The Top 3 Reasons Why Companies Change 3PL Providers and How to Avoid Them Yourself

The Top 3 Reasons Why Companies Change 3PL Providers and How to Avoid Them Yourself

The cornerstone of success for a 3PL company is the ability to retain existing customers while attracting new clients. Not surprisingly, it is often more difficult to attract new customers than it is to keep existing clients from being enticed to try another 3PL company. By devoting increased attention to improving customer service, affordable pricing, and user-friendly technology, a 3PL company can help prevent existing customers from straying to a competing 3PL provider. Below are the top 3 reasons why companies change 3PL providers and the strategies you can take to keep your customers, as compiled .

How Poor Customer Service can Cause Customers to Change Providers

Clients enlist the help of a 3PL company to help their operations and shipments flow smoothly and seamlessly. In many cases customers are completely dependent upon their 3PL provider to supply the following important pieces of information:

When a 3PL provider fails to provide requested information promptly and accurately, the result is customer dissatisfaction. Most customers who employ the services of 3PL companies have clients of their own who urgently require updates on their orders and failure to properly respond can result in a negative chain effect of lost customers. One or two episodes of poor responsiveness can cause a customer to consider switching 3PL providers.

How a 3PL Company Can Make Customer Service a Top PriorityThe best way that a 3PL company can help prevent client loss is to constantly emphasize the importance of outstanding customer service to 3PL employees. Specifically, employees should be trained to focus on the following key elements of the customer service process: Responding promptly to customer phone calls and electronic correspondence

Providing regular updates on order progress

Ensuring that customers receive tracking information following shipments

Promptly addressing order inaccuracies and returns

In addition to reacting quickly to customer inquiries, 3PL employees should be encouraged to proactively provide information and data to customers. By going beyond the call of duty and being proactive, a 3PL company can maintain a high level of customer satisfaction.

Technological Inefficiencies Can Ruin a Customer Relationship

Outdated technology can drastically impede the efficiency of a 3PL company. No 3PL customer wants to hear the reasons behind a delayed shipment. Customers hire 3PL companies because 3PL firms offer supply chain expertise. They should not have to worry about the failed integration of their 3PL providers software systems. While every organization experiences sporadic technological difficulties, 3PL companies have a responsibility to ensure that their software systems are current and designed to be compatible with existing technology.

How to Prevent Technological Failures from Driving Customers to Competitors

There are multiple measures that 3PL companies can take to ensure that their technology is updated and primed to handle the addition of employees, large orders and future anticipated changes. By taking the following steps, 3PL companies can help make sure that shipments are not delayed due to technological inefficiencies:

Ensure that all employees receive thorough training on software systems

Formally review the effectiveness of systems at least once per quarter

Invest in sufficient software licenses and make sure they are kept up to date

Request a demo of a new software system prior to purchasing the system

Why Price Remains a Significant Factor in Customer Abandonment

Anyone who has worked in management for a manufacturing company knows that competition within the 3PL industry is increasing every day. New companies that are hungry for business will often promise to beat any competitors price simply to get a foot in the door. While these new competitors may not necessarily offer a higher level of service, the fact remains that some customers can be lured to another provider if there is a significant price difference.

How to Prevent Customers from Choosing a Lower Priced Competitor

In addition to reviewing pricing structures on a quarterly basis, 3PL companies need to make sure that they take other measures to help prevent customer loss due to price. Suggested measures include the following:

Continually work with freight carriers to obtain better rates

Survey existing customers at least once annually about value and pricing

Ensure that customers are comparing apples to oranges when reviewing 3PL providers

By striving to consistently improve customer service, technology and price, a 3PL company will help solidify relationships with existing customers and help prevent them from turning to a competitor.

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