Taking a walk in the customers’ shoes

Dealing with the differing needs of different customers within container shipping, ports and logistics, Maersk is developing, and rolling out, a series of differentiated value propositions. It is quite a journey but first reactions are encouraging. 

Shoes Maersk

“In year one, we rolled out the first differentiated services and we are now receiving positive feedback from customers as well as a lower level of customer churn amongst these segments – but there is still a long way to go,” says Louisa Loran, Global Head of Business Development & Marketing at Maersk Line, adding:

“Having engaged the Maersk Line organisation, we are now in the process of further aligning with the wider Transport & Logistics business to deliver differentiated value propositions based on the needs that the customer segmentation has identified.”

While many of the steps in the journey towards customer segmentation are only seen internally, the first externally visible steps in a sweeping revolution that is quietly transforming the Transport & Logistics division to better meet customer needs are coming up. Rebuilding around specific value propositions, the ambition is to change the game of logistics, thereby building customer preference and driving profitable growth.

A better offer

“We are not at a point where we are talking about premiums. We still want to build our track record and grow confidence, but the initial feedback is encouraging,” says Louisa Loran.

It all started in early 2016. Louisa Loran and Maersk Line’s strategy office had brought the commercial leadership from around the world and Maersk Line headquarters together.

No two people are identical and neither are their needs, so if we don’t address their respective needs, they won’t see any reason for giving us their value”

Louisa Loran

Louisa Loran, Global Head of Business Development & Marketing at Maersk Line

“We needed to put ourselves in the customer’s shoes and at the same time balance their needs with what we could effectively deliver to the market. We are in this business for the long run and as a result our focus had to be on creating value and not only competing on price,” Louisa Loran recalls.

“Change takes time, especially after we added the Transport & Logistics scope on top of the original segmentation. However, we are creating something that could change the game of logistics, and I’m confident that this will make a big change in terms of our customer satisfaction within the next couple of years,” she adds.

Asking thousands of customers

Today, Maersk Line has 70,000 customers. In addition, Damco has several thousand customers and together, the two businesses have just shy of one million customer contacts. All of these have different needs. The essential question that employees and executives from across Maersk Line found themselves asking was whether it would be possible to identify groups of customers, i.e. segments, with similar needs? And, if the answer was “yes”, how many segments would be manageable for the organisation and still make sense to the customers?

“We carried out a very inclusive process across the business, leveraging both data and experience; asking how we could match certain customer needs and what that was worth. We also looked at a lot of data covering small and big customers, profit and volumes, contract length, different commodities, customer ownership structures, their organisational setup, the value of reliability and many other variables,” Louisa Loran explains.

“We also need to address customers that are not particularly loyal to us and don’t expect us to be loyal to them either,” says Louisa Loran. “We’ll meet them on a case-by-case basis when the product and price is right. We will focus on making ourselves available to them through the channels they use so that they can make a fast choice. And these customers are just as good and appreciated as customers from other segments. It’s the needs that are different, and this approach is just looking at it from their perspective.”

The segmentation approach as such has not been communicated to customers, who can instead expect to see a gradual change over the coming years as the specific value propositions, relevant to their segments, are developed and rolled out.

Customers can focus on growth

According to Louisa Loran, this is what makes the vision to simplify and connect the customers’ supply chains by becoming the integrator of container logistics “so powerful”. At the same time, transforming itself to win in the future is both a huge opportunity and a challenge for the Transport & Logistics division.

“We can sometimes look at ourselves and say it’s complicated, which it certainly is, but if we don’t do anything, then we are just pushing the job over to our customers. Many of them spend a lot of money on entire departments that are engaged in compensating for the inefficiency in logistics,” she says and reinforces the customer perspective:

“It is clear that our customers hope we will remove some of the inefficiencies in the industry so that they can focus on their own growth.”