Third-party logistics (3PL) companies have long been the unsung heroes of the supply chain. They offer an array of essential services ranging from warehousing and transportation to distribution and freight management. However, during challenging economic marketplaces, as demand diminishes and budgets tighten, many 3PLs might be tempted to scale back their marketing efforts, as they see shrinking profit margins and look for ways to reduce costs and wait for better days. This perspective, although common, can be quite limiting and shortsighted. Here's why marketing remains vital for 3PLs even (and especially) during a down market.
1. Building and Maintaining Brand Presence
Firstly, it's imperative to understand that brand visibility in the market isn't something that can be switched on and off at will. A strong brand presence is cultivated over time. Pausing or cutting back on marketing efforts during a downturn can allow competitors to gain a more significant share of voice, pushing your brand to the background. By consistently marketing, even during lean times, 3PLs ensure that they remain top-of-mind for potential clients.
2. Capturing Market Share
Economic downturns create a shift in the market. Some 3PL providers, particularly those without strong financial reserves or those that lack adaptability, might go out of business, others will curtail their services. The most successful 3PLs see this as an opportunity to tout their benefits vs. competitors, and by continuing to market and promote services, they can capture a larger portion of the available market share, positioning themselves for a more robust comeback when the economy recovers. Consider special opportunities during this time that could allow you to be more successful against specific sectors. Are there new lanes available? Is a particular market now less competitive?
3. Demonstrating Stability and Reliability
In uncertain times, clients seek stability and reliability. By actively marketing and communicating, especially with your existing customers and active prospects, 3PLs can convey a message of stability and assurance. This marketing message can be, "We're here, we're prepared, and we're ready to support your needs no matter what." Such messaging can be a beacon of trust in a turbulent market. While we often focus on inbound and outbound marketing, don’t forget how impactful marketing to your existing customer base can be towards improving your bottom line.
4. Highlighting Value and Efficiency
During economic downturns, businesses of all kinds look for ways to streamline operations and cut costs. 3PLs that market their services as solutions to achieve efficiency and savings can attract businesses eager to improve their bottom lines. There are many avenues to this so consider how you can help businesses looking to improve efficiency by:
- Being an outsourced partner that can reduce your clients’ overhead
- Automation and other integrating technologies that can help reduce transactional costs and the need for headcount
- long-term agreements that can lock in more advantageous rates
By communicating these benefits clearly, they can position themselves as essential partners during challenging times.
5. Opportunity for Innovation
Down markets often force companies to rethink their strategies and innovate. By continuing marketing efforts, 3PLs can showcase new services, best practices, or technologies they've adopted to address the unique challenges of a down market. Marketing can shine a spotlight on a 3PL's adaptability and forward-thinking, attracting clients who value innovation.
6. Deepening Customer Relationships
Engaging in consistent communication and marketing during downturns isn't just about attracting new business. It's also about deepening existing customer relationships. By reaching out, offering support, and providing solutions tailored to the current market's challenges, 3PLs demonstrate commitment to their client's success, fostering loyalty and long-term partnerships.
7. Preparing for the Uptick
Downturns, as history has shown, are temporary. With average sales cycles ranging from 6 months to years, when economies recover, 3PLs that continue their marketing efforts are better poised to capitalize on the recovery. Having maintained or even grown their client base during the downturn, they can hit the ground running when the upswing begins.
Marketing is not merely an expenditure; it's an investment. And like all wise investments, its value might not always be immediately apparent, but its long-term benefits are undeniable. For 3PLs, the temptation to scale back on marketing during a down market can be strong. However, by maintaining and even amplifying marketing efforts during these times, they can solidify their position, capture new opportunities, and set themselves up for future growth.
The saying goes, "When times are good, you should advertise. When times are bad, you must advertise." For 3PLs, these words hold a weight of truth. By championing their value, showcasing their adaptability, and forging deep connections with their clients, they can not only weather the storm of a down market but emerge from it stronger and more resilient.