The keynote address at the 2011 TEANA conference, this presentation details the forward expectations of manufacturers and distributors, as well as the operating and commercial activities those in the transportation industry will need to master to remain competitive in a highly fragmented market space.

1. Growing Your BusinessIn A Hyper-Competitive Market Prepared for TEANA 16 July 2011

3. To be the premier business growth firm

4. To provide the best value in the marketplace

6. A Well Managed Business Goals Direction Feedback Objectives Objectives Objectives Action/ Behavior Action/ Behavior Action/ Behavior Action/ Behavior Action/ Behavior

7. Broad Client Base

8. Know Your Prospective Customer well Growing Your Business In A Hyper-Competitive Market

9. We Did Our Homework on TEANA 83 member companies Represents elite expediting firms Select invitation and vetting 3 units – 350 Small revenue to VERY large

10. I Bet You Know This Some things help Revenue up 28% YOY Revenue/mile up 15% Historically strong load demand Net fleet size down 14% since 2007 CSA driving out some competitors Others don’t Fuel continues to be a headache Higher fixed investment needed for efficiency As many as 400,000 fewer drivers by 2012 Changing DOT rules FMCSA compliance

11. But Do You Know This?

22. What Does This Mean To You? You’ve positioned in a segment which will pay better rates for better service Volume expectations are flat to up 10% Your customers aren’t worried about your industry You’ve got to tell your story

23. How Does Your Business Compete? Growing Your Business In A Hyper-Competitive Market

24. The 45 Second MBA in Marketing Three ways your company can compete1 Best total cost = Operational Leadership Best product = Product Leadership Best total solution= Customer Intimacy World class organizations choose one to drive their business Which model describes your company? 1. Treacy and Weirsema: The Discipline of Market Leaders. 1997, Perseus.

25. Marketing Vs. Sales The ACCH Model Mathematical approach to business development Methodical system to increase sales Lets you differentiate between relationship building and sales results Now focus on the sale!

26. { Customer Value Driving Force For Customer To Buy Customer Benefits Zone of Possible Agreement Price Driving Force For Supplier To Sell Supplier Profit Cost Source: Frank Cespedes, Harvard University. November 2008, YPO MI West Maximizing Pricing and Value

27. Success and Failure Success: Solution Marketing Solution Program and Resources Opportunities Transaction Marketing Transaction Program and Resources Opportunities Failure: Solution Marketing Solution Program and Resources Opportunities Transaction Marketing Transaction Program and Resources Opportunities Source: Frank Cespedes, Harvard University. November 2008, YPO MI West

28. Total Customer Benefits: How Is Value Delivered? Roles of Product, Sales, Services, Other? (example) Acquisition Costs + Usage Costs = Total Customer Cost Possession Costs + 7. Interest cost 8. Storage cost 9. Quality control 10. Taxes and insurance 11. Shrinkage and obsolescence 12. General internal handling costs 1. Price 2. Paperwork cost 3. Shopping time 4. Expediting cost 5. Cost of mistakes in order 6. Pre-purchase product evaluation costs 13. Field defects 14. Training cost 15. User labor cost 16. Product longevity 17. Replacement costs 18. Disposal costs Source: Frank Cespedes, Harvard University. November 2008, YPO MI West

29. Total Customer Benefits: How Is Value Delivered? Roles of Product, Sales, Services, Other? (example) Acquisition Costs + Usage Costs = Total Customer Cost Possession Costs + 7. Interest cost 8. Storage cost 9. Quality control 10. Taxes and insurance 11. Shrinkage and obsolescence 12. General internal handling costs 1. Price 2. Paperwork cost 3. Shopping time 4. Expediting cost 5. Cost of mistakes in order 6. Pre-purchase product evaluation costs 13. Field defects 14. Training cost 15. User labor cost 16. Product longevity 17. Replacement costs 18. Disposal costs Source: Frank Cespedes, Harvard University. November 2008, YPO MI West

30. Increasing Your Sales Volume Growing Your Business In A Hyper-Competitive Market

31. Pick How You Lead Expediters enjoy a luxury most carriers do not: the customer’s sense of urgency. The value derived from the last minute save, recovery, or ease of use allows the expediter to claim each of the three options for market leadership. Where the balance of freight companies are forced to compete on the basis of price (Operational Leadership) you have the option to choose your own path. Does your team agree with your understanding of the firm’s position? “House Carrier #1” Freight carrier of choice for hundreds of manufacturers Embraced low prices, beating the market in sales How they did it Tied all activities back to total useful time on road Automated maintenance plans to reduce unplanned downtime GPS update of unit locations to reduce unplanned delays Linked electronic logbooks, safety, and HR to identify and eliminate bad drivers

32. Listen to Your Customers Answer this: how different is your coverage map than anyone else’s? Beyond that, how much does your customer care about your coverage map? Understanding the specific companywide, departmental, and individual needs of your customer/prospect can help you sell more, for more money. Does your firm complete regular, methodical market intelligence gathering? If so, does it drive your service offering? The Sanair story $9 million niche provider to aerospace The go-to for Honeywell suppliers How they did it Listened to needs of buy deck Kept reasonable prices Constantly found sources for parts customers don’t need Strong customer connection through consistent outbound calls Ownership “rounds” with key customers

33. Completely Ignore Your Customers Sometimes your current customers don’t know what they’re going to need. Other times, your current customers needs don’t correlate with the broader market space. In either case, the competitive company develops an alternative model that supports the “other” market opportunities. Caution: failure to differentiate between the two can lead to failure in both! The Rapid Response story Roughly $0 revenue in 2003 $26 million 2004 How they did it Logistics, technology assisted Ignored “current” ask for lower prices Focused on future need: guaranteed availability High price, customer intimacy model People-centric approach Increased profit for carriers

34. Un – Sell! Becoming comfortable with the Un – Sell can seem a bit daunting. Why would you want to waste your time - or your sales team’s time – by specifically not asking for the order? The problem we all face is that decision makers and gatekeepers have been conditioned to ignore the sales pitch. At the same time, people want to be heard. We want to matter. And we want to connect with a compelling story. The “Customer X” story $11mm expediter Consignee control was destroying revenue stream How they did it Utilized focus group Un – Sell Invited 6 target prospects to participate 15 minute pitch, 3 hour dinner Involved prospect’s senior leadership in development of market position and message Responded with new prospect-defined sales model 100% invitation to pitch

35. Managing Your Sales Team Growing Your Business In A Hyper-Competitive Market

36. A Tale of Two Sales Guys Charlie, the Finder Sets aggressive goals Communicates progress Asks for field support Works with ops to improve Consistently beats expectations Bob, the Minder Accepts your targets A black hole Hides “His” customers Lets ops figure it out Consistently tells you why he missed expectations

37. Who’s Vacation Will You Fund? Put Bob into work-out! 90 day program of measured activity Successful adherence to plan will generate significant new volume Measures are irrefutable Outcome speaks for itself

38. Your Methodical Approach Focus on behaviors and activities first Monitor and measure output Tie outcomes to outputs Every able bodied salesperson will succeed!

39. Begin With Annual Expectations

40. Break It Into Quarterly Activities

41. Then Drive Monthly Activities

42. The Big Finish! Growing Your Business In A Hyper-Competitive Market

43. In Summary Determine your market leadership position Listen to your customers’ needs Listen to the marketplace for new direction Un-sell your way into new opportunities Manage your sales force Let us know your story!

44. That’s The Presentation:What should we discuss? Growing Your Business In A Hyper-Competitive Market

45. Contact Charlie Frederick For More Information:Charlie.Frederick@SimplicityPartners.com616.890.5676 (M)616.635.2920 (O) Growing Your Business In A Hyper-Competitive Market