With everything going on in the world today, from political trade wars to increased commoditization of your industry, the last thing you want to do is guess how the market will respond to your price.
On highly competitive trades with price-sensitive customers, it’s essential to keep your prices close to the market if you want to fill ships. But, have you identified those trades and customers? What about customers who are less sensitive to price?
You’ve probably learned over time that on some trades, no matter how you price, the market isn’t going to respond in the way you need it to. Wouldn’t it be better to know that before you let another departure go by with an underutilized ship?
Imagine empowering your organization with tools that would tell them the market’s response before publishing a rate. This information would give you the confidence to set rates as a market leader, having a positive impact on your utilization and profitability, and it starts with:
- A deep understanding of your customers. How should you treat freight forwarders vs. BCO’s? Dry vs. reefer? Autos vs. Electronics? Who will increase volume when you lower rates? More importantly, who won’t? Understanding your customers is foundational to setting the right rates.
- Segmentation with an accurate forecast. Anticipate seasonal fluctuations, recent trends, special events, and the impact of competitive pricing data on future demand. This gives guidance on how each segment will respond to price changes in the future.
- Employ a prescriptive pricing model that ties everything together and allows you to achieve utilization while maximizing margins. Knowing what rates each segment should be charged, informs the right desired response.
This strategy isn’t about radically transforming your organization, but rather using the information you already have, and partnering with a tech-enabled firm, who can leverage it to its full potential. When adjusting your price, be precise. Understand where, and by how much a price change will elicit the market response you need, to drive utilization and steer your organization into years of profitable growth.
At Revenue Analytics we’ve helped some of the world’s leading transportation companies leverage their historical data to determine the difference between segments that are sensitive or insensitive to rate changes, and price each of those segments to ensure profitable voyages. Don’t get left behind. Contact Us to learn more.