Thursday, February 6, 2014

Competitive Agent Pricing

How competitive are OA/DA rates in PricePoint?

This is a fairly complex topic to be considered from a few different angles.

First, price levels and strategies are of course at the sole discretion of each agent user. PricePoint is simply a tool which provides a more efficient, effective, and confidential approach to manage pricing.

Second, regarding confidentiality, those who understand PricePoint's privacy protections should be comfortable offering competitive rates. That said, "competitive" does not necessarily mean absolute lowest price. A competitive price can be regarded as a reasonable "retail" price, possibly with a gray area of discretionary margin which may allow for some discounting on a case-by-case basis.

So if an agent is not offering their absolute rock-bottom rates in PricePoint, does that mean it's a waste of time? Of course not. Let's think it through, say you are trying to book a private transferee shipment, with a total door-to-door cost around $10,000, of which the destination cost in PricePoint is $2000. Even if the agent may potentially be willing to grant a 5% discount if requested, that comes to $100, which represents only a 1% discount on the total move cost of $10,000.

It's fair to say that a 1% price differential is not going to be a deal breaker for the transferee. A booker can be confident using the agent's "standard" PricePoint rate for initial quote, then on the limited instances in which the transferee seeks further negotiation, the booker can seek a possible concession from the agent. Tip: use the PricePoint Message Board for such instances, which is privately accessible to only the agent and booker, and keeps a convenient record of dialogue for both parties.

PricePoint password-secured Message Board

This is a rational and efficient approach in which PricePoint enables the booker to produce competitive initial quotes as quickly as the same day of survey, without wasting time on composing agent quote request emails and waiting for overnight reply. It is then only a minority of cases that may require further negotiation, at which point the booker has better qualified the quality of the lead, warranting more direct negotiation if necessary.

In sum, a booker of course only wins a fraction of the opportunities quoted on. Therefore a key to success is to minimize time spent on the bids which are not won (aka "losing quickly"), allowing for more time and focus on potential winning bids, and secured customers. PricePoint perfectly supports this winning approach.

No comments:

Post a Comment