Will FedEx Target Certain ‘Custom’ers for Rate Increases?
Will Federal Express begin targeting certain customers for custom rate increases above and beyond the general rate increase?
Well, according to an industry expert, that is a distinct possibility.
Margin improvement appears to be the standing marching orders from on high. Similar to UPS, FedEx no has its arms around its costs, our expert tells us, and is finally able to identify profit margins per account.
Word has it that those customers performing below a certain level of profit expectation will see their rates “releveled.”
Lower volume customers would receive a “Dear John” letter while higher volume customers would get the message delivered in person by the sales team accompanied by something along the lines of “we’d love to keep your business, but unfortunately not at current margins. We think this proposed pricing is a win/win and still offers lower-than-market pricing and value.”
What’s more, our industry expert speculates that those FedEx customers targeted might receive an additional 5% to 10% increase.
August 31st, 2010 at 11:18 am
Interesting topic, Jim.
We just reading a recap of the CRM Evolution 2010 Conference, and Clarence Hempfield wrote about a similar topic, saying “The first step is to determine which customers are worth retaining. At the opposite end of the spectrum, it is just as important to determine which customers should you divorce.”
Do you think this will be a growing trend among service provider?
(If interested, can read the full post at http://www.pbinsight.com/blog/details/five-common-sense-processes-for-growing-existing-customer-relationships/)