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    « The Root of Profit Erosion... | Main | A Blueprinter or a Technology Provider? »

    April 11, 2006

    When it Absolutely, Positively, Has to Be Done…

    One of the key's to FedEx's success was its ability to guarantee overnight delivery.   FedEx was not the only overnight service at the time, there were quite a few competitors.  But FedEx's slogan was "When it absolutely, positively has to be there overnight" and they delivered on that promise or the delivery was free.  They guaranteed it!  The way FedEx could deliver on that promise is they had piercing insight into every process in their business.  They learned, measured, tweaked and then re-learned these processes.  Execution became part of their corporate DNA.  This gave them the ability to execute with confidence and to stand behind their brand promise.

    Do you think that FedEx scares customers away when a customer checks next business morning?  Do they erode their margins when they ship 2nd day?  I don’t think so. It adds to their profits in a more significant way than before they offered the services.  It also makes it hard for their competition to keep up.  FedEx didn't always offer next business morning.  They constantly perfected their model until they reached the point where they could offer the service and stand behind it. It really doesn't cost that much more for them to deliver a next business morning package, but to be able to consistently deliver it takes painstaking preparation and diligent follow through.

    Could you increase your margins if you could charge more for faster turnaround and less for slower turnarounds?  Does your customer base spend money or less money for faster or slower turn arounds?  Absolutely.  They trust FedEx to deliver.  Why can't you do the same?

    When you have confidence in your ability to perform you can negotiate from a position of strength. This confidence comes from developing a piercing insight to your operations, and understanding what it takes to perform.   You then make a promise to perform and follow through on that promise.  Sounds simple...it isn't!

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