Commoditization in the Relocation Industry

February 19, 2013 by Frank Peditto

Last month I shared my top three predictions for the relocation industry. While I didn’t call out commoditization specifically, I did cite it as a fueling agent around the continued consolidation of service providers. And, while I do believe that to be true, I also believe that the tipping point between pricing commoditization and service is around the corner for many. As a service provider, we are often requested to participate in RFPs for our customers; third-party relocation companies and van lines. RFP content typically focuses on our organizational structure, key performance indicators, technology capabilities, and, of course, price. This type of proposal request is fairly standard and it provides us with a presentation platform to demonstrate our value proposition in its entirety.

What has been more interesting to me over the past several years is to watch the evolution of corporate RFPs in the relocation industry. While not directly engaged, we’re often asked by our customers to participate directly in this process, which has certainly been an eye-opener. For many corporations, the increasing need to use a parallel RFP process for all purchased services is driven by procurement. Leading a team that includes HR, finance, and others, procurement has moved to the ‘pole position’ for relocation services. There is no doubt that the processes set forth by procurement ensure competitive pricing, but what is concerning is that some companies procure relocation services the same way that they would office supplies. As an industry veteran, I only question the ability to adequately evaluate the full array of value that a relocation service provider delivers with an online bid process for pricing that requires bundled pricing for each relocation level. Anyone with any relevant experience knows that this is just not possible for domestic relocations, so what’s a service provider to do? Do you simply go in with a ridiculous cost or even a zero cost and hope that the corporation questions their process once they receive the submissions?

While not often directly impacted by these corporate processes, I sit and scratch my head just sitting on the sidelines. How commoditized can the industry become before service is affected and the value to the employee is significantly impacted? How much degradation can service providers experience within their margins before they are forced to either compromise service quality or exit the industry all together? For large corporations, will domestic relocation become simply a loss leader for the international business? Only time will tell in terms of what will happen, but hopefully procurement departments will continue to take the time to learn the specifics around relocation and how the respective services are delivered and priced, so that, at a minimum, the RFP process is a meaningful one for both the service providers bidding and the corporation as a whole. 

Making the Most Out of Trade Shows

March 9, 2012 by Frank Peditto

It’s not often that I find myself wanting to revisit a blog topic, but, as the economy continues its slow recovery and businesses face tighter and tighter budgets, I felt the need to share some of my additional thoughts on making the most out of trade shows. According to the Center for Exhibition Industry Research, there are more than 13,000 trade events each year in the U.S. with an additional one million meetings. And, it’s estimated that businesses spend over $100 million annually on trade shows. While organizations have definitely cut back in terms of spend compared to events in the early 2000s, trade shows and events are still a key part of marketing, at least for the short term.

As I mentioned in my post from June of last year, “My past experience with trade shows has been that you ‘have to be there’ because if you’re not, your industry often thinks you are out of business, and that most are filled with competitors and not real business opportunities.” Rather than continue the deliberation of whether or not to attend, I wanted to share some of my simple success tips to making the most out of any show.

Prior to committing to any event, we weigh the pros and cons for our team in attending the event.

• What is our estimated budget for attending and exhibiting at the event? What is our view of a successful show? The latter may not always be closed sales, as we also consider current customer interaction as well as developing new relationships.
• Will this be an opportunity to meet and/or follow-up with new prospects?
• Which of our current clients will be attending?
• Are our competitors attending? If so, who?

After the initial discussion, we establish a goal for the team. For example, in an industry event it may be to hold three client meetings, follow-up with four existing prospects and cultivate five new relationships.

Once we make our final decision to exhibit, we talk about our pre-event, in event and post-event strategies.

• Do we have the email/mail list of exhibitors? Is it worth an additional financial investment to purchase a list? From there, we develop our pre-event marketing communications plan.
• Is there a speaking opportunity at the educational sessions for any of our team members?
• What will our in event presence look like? Booth, collaterals, giveaways (always key to select levels of giveaways and ensure that they are valuable enough that the individual wants to bring them home), and any interactive demonstration (iPad, laptop, etc.). What is our staffing strategy for the booth – two working and one floating through the aisles?
• What is the post event follow-up strategy? Who is the primary contact for follow-up? Is there a post-event offer? Giveaway? Communication medium (phone, email, mail)?

Finally, we do a post-event debrief. During this meeting, we discuss what worked, what didn’t and we include other individuals from the team as well as those who attended so that additional questions may be asked and ideas cultivated for the next event.

While virtual conferences continue to gain popularity in many industries, I am confident that it may be a few years before those fully infiltrate relocation and transportation. Until then, we will continue to make prudent investments, improve our experience and that for our customers, and work to ensure we meet or exceed our goals at each event.