The rumour mill is saying that K&N is closing down their largest facility finally.
K&N is one we have competed against for years. It’s always been difficult to compete against them … they look big and they look impressive. The global turnover of the K&N group is ¼ NZ’s annual GDP so it’s hard not to be impressed by their size and there is often an assumption that size = good.
95% of our business comes from clients who have been awestruck by a competitor (normally a very large freight forwarder with a 3PL arm) then been faced with the reality of poor service. 20% of our current 25,000 pallets under management have come through this ‘washing machine’ directly out of K&N.
Anyway, the point of this story is that we got into a competitive situation with Postie Plus a couple of years ago. For a lot of reasons we were keen to win the account (including the fact we felt we were the only 3PL that could actually do the business as it is a complex apparel, high velocity, multi store, multi channel account and we have proprietary IT we built in-house to manage this) but we lost out to K&N. I was stunned. K&N had no apparel expertise and apparel is 4 times harder than general merchandise and all the business we have won off K&N is general merchandise.
When I found out that K&N had beat us I was upset. Not that we had just missed out but I was worried for Postie Plus – they are an iconic NZ brand. I have been involved in a number of emergency extractions to help companies continue trading by pulling them out of underperforming 3PLs who promise the sky and don’t deliver. The first words out of my mouth were “I doubt Postie Plus will survive this”.
The following 12 months K&N were charged and paid 250k in penalties for non performance. Postie Plus are now suing K&N 12M for lost profits. It’s hard from my perspective … I can see it coming and I know who can perform in what areas (not many, in fact there are only two I rate and each is limited to specialist areas) and who does not. But experience has shown me that if I say it to a new prospective client it easily comes across as sour grapes. So I have learnt not to say anything and instead I just watch the train wreck in slow motion.
With Postie Plus I was so convinced it was going to go south that I ended up trying to get hold of the shareholders. I got rebuffed by a few senior managers and I eventually ended up speaking to an ex CEO who said I was wasting my time. He was right and sadly so was I. It was incredibly frustrating.
The one thing that does help is testimonials. The biggest thing I always encourage any prospective 3PL buyer is do a lot of reference checking. Less than 15% ever do. I tell my prospective clients they can talk to any of my customers. I generally don’t give them names to call because that’s rigged but I am happy to reel off a list of companies and let them choose. I think if you are confident in your service you should be able to do this. It’s not always brilliant but it’s honest and more often than not the feedback is always very positive. I don’t know of any other competitor that would be prepared to do that.
The testimonials my clients have given me have helped us win a lot of business. I almost think it is the most powerful sales tool we have so to this end we’ve decided to get as many testimonial letters as we can for our new web site. So watch out – I’ll be asking soon!