The Role of Intelligent Business Decisions in Propelling the Indian Logistics Ecosystem
One of our previous blog posts concentrated on the power of automated technology in propelling the Indian logistics ecosystem towards incremental growth. However, there is much more than automated technology that our logistics sector needs to master to be comparable with its global counterparts. Here, we will discuss about the role that intelligent business strategies play in improving the ecosystem, proving to be a boon for freight booking services.
The ‘Expectation Effect’ wins hands down!
The Expectation Effect refers to the perception of customers regarding the quality of products received by them in comparison to their expectations. Our freight shipping mobile app’s founder Pulkit, has closely witnessed the vast implications of the Expectation Effect during his stint in operations management. What he has closely observed is that human interaction plays an immense role in delighting customers, contributing to an enhanced customer experience. These interactions humanise a brand and bridge the gap between them. When customer experience surpasses their expectations, interactions are considered to be pleasant and of a high quality. On the other hand, when the experience does not live up to their expectations, the interactions are termed as disappointing. He believes that this perfectly explains why the stocks of a business falls 20% in anticipation of even a marginal fall of $0.01 in earnings. Resultantly, the business proverb of ‘under-promise and over-deliver’ holds true as delivering more than the set expectations is a smarter business strategy than the inability to meet the expectations. This effectively garners loyalty as customers want to keep coming back for more. For instance, for trucks of a freight shipping company, reaching its destination before the stipulated time is the preferred option than delivering the cargo after the promised time.
Tackle arbitrary price decisions with Pricing Uncertainty Principle
As evident through the Pricing Uncertainty Principle, price decisions made by businesses are arbitrary and can be set at any price level. It remains so till the time businesses are able to gauge the existing demand and arrive at a price accordingly. Price decisions, despite being arbitrary at the initial stage, must be taken consciously enough to enable businesses to substantiate on the reasons that have propelled them to arrive at the decision. The best way to take smart price decisions with élan is to consider estimates of replacement costs, existing market prices and the subjective value of the price to the consumer, among other factors. For instance, a freight bookingcompany can set a price slab based on the weight of cargo to be transported in their trucks, and then adjust the price gradually according to the existing market demand. This price decision will depend on the labour that will be required to board, transport and unload the freight, the daily wages of the required labour, cost of necessary resources, among various other essential factors. Trip In, in spite of not simply being a load board, believes that it is the seller’s responsibility to decide on the price. Assigning a price and convincing the customers that the product offering is worth that price is a psychological process. As a result, businesses must be completely convinced about their price decisions to be able to convince their audience to purchase their product at the offered price.
Always Consider Opportunity Costs
As every product or service that customers opt for have hidden costs, the principle of opportunity costs is applicable to every choice that customers make, be it groceries or taking on a new project. Opportunity costs can be effectively quantified through financial concepts like ‘Time Value of Money’ or ‘Net Present Value’. A stipulated timeframe and a clear idea about the next-best potential return can help businesses to identify whether a particular investment is worth the asking price. The ability to uncover the implicit costs behind price decisions that businesses take will enhance the quality of business decisions. For a load board and transport company, identifying a timeframe for profitable returns is important to understand an investment is worth the price of the product.