I
n my last column I stressed the importance of “decommoditisation”: the practice of creating a meaningful
competitive difference or positioning in order to avoid
(within reason) the need to compete on price. This represents
a critical element of a non-price-driven business (and bid)
strategy, and I’d like to progress it in this, my second column.
With the mining boom continuing to taper off reasonably
sharply, and rate cutting well and truly under way, it’s a timely
issue. Many new transport operators (a heavy percentage
of them, large) entered the WA scene when mining was
in full swing. These entrants now have the challenge of
keeping their machinery rolling, if they’re not to jeopardise
the substantial investments they made here. Those that
are branches or subsidiaries of national operations are, of
course, blessed with comparatively deep pockets. It may not
be their ideal, but they have the benefit of being subsidised
by their interstate operations where necessary.
Thus, it’s not exactly a level playing field for smaller
competitors. The answer for the small operator faced with
overly-hungry and cost-advantaged competition?
Once, again: de-commodisation.
There’s a multitude of available strategies for achieving
de-commoditisation – but, better still is the fact that –
whatever that number may be – it increases exponentially
when investigated in the context of any specific industry
and geography.
One simple (and reasonably generic) strategy for decommoditisation is to move to a new, heightened and more
client-centric level of service. This is often the secret of the
small company that successfully hangs onto contracts in the
face of deep price-cutting by larger competitors.
These operators – almost unconsciously – apply a
reasonably uncomplicated formula: they understand their
clients not only at the higher, “bigger picture” level but also
at the “on-the-ground”, operationally-detailed level.
They understand, genuinely care about, and act upon
what’s important to the client. And they make themselves
indispensible by virtue of their resultant, highly personalised
– and thus highly valued – service.
This type of operator will do whatever it takes to, for
example, make no deliveries before 4pm . . . if that’s the
client’s stipulation.
This type of operator also checks in regularly with the
client to ascertain what is and isn’t working about their
service. If it’s a mining client, are parts arriving unbroken?
If they are told – or discover for themselves – that there’s
an issue with breakages, they’ll implement new loading and
other forms of procedure to prevent these.
Perhaps most importantly of all, this more diligent type
of transport company takes these measures proactively i.e.
before (rather than after) the fact. They do it, not simply
because they’ve been instructed to, but because they know
and care that that’s what works best for the client.
Building rapport with the client organisation and the people
they’re loading with has become a natural and central part
of their modus operandi. As have practices like punctuality,
diligence in paperwork, and top-notch presentation.
Operators in this category also make sure they’re on
time, that their paperwork is detailed and error-free, that
they’re properly attired, and that they’re driving trucks that
look brand new because they’re washed after every trip.
Their drivers are friendly, professional and well-presented.
Personal presentation goes hand-in-hand with that of their
vehicles. You’ll never see a company of this ilk allowing a bluesingleted driver to load food into the back of a supermarket.
These elements of a transport operator’s performance are
being noticed more and more as their client organisations
increasingly pare down their upper levels of management and
make contract award decisions further down the operational
chain than has previously been the norm.
