Jul 14, 2020 Corporate Move Pricing: Trust Through Transparency
By Ben Heller
It may seem counter-intuitive, but “transparency” has long been a trap for suppliers in the moving industry. Conventional procurement methodologies demand transparency, yet the end result is false pricing environments and RFP processes shot full of loopholes.
It goes like this: in the transparency game, movers find themselves forced to price low to win the RFP – so low it’s often at a loss. In order to make up the difference, there’s an expectation to overcharge on moves outside of scope, on supplementals, and by manipulating weight and volume.
Clients then need to police these agreements, either themselves, via their RMC, or an incentivized independent auditor to catch suppliers “cheating.”
This is a broken system. It’s expensive, adversarial, and negatively impacts quality service for the transferee.
The Benefits of Transparency
When applied correctly, transparency can be used to encourage trust instead of suspicion. Consider e-commerce giants such as EBay, Amazon, and Expedia – how do they uphold their promise of transparency and trust? They put data first, providing a full range of pricing and performance metrics to enable customers to make the best choice for their needs.
This is what PricePoint does for moving. By providing true price transparency and performance measures, clients can reward movers that perform better.
For example, a huge challenge is getting clients a fixed price on a move when the mover doesn’t know the conditions at the destination. If the destination location is a fifth floor walkup without elevator access, that adds significant logistical challenges and costs beyond a typical move. These services are typically referred to as supplementals, and because they aren’t transparent and are difficult to control, they are often overcharged to boost profitability.
But not all movers play these games. And PricePoint proves it.
In the latest quarterly review, one mover performed over 200 moves and charged 55% below market on supplemental costs. That is huge, and it saved each of their clients thousands of dollars – savings generated by simply running a great moving company with a well-organized network of moving partners who all held themselves to the highest standard.
It’s also terrible, because the mover’s clients didn’t realize the value they were getting, nor were they winning more business for doing things right.
By enabling users to see metrics beyond price to make the best decision, transparency has the potential to reward the best movers, reduce costs, and improve supplier relationships.
Moving from Adversary to Partner
It’s remarkable how the tone of performance reviews improves when the client feels assured that they are being charged fairly, likewise when the supplier feels their value is recognized and their pricing expertise is being trusted. In an open, transparent environment, trust and partnerships can flourish.
We’d love to help you build better relationships with your corporate clients.
CEO Ben fell in love with the mobility industry while running Accentureʼs global mobility consulting practice. Focusing on the mobility supply chain, he learned the hard way that move pricing is complicated, unclear, and vulnerable to manipulation. After evaluating all existing alternatives, Ben partnered with Ryan to make data-driven moving decisions possible.