Trucking Companies have Low Profit Margins. Why not add 10% or More....Now?
Updated: Aug 28, 2018
Trucking companies are part of the backbone of our economy. We cannot live our daily lives without them. However, the industry has notoriously low profit margins? This can happen in markets that are saturated with a large number of suppliers. So, it goes without saying that managing expenses is critical to drive healthy profit margins for businesses like trucking, logistics and transportation.
I own a call center business. Companies outsource to us because they do not want to manage and pay for the labor expense and administrative headaches of operating their call center. Simply put, it is expensive to build, staff, and operate a call center day and day. The largest expense is labor, in the form of Cost of Goods Sold (COGS). The COGS tied to a call center in the US can equal 50% or more! So, this simply means there is a lot of money to be saved if implemented differently. Many organizations in low margin businesses justify operating their own internal call center because they believe that "customer service" is what sets them apart in their industry. And, to some extent, this may be true. However, it is also one of your largest expense items on your P&L. So, by outsourcing your call center to the right partner (I emphasis "right"), you can literally add 10%+ to your margins. And, more than likely, by partnership with the right call center company, you will improve your your customer satisfaction (C-SAT) and support vs. trying to do it all "in house."
Why, because companies like EGS are run by executives with over 200+ years of combined call center experience. We know how to deliver exceptional results and experiences because this is our business. Just like transportation and delivery is yours. This is what we do. We live, breath, and love the "Customer Experience."
So, what makes for the "right" call center partner? Especially if you've never outsourced some (or all) of your customer support. Consider the following:
You need a smaller, entrepreneurial call center partner. Why? Because they are flexible, easy to work with, and will make important decisions fast. Decisions which will impact your business. Large call center partner are rigid, stuck in their processes, and do not truly value a clients business less than 100 employees (reps handling calls). They will force you to "conform" to their processes, when in reality the partner should conform to your processes and to your customers. They are the wrong "fit" for you.
A partner that say to you, "to start, let us simply handle those calls that are the most difficult to staff for. And, the most expensive." This often means you start by outsourcing your weekend support, overnight support, and maybe support during "peak" call volume days and hours. This way you "tip toe" into the relationship, and you get to know your partner (and vice-versa). You make sure all processes are working before you expand. this just makes good business sense.
A partner that makes the contract terms simple, easy and hassle-free to start and build a new relationship. Most companies in the call center industry want commitment of 1 year and even 5 years. Now, this can be good for both parties if they are familiar with outsourcing. However, I suggest that the parties start a six (6) month agreement, which auto-renews for another six (6) months if both parties agree. This means you can get out of it if you happened to choose a partner that is not the right fit performance-wise, or culturally. Keep it simple. Make it easy to do business and to get to know each other.
Lastly, a call center partner who has very low call center agent attrition (turnover). As you may know, agent turnover can be very high in call centers (internal and external). Focus on partners who have very low "annual" employee attrition, less than 20% a year. This is critical to both quality and cost.
Operating an internal center is expensive, and staffing and managing it is challenging and exhausting. Find a partner who meets the criteria above, and you are off the races fast to improving your profit margins (and C-SAT), which will further differentiate you in a competitive trucking industry.
To learn more, email me or call me and let's discuss for 15 minutes. We are experts in this space and can help you in any number of ways.
Steve Shefveland, Founder/CEO, Emerging Global Services, LLC, firstname.lastname@example.org, 602-312-8900, www.emergingglobal.com