Tailor the servici to customer need!
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by Alan IVIllar
A PRODUCT like toothpaste or soap powder can be sold fairly simply. The customer will tell you speedily and accurately whether or not it is successful, but how do you sell something less tangible, like a warehousing and distribution service?
The SPD Group has been engaged in the business for 60 years, and has deployed its marketing skills from the pioneering days of the first Lord Leverhulme. Now, its name is as familiar as many of the household products which it helps distribute, but it hasn't lost any of its keenness to sell its services.
When I talked to SPD Distribution Ltd's sales and marketing director E. J. Cresswell, he was adamant that the quality of service offered was the overriding factor when seeking to attract custom.
Factors such as price, advertising, public relations, and market research are all important, but if the service fails, the customer will not come back.
He said: -Service today covers a whole raft of things. It is more than just the efficiency of next-day delivery.
The distribution company must give a regular and reliable service, with thorough administrative back-ups such as machinery for answering queries, and sophisticated systems employing computers.
SPD's Watford computer centre processes order details from the company's depots, and transmits load summaries and stock control information back to the depots.
For clients, the computer produces bookings analyses, delivery analyses, and depot physical and free stock figures. It gives physical stock figures to depots, and provides service monitoring on booking and deliveries for the company's internal control.
Other means of attracting customers are important, but for a long-established company like SPD, they play a secondary role.
Advertising keeps the company's name before potential clients, but only creates the first inquiry. Indeed, SPD finds that most inquiries are based on the company's reputation and credibility, whereas a new business would need to spend a larger sum establishing its name through advertising.
Public relations also play a useful indirect role. SPD's name has become associated with university research exercises and with environmental studies, while its management is often called upon to address professional institutes. "This is time-consuming,says Mr Cresswell, -but it is essential for the good of the company.
Market research is ur taken constantly on cliff' levels, some by outside staf others by company man ment scanning the general ket for distribution.
In its simplest form, m research involves SP[ reading newspapers watching developments ir High Street to identify cha in trading habits. If some: looks like potential new t . for the company, a reFir€ tative will go out and talk tl trader about his distribt. methods.
The growth of drinks sal supermarkets has been mat by an increase in drinks t handled by SPD, and it has up its trade with oil comp recently as they have diver. their trade. SPD vans help tribute tyres, batte accessories, and leisure we garages and filling stat throughout the country.
-We see and seek to seiz opportunities when they E and provide a tailor-made tern suited to the custorr particular_ needs.'" says
ssweli The company has to market services according to the area Athi h the customer operates. rur I areas where miles per is the important point, SPD c nsolidate the customer's tri utiore On the other hand, ted areas like south-east gland make it attractive for a lo ry, rather than a queue of ier I to deliver goods to a au àutlet.
e cannot force people into lel,says Mr Cresswell.
W ere SPD finds that it cant fi a customer's needs into y of its existing systems, it will at a specialist service to pe. It developed Carrycare as 3pe ialist distributor of china d gl ss, Unicold for controlled rature distribution, Uniee Intermodal for develop3nt f Freightliner traffic, and )be t and Britten as the counP's est-known hanging gar3nt istributor.
It has also bought itself into pa cels business through the qui ition of GKN's Carryfast mp fly, while its Unifast Asia rnp fly not only transports Brc andise from Hong Kong, it b ys it on behalf of the cusmer Ha mg produced a service h
icl meets a customer's quir ments, SPD realises that .-;annot simply sell the package 3rn brochure. The company
representative must take the customer to SPD's depot and instil confidence in the distribution system.
The price for the service must be accurate and competitive, and for this, SPD has a complex back-up service.
It asks the customer to provide full details of the characteristics of the goods to be carried. Sometimes, this can be done more easily, but where discrepancies do occur, the price can be adjusted at an early date.
Work measurement is used extensively to arrive at a price, and is used also as a basis of incentive bonus schemes for employees.
All handling operations are measured by work study methods, and there is a system of measuring the work done by clerical staff. All work measurement figures are reviewed constantly in order to maintain an up-to-date pricing structure.
SPD uses inflation accounting as a means of dealing with depreciating assets. Sometimes, this results in prices which are higher than those of competitors, but, as Mr Cresswell says: -You have to be sensible in the long term,
'Such has been the disproportionate rate at which the cost of some elements has risen in relation to the retail price index, that the need for something more effective than historical cost accounting has become very urgent.
The cost index for inflation accounting is reviewed every six months, while work measurement is reviewed at least once per year, but more often if conditions alter drastically.
Charging structures vary according to the characteristics of the goods being carried, the size of each drop, and such administrative elements as the number of lines per order.
Mr Cresswell believes that .SPD's prices match costs very accurately and that they are often very useful to the customer as a way of measuring its own efficiency.
He says: -I believe we are able to offer more objective sets of criteria on which the company can make decisions in many areas than a distribution division . of the company can show.
Not that SPD is averse to reviewing its own efficiency. It has centralised much of its administration, moving many functions out of depots, and has closed some depots where clients' needs have changed.
With a combined approach, embracing sophisticated pricing and a positive marketing policy, SPD is able to remain in a buoy• ant position.