As expected, there was much doom and gloom at the recent Ontario Trucking Association Annual Meeting. The highlight of the presentations delivered by Meny Grauman, the Canadian Economist and John Larkin, the American Financial Analyst was that the economies of North America appear to have hit bottom. In fact, Mr. Grauman from CIBC entitled his presentation, “Baby Steps” to reflect the slow pace of recovery that he expects to see in 2010.

The executives on the afternoon Carrier Panel highlighted many tales of woe that we have been hearing for months - - the rate cutting, the focus on cost cutting, the need to have a plan to carefully think through which equipment to park, the support that some trucking companies are receiving from their banks that is keeping some non-performers in business and a host of related topics. What struck me as interesting is that during the day of presentations and panel discussions, there was no mention of the value of sales people.

Does this mean that during a recession, sales people are simply a drain on a company’s bottom line? Since there is nothing they can do to prevent the customer defections and rate reductions, are they an expendable resource, a non-essential block of employees that should be purged during bad times? Based on purely anecdotal information and the lack of any mention of sales at the OTA, many companies appear to support this view.

This brought to mind the famous Warren Buffet quote, "It's only when the tide goes out that you learn who's been swimming naked." This appears to be exactly what happened to many trucking companies. The “me too” trucking companies that did not have a strong value proposition and a solid sales team were caught with their pants down. Moreover many companies compounded the problem by paring back on sales personnel as part of their cost cutting efforts.

To me this is ironic and disturbing since the fact is that if a company reduces its sales staff, it does cut costs but it also places its existing revenue base in jeopardy and limits its ability to add new revenue. This is not to suggest that companies should not be purging their poor performers if the poor performance is due to personal (e.g. lack of motivation, poor work ethic) rather than company related (e.g. lack of training, poor service) issues. The fact is that there is a great deal that a company can do during a recession to boost its business development efforts. These include the following.

• Don’t Give Up your Competitive Advantage During Tough Times

So many trucking companies appear to adopt a “bunker” mentality in a recession. They go into a defensive shell and blame everyone for their difficulties - - unreasonable customer expectations, competitors that quote rates below costs or a lack of customer loyalty. However, what you often find is that too many trucking companies offer commodity services. They are easily replaceable. They have not been able to differentiate themselves from their competitors. The lack of loyalty is a direct result of the fact that their customers have no compelling reason to stay with them when the going gets tough.

While shippers have had the upper hand over the past few years, the enlightened ones, and there are many of them, realize that the “good” carriers are hard to find and hard to replace. The superior carriers provide better service than their peers. Shippers realize that they may hurt their operations and jeopardize their customers if they migrate to the substandard carriers. The bottom line is that it is essential to protect your franchise in a recession.

• Create and Implement a Well Focused Business Development Plan

There is freight moving in a recession - - just less of it. Yes, there are fewer loads of auto parts or paper than there were during the good times. But people need to eat and buy pharmaceuticals and toiletries. Some markets hold up reasonably well.

At the same time, other markets open up. As some companies falter, cut sales personnel or step away from certain markets, this opens up opportunities for the companies that “stay the course” to attack new markets and provide good service. The quality sales people that become available may have a following of accounts that are looking for a new home. Similarly, some new accounts become available as their current carriers cheat on service to save a few pennies. They key is to develop a plan to identify and capitalize on the opportunities that present themselves.

• Build a Revenue Retention Culture and Strategy

In tough times, everyone is looking for security. This includes your customers as well. Therefore, as one of the executives at the OTA conference pointed out, it is important to educate your customers on the value your company provides and to ensure they understand the risks in moving to a competitor. Carrier sales people should be trained to seek out opportunities to provide added value to existing customers.

This can happen in a multitude of ways. Are there more lanes of traffic that your company can take on to replace traffic lost to rate cutting or to grow the business? Are there other services that can be provided such as short-term warehousing or freight brokerage?

• Make sure “All Hands are On Deck”

Many trucking companies need to realize that building the business is a “team sport,” not just something left to the sales team. Everyone should be selling, including the entire executive team. The fact is that the executive team is often in the best position to understand the full scope of the company’s operation and to make pricing deals on the spot. They are in a great position to lead by example, to train the rest of the team. However, people in dispatch, customer service or collections also interface with customers. Now is the time to get “all hands on deck” to protect and grow the company’s revenue base.

• Make sure that Cross-Selling is an Established Principal

In multi-divisional trucking companies,”turf wars” and egos can get in the way of sound business development practices. Some companies fear that by engaging in cross-selling, this will dilute the sales effort in their core divisions. In other cases, there is a concern that the other division may not perform as well and put the sales person’s existing business in jeopardy. This is where the senior leadership team needs to come together with well thought out plans that ensure revenue retention while capitalizing on its existing customers and business relationships to generate more business. Certainly it is easier to secure business through cross-selling existing accounts as compared to cold calling on new ones.

Business Development is an art and a science. It takes planning, training, managing, and tracking. I wonder if the story of this recession might have been a bit different if some companies had put as much effort into business development as they did into cost cutting.