Transparency Helps Keeping an Open Door
In one of my roles throughout the years, my responsibility was operational controlling at one of the largest logistics Romanian companies at the time. I had to make sure that our trucks were taking the most efficient routes from point A to point B. So, to be able to monitor that, all of our trucks were equipped with GPS tracking. And, for that system to work, every truck had a tracker device with a SIM card provided by a telecom company to be able to connect to the internet and send data about its location.
To put a little perspective into the story, we were on a two-year contract which was about to expire with our current telecom partner, so before the renewal, we wanted to make sure that we had the best contractual conditions on the market. Therefore, I arranged meetings with the two of the major companies we had in Romania providing these types of services, let them know about our desires and asked them to provide quotations. After getting their initial quotations, I was more than surprised to see that the competitor has given us a price 10 (ten) times smaller than our current provider. Usually if something like this happens, you grab the phone and call the one responsible for the surprise to check if there’s a mistake somewhere. Which I did, just to find out there was no mistake, and their offer was accurate. So, after a day or two discussing internally, we decided we needed to run a pilot to compare the two services to see the results. We knew one of them already, and we wanted to see how the competitor’s works, given the fact that it was 10 times cheaper.
So that’s what we did: we ran a pilot for a month, having ten trucks equipped with GPS trackers from our current partner and another ten equipped with trackers from their competitor. During this whole time, we had been totally transparent with our current partner, letting them know about the differences between the price offerings. And of course, we asked them if they knew what was the possible cause for such a huge difference. They just shrugged and told us that most probably is a tactic from their competitor to steal clients from them. We decided that we’ll just have to wait and see the results after that one-month trial.
For a better understanding of the situation, you need to know that when a GPS tracker is sending its position, it’s actually sending a data package over the internet, which has a certain size in kilobytes (kb) and is being sent with a certain frequency (x times per hour). After the one-month pilot was over, we gathered the data from the application logs and saw the reality. The situation was the following: our current partner’s SIMs were sending 100 kb data packages once a minute, while their competitor was sending 10kb data packages once a minute. So, there was our answer: the reason for the 10 times price difference. Thus, our current partner was invoicing us around 500 GB of internet traffic/month, their competitor was able to reduce that to 50 GB of internet traffic/month.
After that one-month trial, I asked the current (soon to be former) partner if they knew anything about that data package size compared to their competitor’s. Being put in front of the truth and with a visibly disturbed attitude, the client manager admitted he knew the data package might have been a problem. He knew that their data package was standard, with no option of adjusting the size. And he heard that their competition was working to improve that situation, lowering the data packages for that technology, but he didn’t want to say anything before seeing the results, because it has never been proven before.
It turned out to be a very costly decision from his side, keeping things in the dark. Had he been transparent from the beginning, it would have saved him from the awkward discussion and also from losing a major customer on the long run. Because after adjusting the data package situation, we might have been able to continue our collaboration, with a part of our fleet at least. But his behavior cost them the whole contract, putting also possible future collaboration at risk, because trust was no longer there.
