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Setting and Meeting Annual Sales Goals

On the last day of 2020, we gave you some pointers on how to measure your success after a year that could politely be called “unusual.” One of the points that we tried to make was that every business is different, your business is different, and judging your business based on what others did wasn’t the way to do it. That blog post was, by necessity, an exercise in judging something in hindsight. While many businesses set goals at or near the beginning of each year, goals set in January 2020 were probably not even useful benchmarks by the time March rolled around. The world had changed too much. So now there’s the question that a lot of us are only getting ready to ask ourselves as January 2021 winds down: where do we go from here? Let’s talk about goals.

 

What Kind of Goal Should You Set?

 

You’ve probably heard of SMART goals, and those are a great place to start. The great thing about SMART goals is that SMART Goals are a helpful framework whether you’re setting a formal goal or just thinking about the future. So as a refresher or to bring anyone up to speed on a what a smart goal is:

  • Specific: vague goals can make it very difficult to say for sure that you’ve reached the goal, or can leave you open to reaching the goal as stated but being unsatisfied with the result.
  • Measurable: in addition to be specific, it’s good to have quantifiable figures for your goal. This lets you measure whether you reached your goal and track your progress along the way.
  • Attainable: if your goal isn’t realistic, you’re not only going to fail to reach it, you’re going to take away your incentive to work toward it.
  • Relevant: your goals, and the goals of any employees you may have, need to be based on what makes your business more successful.
  • Time-based: without a date (or frequency) to achieve something, there’s nothing in your goal to work toward.

What does this mean for sales goals in a freight broker agency? The obvious way to make a goal specific is a dollar figure, but there are other ways to set goals. Let’s look at 3 different ways to build a goal, and how reaching one goal every day can help make sure you’re hitting your overall goals.

Increase sales by 15% this year1 new customer per month5 new contacts per day
SpecificIncrease salesNew customersNew contacts
Measurable15%15
AttainableCheck against prior performanceCheck against prior performanceCheck your schedule
RelevantIncreases your profitsHelps reach the first goalHelps reach the second goal
Time-basedThis yearMonthlyDaily

 

What Should Your Goal Be?

Specific, Measurable, Relevant, and Time-based are critical parts of the smart goal, but they’re relatively easy. Attainable, on the other hand, can be difficult. No matter how much information you have, there are factors that just can’t be predicted. There’s also no one-size-fits-all solution to forecasting and goalsetting. In the example above, we assumed that your primary focus was adding new customers. However, your business may be better served by maximizing your business with existing customers, reconnecting with customers from before the pandemic, or another goal that is specific to you.

Whatever your goal is, the most important things are to make sure your goal takes your business where you want it to go, and that have a realistic plan to meet that goal. If you’re launching your own freight agency and serving one customer, doubling your number of customers might be too modest of a goal. If you’ve been established for 10 years and are serving 100 customers, that same goal is probably unrealistic.

As you might imagine, that means there’s no magic formula that you can use to set a goal. That said, there are some very important ideas to have in mind when you set your goal.

Guidelines and Suggestions

 

Be analytical. You don’t need a complicated algorithm, but you do probably want to be aware if sources like Freighwaves’s Market Experts think the industry will have a year of growth or contraction and whether you have more or less manpower for prospecting than you had last year.

Be aggressive. This is the easy part. No one ever set a sales goal of the exact same amount as last year. Remember, if you hit this goal at the end of the year, that should mean your business is in the condition you want it to be in. On the other hand…

Be realistic. This is where the first two points meet. You want to set an ambitious goal, but not one that is going to be out of reach. In the first few years your business is operating, you might grow several times over. Businesses mostly grow at the rate the economy grows, but your growth can easily outpace that, especially as a small business.

Be practical. Another of those items that seems obvious, but is critical to keep in mind, is your capacity to meet your orders. Increasing your sales means not only increasing the amount of time you spend selling, but also increasing the resources you put into booking trucks and offering customer support. A good TMS and a support network like the one Logistic Dynamics offers its agents will help, but you need to make sure you’re ready to take on the added work that comes with higher sales.

The Race Against the Clock

 

One of the biggest mistakes that businesses make is to have a goal in mind in December and not realize that they missed that goal in May. If you’re landing customers that have recurring orders, it’s worth 12 times as much to land a customer in January than December. If you want a million dollars in new sales in a year, doing $25,000 a month with one customer starting in January gets you 30% of what you need. In December, it barely makes a dent. If, starting in January, you add $12,821 a month in new sales every month (and all those sales are recurring), you’ll hit your million-dollar goal. By April, that number is over $18,000, and it’s nearly $35,000 by June. Getting 12 bites at the apple each time in January, and 11 in February, is a lot better than 7 in June and 6 in July.

One final point, and maybe the most important one: remember that these goals are about what you want as a business owner. You earned the right to make those decisions for yourself when you started your own freight broker agency. Your goal doesn’t have to be a million dollars, it doesn’t have to be bound to the calendar year, and it doesn’t have to be formalized any more than you need it to be. If you have employees, they should have formal goals and expectations, but the goals for your business should be exactly what you want them to be. The only thing that your goals need to be are detailed measurements to help your business develop into what you want it to be, when you want that to happen.

Measuring success in 2020

At year end, most businesses take some time to look back on the prior year and judge successes and failures, and the outlook going forward. Sadly, for many small businesses, that discussion also includes serious consideration as to whether it’s practical, wise, or even possible to continue operations. Small businesses close even in the best of times, and 2020 was not the best of times.

So, what does that mean for freight broker agents then? As you’re looking back on 2020, and forward to 2021, it’s harder than usual to take a look at your business’s performance and get a firm grasp on your prospects.

Freight Industry in 2020

 

The freight industry has been on a roller coaster ride in 2020. Like many industries, we were almost at a standstill in the early part of the year. Trucks and drivers are naturally essential to our economy, but closed businesses don’t send or receive a lot of shipments. In April of 2020, a lot of the freight industry just stopped moving. Since then however, you may have seen that the industry has actually had unprecedented demand. Freightwaves did a great recap of 2020 in their look ahead to 2021.

In spite of 2020’s strong recovery in freight, there’s something very important to realize for freight brokers and freight broker agents. When there’s such a dramatic change in an industry, not every business is poised to capitalize on those changes. No matter how well this or any other industry recovered, remember that many businesses may have been left out of that increase. If you weren’t in a good position to ship medical supplies or cleaning supplies, many of those increased shipments never would have been available to you. Likewise, small businesses do best when they are able to handle a steady stream of transactions. If businesses dried up in April and then skyrocketed to more volume than you were able to handle, you likely still lost out.

All of this is to say one thing: if you had a rough year but heard the rest of the freight industry had massive volume, don’t lose hope. You may know freight brokers who had great years, some that had terrible years, and every possibility in between.  Wherever you fall in that spectrum, it’s going to be important to take the lessons you can and move forward, ready for new challenges and opportunities in 2021.

What to expect in 2021

 

We’ll start with a disclaimer: we have no idea what to expect in 2021 for the most part, and anyone who says otherwise is probably wrong. It does seem like we’re all expecting things to return to normal, or whatever the new normal will be, at some point in the second half of the year, however. So let’s think about what that would mean.

What would happen if, right now, every account you had suddenly behaved as if it was December of 2019. Certainly, that’s not what is going to happen, but it’s probably the closest approximation we have. There’s probably a lot of good things that would come out of that, but are there any problems? If those companies suddenly resumed their prior shipping habits, would you still be their first call? Would you be able to handle the sudden increase or decrease in volume or change in timing, mode, or lanes?

In September we reminded you to stay in touch, if possible, with your customers that were not shipping or not shipping as much during the pandemic. This is a good time to do that as well. See if you can get a handle on any changes they’d like to make to their shipping processes when things pick back up. On our blogs post, social media, and on The Broker Bros podcast, we’ll continue discussing our experiences and what we’re able to learn, but remember that no one knows your customers like you. Your product is yourself, your understanding of what their business needs, and your expertise in freight – keep offering the best mix of those three things.

If you have customers that are shipping more since the pandemic started, this may be a good time to start feeling out whether you’re part of their long term plans. Businesses that needed shipping support to deal with changing circumstances during the pandemic might plan on going back to how they did business before, but if you’ve shown your value, it’s a good time to remind them that you can help with their day-to-day business even after things calm down.

The Takeaway

 

Setting aside the strategic suggestions for a moment, the biggest thing for everyone to remember right now is that 2020 was unusual. However you did in 2020, personally and professionally, was probably affected in a very direct way by things that were beyond your control. While none of us know quite what to expect in 2021, we all expect the end of the pandemic and better days ahead. If your business is doing well right now, do your best to capitalize on that. If not, remember that there are big changes coming in the New Year. As always, LDI will be here to support freight broker agents in 2021.

Hiring Employees

If your freight brokerage has reached the point where you’re considering hiring employees, you’re not alone. Around 20 million employees in the US, more than 15% of all workers, work at a company with 20 or fewer employees. Hiring that first employee can be a milestone for your business that helps determine your growth prospects for years to come. The decision to hire and the process of making that hire should not be taken lightly.

Should You Hire?

 

If you’re considering hiring, that almost certainly means that you’ve grown your business to the point where you can no longer manage it alone, or you foresee reaching that point very soon. Congratulations on your success so far. The first thing to do is stop and think about whether you need to hire someone, or if you might have better ways of getting help. Hiring an employee is a major, ongoing investment that changes the way your business operates, even if the employee doesn’t work out. Before you hire, check to see if there are services or contractors that can do what you need.

If there’s no service for what you need, or it looks like you’re going to need those services so much that it’s more cost effective to have a full-time employee, that’s when it’s time to move ahead with hiring. Be careful though, just because you’re sure you need to hire doesn’t mean you have all the information you need.

Requirements

 

There are some important details in hiring that can’t be overlooked, and frankly aren’t fun to research. Fortunately, there are resources available to help. The Small Business Association (SBA) has a guide to help hire and manage employees. It’s likely to be an important resource for you, since your area of expertise probably isn’t HR. The SBA’s guide should be able to help you through some administrative requirements, required and optional employee benefits, and other laws you might need to understand. Make sure to look at your state’s laws as well, which the SBA has aggregated in a link on the same page.

A common question for freight broker agents when hiring is whether they can pay their employees commission only. As with most employment questions, the answer is more complicated than a simple yes or no. That said, you’re probably going to be held to federal minimum wage and overtime requirements.

Reading the link above, you’re naturally going to be drawn to the outside sales exemption. It’s possible that someone working in your agency will qualify for that exemption, but it’s a high standard. The Department of Labor defines who qualifies for the outside sales exemption, including that “The employee must be customarily and regularly engaged away from the employer’s place or places of business.” On page two of that same document, you can find that ANY fixed site qualifies as your place of business. The phrase “customarily and regularly” is less clearly defined, but court cases seem to view this as a high standard as well. Bottom line – unless they mostly travel to customer locations, they probably don’t qualify, and will need to be paid at least minimum wage, plus 1.5 times minimum wage for hours worked over 40. They can be commission only, but you’re on the hook for the difference if their commissions are less than minimum wage would have been.

So now we’ve got the scary stuff out of the way. Those requirements are a big part of the reasons we talked about whether you can find support without hiring in the first section. Here’s the good news: if you’re heavily leveraging outside services to get your day-to-day work done, or you’re not growing because you just don’t have the help in the office, then a new employee can be a great investment – as long as you hire a good one.

How to Find and Interview Candidates

Wanted

This… probably won’t work on its own

It’s almost unfair to small business owners that when it’s time to grow, hiring becomes maybe the most important factor in your success. That almost certainly wasn’t the skill that made you decide to start your own business in the first place. For freight brokers, booking loads does very little to prepare you to find and interview potential new employees, so you’re left with a whole new skillset you need to learn.

There are more ways to find candidates than we could ever discuss here, so let’s just talk about what works for small businesses. You need to compete with everyone, so take the advice of baseball great Willie Keeler and “hit them where they ain’t.” Major companies are prevalent on top job sites, so check out sites that serve your specific industry like Jobs in Logistics. Talking to people in your network is also a great idea. In a small business, being linked up with candidates by people who know you and the candidate can help make sure you’ll have a cultural fit. You’re not just asking them for help, you’re looking to potentially give someone they know a great opportunity.

No matter where your candidates come from, it’s important to go into hiring with a plan. You want to make sure that you’re asking relevant questions to help you identify the person who best fits the job and your business. Keep in mind, too, that you are trying to grow, and the person you hire today needs to be a good fit for the organization you want to become. You need to decide ahead of time the skills and temperament that you’re looking for and how you’re going to identify those.

To do that, really stop and think about why you’re hiring. It can be tempting to hire “another you,” someone who reminds you of yourself, has a lot of the same skills, and can back you up on almost anything. Undoubtedly, that person can make your work easier, but is that the best move to help your business grow? After all, your business already has you. Consider what this person needs to be best at. If you’re looking to offload the tasks that you enjoy least or struggle with most, another person like you may feel the same way. If you’re just overwhelmed with volume and need someone to back you up on everything, it could work. Even if that’s the case, though, it might make more sense to let a hire take on administrative work so you have more time to do what you do best.

Onboarding

 

It’s easy to overlook the importance of the employee’s first few days in a new job. Before they start, you should have a checklist. They probably need a computer and a phone, but what else? If they’re working from your office, where are they going to sit? If they’re working from home, how’s their internet service? There are probably all kinds of logins, licenses, and software they need in order to do what you do. It’s best to have all of that in a list and even set up ahead of time to make a good impression, but that’s a small part of onboarding.

Your new employee is looking for a paycheck, of course, but the best employees are usually looking to grow and advance. They’re going to want training, not just in a formal setting but from you every day. None of that starts the day they get to the office, but it’s a good idea to make sure they know you’re there to help them learn. Employee retention is tough in an age where people have unlimited access to information and employers can hire in your neighborhood even if they’re a thousand miles away. Ultimately, you can think all you want about compensation, benefits, and titles, but your employees want to feel good about their work.

Making sure your employees find their jobs fulfilling, while also making sure they are a good fit for you, is a tough task. There’s no one way to make sure you hire the right people, but if you make sure you have a clear understanding of your needs and what you’re offering through your hiring process, onboarding, and during their time at your company, you and your employees will be far better off.

Customer Reviews

Let’s start with a fun fact: the first known customer complaint is held in The British Museum and was written on a clay tablet 3800 years ago. The customer was upset that the wrong grade of copper was delivered. Etching a clay tablet seems like it must take a lot of effort, so it’s easy to imagine this must have been some pretty bad copper. It’s a lot faster and easier for modern customers to leave a review online, and companies need to be ready for both the threat and opportunity that review sites present.

The Importance of Customer Reviews

 

According to Invesp, customers are more likely to use your business and will spend more when they do if you have good reviews. It makes sense, right? If a customer can quickly see that they can trust you, a major factor in their decision making is already decided in your favor. 47% of customers won’t even consider using a business with fewer than four stars, meaning you can lose almost half your potential customer base without ever even speaking to them.

We’ve all had the experience of a customer threatening us with a negative review, too. Whether something has actually gone wrong with their order or they are just angling for special treatment, some customers will use your online presence for leverage. That can be a frustrating situation, especially if you don’t have a lot of reviews and you know one bad review will significantly lower your rating. If you get enough positive reviews, a few negatives are less damaging. They may even help, since customers will find large numbers of exclusively 5 star reviews suspicious.

How to Get More Reviews

 

Unfortunately, it can be difficult in the freight industry to get a positive review. Customers leave reviews when an experience is different than they expected, whether positively or negatively. A restaurant or product might get a good review because someone was surprised by excellent service or functionality, but a surprise with your freight is almost never good. The two possible outcomes for most shipments are either exactly what the customer expects or a bad experience.

So then what’s the best way to get positive reviews? There’s a deceptively simple answer: ask for them. It may be as simple as mentioning it next time you’re on the phone with the customer, but there are other good opportunities as well. Put a link in your email signature, post about it on your social media, or put a link on your website if you have one. You need to be careful not to trigger any spam or security measures, but a good rule of thumb there is just to be honest.

Take a look at any automated messages you send out, too. Got an email that goes out when a customer’s delivery is dropped off? Think about including a link to a review page. Same if you have a notice to a carrier saying that their payment is on the way. This is where you want to be careful though. If you have an alert going out to your customer saying their payment is late or to a carrier saying they damaged a shipment, it might be best to leave the link out. Ultimately, you’re just trying to remind your customers and partners about review sites at times when they might not normally think of them.

Review Sites

 

The largest review sites, like Google and Yelp, are important to every industry, but DAT and Truckstop both have places to leave feedback. It’s also important to be aware that if you’re an employer, you should keep a close eye on your ratings on Glassdoor and Indeed, along with any other job-hunting website. The first thing to know about any of these sites is that you can usually log in and manage your presence, and it’s good to do so.

Some common review sites in and out of our industry

Since reviews are all about making a good first impression, let’s start with maybe the most likely place for a potential customer to see your business for the first time: Google. Google reviews can be left by customers, current and former employees, suppliers, and just about anyone else. The mix of reviewers means that to keep your Google reviews high, it’s important to be a good partner to everyone. It also means that asking for a Google review is an option no matter who you’re talking to, so you have the opportunity to really build up your presence.

It’s also important to be aware of reviews on DAT. Carriers will be able to leave you (or the company you’re operating under) reviews based on their experience. Much like customers, drivers have the expectation that things are going to go smoothly, so they have either the experience they expected, or a bad one. Here again, the best way to make sure that they’re still leaving reviews when things go well is just to remind them. Just like with customers, you don’t need to harass your carriers for good reviews, making sure the link is readily available will usually get reviews steadily trickling in.

Responding to Reviews

 

Most review platforms give you a chance to respond to reviews. That’s important for a few reasons. First, if someone leaves a negative review, your response can be a chance to correct whatever went wrong. For readers of the reviews later on, they get a chance to see that when something did go wrong, you were active in trying to make it right. As an added bonus, a lot of websites use engagement as part of their algorithm that decides where you get listed. In short, if you’re active, you rank higher. There’s no big trick to responding – you’re performing the same customer service you do every day.

In fact, you’ve probably noticed an ongoing theme – none of this needs to be or even should be a major effort on your part. Reviews should be a small part of your daily customer interactions, not a huge initiative. The most important thing is that you don’t neglect this important part of your online presence.

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