Dating models

Hearing complaint about bad rates is a white noise I play to put myself to sleep at night. I do so, soundly, because most of the market spends its day trying to discover the good ones.

It is unfortunate that after 16 years in the industry, the pencil is never sharp enough. It’s not $1800 that would have won the load, it was $1788, and if I just had enough tweaks I could have got there.

No matter, this winning rate was just given by another auto price cannon that found a loose match and gives more specific numbers. Neither would have moved it for less than $2100. They both missed it was Hazmat.

The examples can go on and on until we end up all realizing it’s not the rep or analyst or algorithm tanking business opportunity with perpetually bad calls. Talent and sophistication are cornerstones of a business today. Ignore them to your peril. Nonetheless, scaling or better operating the pricing function cannot be wholly reliant on them. Most of the business should be contracted anyway, which has no right answers looking months to a year out. The answers also change depending where you are on the rollercoaster.

I’ve been asked how I’d transform the pricing function before, and I give the same answer today. “I don’t know yet.” By itself, this is unsatisfactory. It is also better than any promise up front. So, yea, I don’t know yet, but here’s how I like to get there:

What’s the problem(s)?

Ask enough questions and you find an answer or the ones to work on first. WHY are the rates bad? Are they high, low, inconsistent? Is it certain types of business from mode or service?

These are surface level places to start that should get you deeper into the iceberg. At some point what everyone already knows gets agreed upon out loud or priority is at least more clear. They should be the biggest bottlenecks toward vision or high performance.

Get them on a whiteboard or document, figuring who’s involved to the scope.

What are the processes?

Too often there is nothing to do with a price served that needs the help. GIGO or garbage in-garbage out is a popular phase in data modeling, but works for processes all the same.

No one should be pricing X level of opportunity without knowing what it is, when its due, how its to be broken out, what are the accessorial schedules, and so on. Every single day this information is left for someone else to catch. Every day businesses bite off more than they can chew or award too much on simple oversights.

Are you breaking fuel properly? Is it a dynamic fuel that you have to hedge up linehauls? Are schedules or miles different? Training may be all the difference.

What do you have already?

When you work at a small company or a big company you are always going to be limited against the grand ideal. Most times even the good version. It’s important to know, and Isaac’s 4th law of business, people will put as much effort not doing something as they think it difficult to do.

This doesn’t deny needing investment or resources. They should be part of the answers, but no challenge will be fixed overnight or initiative fully bought without plan and proof of action with what’s available now, today.

I once heard every business is held together with Excel and duct tape. Tell me the lie.

 What are the costs?

Technology is a helpful tool, but it gets too separated in the accounting. A license or subscription can be as much, or more, the price of an entire team with multiple cross-functions better served. Conversely, not having the ability to offer expediency of or even a response altogether can lose other business out the door.

There’s no wrong answer here except not having any idea what it takes to onboard, integrate, serve, and display performance results.

What are the goals?

Fixing problems are usually ugly sells because they are neither giving a choice nor tied to direct growth KPIs. Going back to the first point, however, fixing problems should be what help achieve a goal overall.

The fixes may be the first goals to start. Either way, you wouldn’t have them if they weren’t an impediment en route to something else.

Nonetheless, some problems may be big today, but working on them may put you behind the next run or fall in the market. The problem may be something in the future to avoid altogether. These aren’t easy to answer of course, and why this recipe can be replicated.

The results are dependent on the cooks and the kitchen.