordable and manageable. In today’s business world, direct mail, however, is a more antiquated form of marketing that’s been replaced by online-based tools, resources, and social networking services.
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One of the most effective ways to build your customer list is word-of-mouth. Provide excellent service to your shippers and you will increase the likelihood that they’ll spread the word about your business to other shippers.
Keep these questions in mind as you form your marketing plan:
• Who are your potential customers?
• How many of them are there?
• Where are they located?
• How do they currently transport freight?
• Can you offer them anything they are not getting now?
• How can you persuade them to do business with you?
• Exactly what services do you offer?
• How do you compare with your competitors?
• What kind of image do you want to project?
The goal of your marketing plan should be to convey your existence and the quality of your service to prospective customers, ideally using a multifaceted approach that involves use of the internet, as well as targeted email.
Market research provides businesses with data that allows them to identify and reach particular market segments and to solve or avoid marketing problems. A thorough market survey forms the foundation of any successful business. It is impossible to develop marketing strategies or an effective product line without market research.
The goal of market research is to identify your market, find out where it is, and develop a strategy to communicate with prospective customers in a way that will convince them to use you.
Begin by focusing on two broad areas: the people and firms you work with directly, such as carriers and shippers, and the general business trends that affect the industry as a whole. With this information, you will be able to move on to more specific research that will help you determine your target market, where to locate your business, what services to offer, and your geographic scope of operations.
There are many valid reasons for choosing a well-defined market niche. By targeting a specific market segment, you can tailor your service package and marketing efforts to meet that segment’s needs. You’ll also develop a reputation for expertise that attracts new customers. For small business operators, marketing to a niche audience is one of the most useful features of the internet, as well as social networking services, like Facebook, Twitter, and LinkedIn.
One of the best parts of being a freight broker is that you build long-term relationships with most of your customers. Motor carrier freight service is rarely a one-time purchase; once a customer comes on board with you, you will likely get plenty of repeat business. However, most shippers use multiple carriers and brokers, which means you must take the time to find out as much as you can about shippers’s volumes and needs and provide consistent service so they are comfortable coming back to you, and you can increase your share of their business.
“We become an extension of our customers’ management style and/or traffic program,” said Smyrna, Tennessee-based freight broker Cathy Davis. “We have a much larger carrier base than they do and usually have better negotiation skills, especially if it’s a small shipper. We do the calling for them, which frees them to work on other projects. We know how to qualify carriers and have access to more information [about them] than the shipper does.”
You can design your niche based on geography (either location of shippers or destination of freight), types of cargo (agricultural, perishable, oversized, bulk commodities, etc.), size of loads, specific industries, or some other special shipping need. To choose a niche, first consider what types of shipments and/or shippers you enjoy working with. Then conduct market research to determine if there is a sufficient demand for the services you want to provide. If there is, move ahead with your marketing plan. If there isn’t, consider how you might adjust your niche to one that generates adequate revenue.
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