Since the start of the pandemic, the market turmoil impacting the logistics industry, including freight brokers, has made one thing abundantly clear: it’s always prudent to buttress your business against present and future disruptions in your revenue streams.
This means looking beyond working with just a few big customers, no matter how well your current relationships may be, continuously expanding your market reach, and exploring new ways to generate income.
The Importance of Diversifying Your Freight Customers
Sometimes it only takes one unforeseen hiccup to turn your best customer into a former one. Plus, getting underbid and losing a lucrative business opportunity to a competitor is very common. These instances, along with many more, could cripple your operation if you don’t have a robust customer base.
That’s why now is the time to diversify.
With a strategic plan, you can ensure your brokerage weathers any turbulence and comes out stronger and ready to scale in both good times and bad.
How to Diversify Your Customers as a Freight Brokerage
To help you get started, here are six effective strategies you can use to gain a wider audience and reduce business risk.
1. Zero In on an Industry You are Passionate About
Be it pharmaceuticals, construction, or FMCG, most brokers have an industry that they know inside out. What better way to expand your business than by leveraging this specialized knowledge to grow your freight brokerage?
Call up your industry contacts, get referrals from them, or start an email campaign targeting your favorite niche. Your expertise, experience, and enthusiasm will make a difference, elevate your pitch, and set yourself above your competition.
Guard yourself against future challenges by building a diverse client portfolio around your strongest sector.
2. Expand Your Service Offerings
Many freight brokers often fail to recognize just how much headroom there is to be gained by simply broadening the list of services they provide.
How about adding additional lanes by building a larger carrier base, and then targeting shippers running freight in those lanes? For example, grab a piece of the multi-billion dollar seasonal shipping market by opening up an intra-Midwest corridor to move agricultural products and equipment.
Another quick way to increase the value of your services is by offering free and convenient online payment options such as ACH QuickPay, which makes your carriers happy with quicker payments while freeing up your backend accounting operations so you can dedicate more resources to customer acquisition and service expansion.
3. Network, Network, Network
It’s vital to ramp up your networking efforts when the times are tough. From making calls, sending emails, attending conferences, hosting local events, and promoting on social networks such as LinkedIn and Facebook, make it a priority to reach out to new prospects regularly and keep building your contact list.
To start, set specific weekly or monthly goals for the number of new contacts you get in touch with, and steadily follow up on those leads. Remember, a healthy sales pipeline starts with a consistent process of identifying and connecting with potential customers in order to support your business development.
4. Highlight Your Advantages
In an ultra-competitive market, every advantage counts in your favor, no matter how small. Keep highlighting your strengths to set yourself apart and enlarge your client base.
When thinking about how to start a freight brokerage business and grow it successfully, make sure you meet & exceed customer expectations by adopting the latest digital tools to improve transparency and deliver a flawless customer experience.
Luckily, financial partners like Denim allow you to do just that with an array of cutting-edge features such as a business performance dashboard, a fast payment system, and full visibility with advanced reporting. Plus, we also help you pay your carriers faster and boost operational efficiency with ACH QuickPay sent daily, 90%+ advances, real-time TMS integrations, interest-free factoring, collections services, and many more.
Check out our plans for freight brokers and stand out from the crowd with the most advanced, all-in-one platform in the industry.
5. Strengthen Your Business Relationships
The foundation of any freight broker’s business is based on relationships with their carriers and shippers.
Therefore, it’s vital to maintain the highest level of service for your customers - by learning their particular business processes and tailoring your solutions to meet their needs.
Often, this entails making things easier for your carriers. As mentioned earlier, everyone loves to get paid as quickly as possible without delay. Therefore, offering quick, guaranteed payments online via ACH QuickPay is a big plus in any carrier’s book and goes a long way to securing an ever-growing partnership.
Another excellent way to build stronger ties is ensuring seamless integration with your customer’s preferred TMS platform, such as Ascend or EZ Loader, to enable fast load booking, digital documentation, etc.
You can gain even more trust by improving your credit rating on Ansonia, which opens up the door to doing business with a more diverse list of carriers and shippers.
6. Have a Contingency Plan
The pandemic has taught all of us that anything can and will happen, especially in the often turbulent shipping industry. And it’s up to each freight broker to assess their risks and prepare a contingency plan to ensure their business will continue to function in such emergencies.
The good news is that it’s not as complicated as you might think.
Start by identifying your key risk scenarios (ie. inclement weather, technical glitches, loss of a big client, etc) and then outline the specific steps you will take to address each one.
Next, determine anything you can do in advance to get prepared (i.e. having a backup internet connection in case the primary one goes down).
Finally, always aim to run your brokerage operation as efficiently as possible for more flexibility in times of need. A great way to do this is by utilizing a financial platform to cut accounting and back office costs, which affords you the leeway to invest in what actually grows the bottom line - the expansion and diversification of your customers.
All Freight Brokerage Businesses Must Work on Diversifying Their Customer Base
The old adage of not putting all your eggs in one basket has once again proven to be sage advice in these trying times. Whether you are just starting a freight brokerage, or are a seasoned firm looking to scale, it pays to take concrete steps right now to diversify and mitigate your risk by applying some tips outlined above.
To learn more about how to set up your brokerage to succeed in any market condition, contactthe experts at Denim to help you run a more efficient operation, attract top carriers and shippers, and bulletproof your business.
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