In this episode of McLeod Insights, we sat down with McLeod Data Scientist, Criss Wilson. We discussed how transportation companies can help their new employees become just as effective as their experienced personnel.
As a longtime transportation professional and Data Scientist, Criss has a wide breadth of expertise in logistics, operations management, and distribution, with experience working for Ford Motor Company, Roadway Logistics Systems (now FedEx Global Logistics), Dell, Siemens, General Electric, and Emerson Electric prior to joining the team at McLeod Software.
Teaching New Employees How to Price Freight
Properly pricing freight is one of the most common tasks transportation companies face when they hire new employees. Established and retirement-age employees have often put in their 10,000 hours to learn the job inside and out. Over that time, they accumulate knowledge of what specific transportation services are worth.
“There’s an art and a science to pricing,” Criss says. “The science is cost-based: What does it take to run a truck? The art comes in knowing what a customer will pay for that service. It’s not always a cost-plus-value proposition for a customer. Sometimes there’s more value to be had than just the cost and a minor profit margin.”
Criss says rather than putting the 10,000-hour burden on new employees, companies should leverage data science to save time when bringing in new people. Factual data observations combined with statistics, graphic interfaces, rate knowledge, and familiarity with a specific region can help new employees get the data they need to focus on negotiation.
Helping Employees Navigate Negotiation
According to Criss, it’s crucial for employees to learn not only to negotiate but also to know when not to. Keeping emotions out of the negotiation process is the first step to effective negotiating.
“The idea in negotiation is you don’t want to offend anybody,” he says, “especially not your driver. Your driver knows what the value of his service is. That driver may not know what the customer is willing to pay, and then there is a negotiation. But if you make that driver mad, then negotiations have ceased.”
However, when negotiations are based on logical propositions, it’s possible to have a win-win situation between the driver, dispatcher, and customer.
In order to successfully negotiate, Criss recommends teaching a technique called the cycle of persuasion. This methodology is used by the FBI in hostage negotiations.
“One of the rules is to move someone from a very emotional state down into a logical state, before you try and talk to them in a logical manner,” he says. “Because if they’re emotional, they’re not hearing you, you’re hitting a wall. So what you need to do is to take them from resisting into listening, then from listening into considering, then from considering into doing – and it doesn’t end there. You then take them from doing into glad they did.”
Negotiation should be a win-win for all parties involved. Otherwise, the customer might feel as though they’ve been wronged in the transaction, which results in a bridge burned for the dispatcher and the company.
Another trick of the trade is knowing when not to negotiate.
“Sometimes the best negotiation is no negotiation at all,” Criss says. “When you get a good price, you’ve got to be smart enough to know it, and strike the deal.
“There are enough well-educated drivers in the world to know, based on the time of day and the day of the week, what a good rate is. And not everybody’s looking to hit a grand slam. Some of your best drivers – the ones that are the most productive – lead with a pretty good price. And you’ve got to know when you’ve got that person on the hook.”
Leveraging Technology to Streamline Processes
McLeod Software helps companies by removing certain tasks from employees, freeing them up to focus on higher-level needs. Digital Freight Matching, for example, relieves the dispatcher from having to negotiate prices. Limiting human touchpoints across processes allows transportation operations to run more efficiently.
In addition, leveraging analytics can help both established and new employees to easily follow trends and statistics in order to make more effective decisions.
To listen to the full episode of McLeod Insights featuring Criss Wilson, click here.