In this drawn-out recession, the best tool to improving your bottom line is selling your services at a rate with which you can sustain or improve your market share. How you approach each negotiation and the techniques you use determine your success in landing or keeping that hauling agreement.
The most important step in the process is to be prepared. Do that by knowing all the facts. Learn about the financial situation of the company or broker you'll be dealing with and know what questions you may be asked. Be prepared to back up your answers with facts. It's also important to keep your cool. Don't let emotions take control of the situation. And remember to be courteous, regardless of how the discussion unfolds.
It's also critical to have set specific goals, which must be met to continue the discussion, including having a final destination mapped out. If the objectives aren't being met, have an exit strategy. Never give up something without getting something of equal or greater value in return.
Enter the negotiations with a written strategy. Practice it, know it inside and out, but don't forget to listen. In fact, listen more than you speak and never volunteer more information than you need to at that point in time.
When dealing with current and potential clients, it's important to remember a few basics:
-
Know your current break-even point.
-
Establish a hauling rate range based on your break-even point.
-
Know the load-to-truck ratio of the area in which you're negotiating, and the destination area where the load is going.
-
Set a rate range for the freight you're negotiating to haul to help you land the best rate.
-
Know the facts and details of the load before providing a rate. This will allow you to provide a quote that is more than fair.
-
Once you have all the required information, have calculated your rate and provided the customer with it, be prepared with a clear explanation of all costs involved to provide the service.
-
Never provide customers with your lowest rate. Make them work to get a rate lowered by providing you with an incentive, such as multiple loads, return tonnage, etc.
-
Negotiating hauling rates works like the law of gravity: It's easy to lower a rate but next to impossible to raise one.
-
Always do a credit check before agreeing to haul a load for a new customer or broker.
For negotiations to truly work, there must be a desire and effort to be fair and equitable on both sides. Respect one another and with everyone working toward the mutual benefit of all parties, a long-term, win-win arrangement is a done deal.
Contact Tim Brady at 731-749-8567 or at www.timothybrady.com
