Why couriers have to go the extra mile to land new business

South Africa has a vibrant and dynamic courier industry, partly due to the lack of an efficient low-cost postal service. This is great for consumers and small businesses who get to choose from many courier companies locally. However, it does mean that if you are a courier company, the local market is highly competitive and landing new business is just not that easy.

Added to the number of couriers that operate in South Africa, another challenge is the fixed nature of input costs. If you consider the income statement of any courier, many of your largest line items are price-fixed at the unit level. These are, for instance, labour (rates are set by the national bargaining council), fuel (rates are set centrally) and even borrowing costs on your assets (interest rates are set by the Reserve Bank!). This puts you in a very precarious position where you need to demonstrate value to prospective customers, while many of your input costs are not in your control.

So what is the solution? Well, you need to design your logistics networks better, obviously! And that is what courier companies constantly do, through route optimisation, labour productivity, automation etc. So yes, how well you do this and the quality of the tools at your disposal will help, but there is more that you can do.

And that is to really analyse and dissect your prospective customers' supply chains. Too often the temptation when pricing new business is to plug in a rate card, paste in some sort of SLA matrix and copy a bunch of sales slides about your network footprint and digital capabilities from the previous tender you submitted. But this doesn't win new business; you need to stand out from your competitors. The way to do this is through detailed geospatial analyses of prospect shipment data: where are the current weaknesses and where are the opportunities? These could be service weaknesses or synergies you can provide by leveraging your existing network in areas where you are strong.

The result is that you actually demonstrate deep understanding of the customer's supply chain, find the opportunities they don't even know about and present a pricing and solution strategy that is rich and compelling. This takes a lot of effort, the right skills and exceptional geospatial tools, though. Which is, of course (you guessed it), where we come in. At Meado, one of our earliest use cases was to help sales representatives at courier companies find and exploit opportunities in prospect data, and it's something we've become extremely good at. So if you are interested, give us a shout and we can do a case study on your next tender, to show you the value of detailed network analysis to improve sales conversion for courier companies!2