Inside real-life carrier negotiations

CONCEPT # 4: UNDERSTAND A REP'S MOTIVATION

Carrier reps' compensation is based in part on profitability of their accounts. In fact, they're evaluated, ranked, even promoted based on maintaining hefty profit margins. Their job is to sell your business at the highest margins possible without losing the deal to the competition.

While it's good to develop relationships with carrier reps, keep in mind that your incumbent rep does not always have your best interests in mind. Reps' primary loyalties are likely to their employers, and of course their own pocketbooks — and not necessarily in that order.

Also understand that a rep's motivations may be different from his or her company's. Carrier reps have complex commission plans with quotas by service type, margin, automation compliance and other factors. Many plans renew quarterly, but also include annual objectives. Depending on how your business fits within a rep's quota or calendar, it may be seen as attractive or unattractive.

Similarly, a carrier's motivation will vary throughout the year and also depends on the region. When the carriers are focused on market share gain, they price to gain new business. When focused on margin improvement, the pricing environment tightens.

Finally, keep in mind human motivations. I've found that most sales reps are motivated and fulfilled by feeling their efforts are well received and acknowledged. We all want to make a difference in the lives of those with whom we interact. Sincere appreciation goes a long way.

If your carrier rep is doing a great job, acknowledge the effort regularly. Praise the rep in front of his or her boss or write letters of commendation. It's a great way to gain leverage, and a good, underused business philosophy.

Keep an open mind knowing that carrier service reliability, pricing and representatives change over time. If it's been a while since you looked at the non-incumbent carrier, review their current pricing and capabilities.

Rob Martinez (rob@NavigoInc.com) is a partner at parcel consultancy Navigo Consulting Group.