http://www.straightforwardconsultancy.co.uk/
Whilst my wife and I were in New Zealand and Australia in Nov-Dec 2009, I sketched out the business model for Straightforward Consultancy. We would focus on the small-medium sized customers in the North West and use our industry expertise, knowledge of the market and the freight forwarder business model to sharpen up customers' import and export freight models. We would also be available on a typical consultancy basis to help clients with their freight and Customs related problems.
I suppose the concern was that this was an idea, completely untested, and although I knew that there were consultancy businesses in the logistics sector, my vision for SCL was for something very niche and also one which was going to not only help customers to reduce cost, it would also walk alongside them on their logistics journey, a day to day source of advice and operational support.
In Sep-2009, I'd done some test tele-marketing to clients in the North West and talked about our business proposition and whether they'd be interested in our services. The results were pretty interesting, quite a few customers in my sample test marketing (say half) were quite interested, they thought an industry insider with a lot of experience might indeed by an asset, but they wanted to know how the fees worked.
Of course, in 2009, we were in the early stages of an economic recession and customers were very concerned about costs. There was also a reluctance to take on consultants as many customers felt they would be expensive and they couldnt be sure of the results - an uncertain return on investment (ROI).
So, in New Zealand, I was doing a lot of thinking about how we could make the value proposition attractive for small-medium sized customers. I knew there would be an interest in reducing freight costs but having said that, it would probably have to be results based.
Fast forward to February-10 and we had (almost) everything in place. We had a (basic) website, email address, business cards, a limited company, an accountant and visibility on LinkedIn. I also had access to a database of regular importers. I was also totally determined that it would be a success, for me it was like the phoenix rising from the ashes after all that had happened in 2009.
We focused on importers to begin with as it is generally accepted that around 75-80% of worldwide air and ocean freight is consignee controlled (Incoterms Ex Works (EXW) or Free On Board (FOB) and they would pay any freight costs. They'd therefore have an interest in reducing and controlling their landed costs so in Mar-10 I started calling companies in the North West using a post code based system (as we wanted to be physically close to our customers, able to see them regularly to advise and support them).
Then the question of fees started coming up in conversations. The customer would express interest in our service and then ask how our fees worked. I'd initially hoped that companies would be happy to pay a standard consultancy type day rate but it was clear this was an issue. To make it attractive, it would have to be results based, some sort of gain share / shared savings model.
This way we'd be paid on results and the client would see nett cash savings on their bottom line alongside any service improvements we'd introduced as a result of our logistics / freight review.
This then meant we'd have to design some rigorous processes and robust measurement tools to clearly and accurately measure the savings, shipment by shipment. That was when I decided to sign up for an advanced IT course at Warrington Business School to design the tools we'd use to carry out the bid process and also generate our monthly savings and freight activity reports.
Luckily I was able to take advantage of a 100% grant and I embarked on the course for a year. It was really excellent and I was provided with 1-1 tutoring.
More tomorrow.
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