Management Dynamics Inc.

Management Dynamics Inc.

Chief executive

Strategic account management is a somewhat foreign term in the transportation industry but a concept whose time has come. In an age where customer acquisition is expensive, cultivating the "top 100 strategic accounts" can pay impressive dividends. While these accounts may represent only 20 percent of the total customer base, they often contribute 80 percent of the profits.

Companies that effectively manage their strategic relations retain customers longer, reduce the cost of sales and accrue other important financial benefits. To capture the opportunity, however, the concept of a relationship must expand beyond a friendly game of golf or dinner.

Your strategic accounts are not just looking for lowest cost. Most transportation executives understand that "you get what you pay for" and carefully consider the costs of poor quality: a missed delivery, incorrect documentation, or a misrated freight bill. Strategic accounts demand a higher level of attention, but in turn can award more business, pay invoices on a timely basis and look for opportunities to integrate processes and improve productivity.

Some leading steamship lines are starting to form strategic account programs with their most important customers. Using a mix of people, process and systems they are re-engineering the customer experience. One such area is in invoicing. Today the industry suffers from extremely complex pricing mechanisms that invariably lead to misfreighted bills. The result often is a disputed or a short-pay invoice that slows collections and generates expensive correctors.

To address this major financial and customer service issue, technology can be employed that accurately freights bills and consolidates these bills into one invoice that fits with the customer's process and reporting requirements. A higher level of service to be sure, but a program that promises an impressive financial payback. And in this new year, who wouldn't want more control over 80 percent of their profits?