“Owning” Your Transportation Business!
A common mistake that I find with many entrepreneurs both in the medical transportation industry and other industries is that they allow others to “own” and dictate their business. What I mean by this is that some business owners allow other people or external sources to dictate their prices and, thus, establish the perceived value of their products or services.
Now, so as to ensure that you do not misconstrue my message, I am all for providing great deals and discounts to your clients! In fact, as many of you have heard me stress before, especially in the early stages of your business, the best thing you can do to promote your business is to literally “give” your business away in the form of free or discounted transportation! Further, I always stress that you work to increase the ”added value” to your customers. However, especially in service-based businesses such as the medical transportation industry, all too often I witness business owners allowing others to establish their pricing structure and, thus, defining the value of their business.
In the NEMT industry, it is not uncommon for customers to haggle prices and for contractors and brokers to try and dictate your prices. Periodically, you encounter customers that wish to talk you down in price. In shopping around for the “best deal” they will call and ask your prices in advance or they will wait until you have already provided service and then they will attempt to talk you down in price.
Needless to say, we are all looking for great deals and we would all like to spend less money in the process. So understanding a customer’s desire to save money is acceptable. But our desire to deal with such haggling as business owners can be bothersome. However, when you’re business is high in added value, reputation, and customer service you should never be ashamed to stand firm in your pricing – especially when it risks you not making a profit or altogether risk losing money!
Again, especially for clients that use your services frequently, offering discounts is acceptable and even adviseable. However, I can assure you that clients who only base their decision on price are not “regular” clients that you wish to retain long-term. Why? Because the moment they realize a cheaper opportunity, irregardless of the level of value, they will abandon you without hesitation! Trust me, it’s true and will always be true!
Regardless of your business or industry, there is always someone that has to be the cheapest in price - but that doesn’t mean that it has to be you! In fact, when I see a business that focuses on being the cheapest in price I can typically point to three key things such as (1) their clientele is based exclusively on price and not on quality relationships or added value, (2) they haven’t established or defined their value, and (3) they, in most instances, don’t understand how to determine or define their costs in relation to profits.
Think of any popular name brand product versus generic. How many times have you seen the same product side by side, looking almost identical, accomplishing the same mission, typically made of the same materials and ingredients. Which one do you always instinctively prefer to go with – the name brand product. Why? First, you recognize and have a degree of trust in the name brand product. Next, because of your recognition and the perceived value you have in the name brand product, you’re willing to pay more – it “eases” your mind. You rest easier because you have more confidence in the name brand! The same holds true with your service. You need to become the “name brand” service in the minds of your customers. When you do, price is no longer the deciding factor.
Brokers can be notorious for trying to dictate prices to young medical transportation providers. Some could argue that their approach can even border on bullying tactics! Brokers rarely hesitate to tell you what they “will” pay for various transports. They will insist that you accept these rates and that they are non-negotiable. However, trust me, in working with clients from all across the country I can assure you that when you position yourself correctly, brokers WILL negotiate! Why? Because it’s in their best interest to find and partner with transportation providers that are going to be around long-term. In many instances, brokers receive compensation for every transport performed. Further, brokers do not wish to waste their time with fly-by-night vendors. And, in speaking with an inside source in a prominent brokerage, brokers know which transportation providers they can “walk over” and with whom they ”work with!” And trust me, they’re not the same!
Many inexperienced entrepreneurs go into business thinking that all they have to do is “build it and they will come.” Once they build it, they think that all they have to do is be the cheapest in price and then their success is guaranteed. In such instances, it typically is not long before they realize that clients didn’t come and thus, their doors are in the process of closing. This flawed strategy is common in all businesses regardless of industry. Needless to say, there are many skills, tactics, and strategies that need to be implemented by you, the business owner, to ensure your viability and success. To be successful, you need more than a promising opportunity offered at cheap prices. You need strategic implementation and methodology that ensures your success.
If you’re ready to learn how to “own” your business and increase your profits, join us for the quickly approaching MDT Boot Camp Seminar. If you’re currently working with or will be serving a broker in the future, you definitely need to be in attendance!