The Evolution of Marketing in the 3PL Community
John Drea, TIA Marketing Instructor
“And you better start swimmin’ or you’ll sink like a stone, for the times, they are a-changin’” (Bob Dylan)
The words of Bob Dylan aptly describe what has been happening in 3PL marketing over the last two decades. 3PLs have experienced waves of change, both in how we do marketing activities and the importance of marketing. Let’s look at the past, present, and future of 3PL marketing.
Where we were.
3PL service marketing has changed over the past 20+ years. In the early 2000’s, marketing was often an afterthought in the 3PL community. The focus was on sales and operations. When freight service providers engaged in marketing, it was primarily to “get the word out” to potential shippers and carriers. The purpose of these efforts was serve as indirect support for sales.
For many 3PLs, it was hard to justify resources for a significant marketing presence in this period. “This is a word-of-mouth business” was a common refrain. The most common way to segment the shipper market was based on the type of load and equipment needed. Many 3PLs assumed their shippers would remain as customers as long as they were satisfied. Smaller companies still kept contact information in a Rolodex (and if you don’t what a Rolodex is, ask someone over fifty.)
We’ve also seen many changes in the general marketing landscape. In 2005, only 2.5% of all retail transactions were online. Today, 16.2% of retailing is online and by 2027, it’s expected to be 20.6%. Twenty years ago, market research professionals had confidence in their survey data – today, drawing a sample representative of an entire population is very difficult. In the early 2000’s, “social media” was synonymous with Myspace. Facebook launched in 2006 but wasn’t a significant marketing tool for several years. Finally, if someone spoke about “linked in,” they were probably referring to a chain, and “X” was something that marked the spot on treasure maps.
Where we are.
3PL marketing has undergone major changes since the early 2000s. Among the biggest marketing changes:
- Changes in Marketing Technology
- The Role of Social Media
- Differentiating Transportation Services
- New Marketing Applications
Changes in marketing technology. A visible change within 3PL marketing has been wave after wave of technological change. The Rolodex was replaced by the spreadsheet for tracking contacts, then the spreadsheet was replaced by CRM systems. Shipper characteristics, loads, lanes, and prices are stored from each interaction. This creates better load pricing and a more efficient sales process.
Today, marketing professionals now use technology to more than just communicate with shippers and carriers. Technology helps 3PLs identify market segments based on data, and to identify specific segment needs. The combination of data from CRM systems, economic forecast data, social media data, etc. leads to greater reliance on data in decision processes. A few of the larger, asset-based 3PLs have gone further, incorporating some artificial intelligence applications to handle routine functions.
The role of social media. Sites such as LinkedIn, Facebook, and X have transitioned from novelties to useful tools for communication and lead development; however, 3PLs have shown considerable differences in the way and how much they use social media. Some prefer the “dipping a toe in the water” by posting some organic (non-paid) content or updates from the company. These is similar to posting a press release on your website, since non-paid posts are primarily only seen by the 3PL’s social media followers. Other 3PLs have decided to “dive into the deep end” of social media, running paid ads that link to original targeted content on the 3PLs website, then collecting contact data for sales.
A challenge among all social media managers is how to evaluate social media effectiveness. At the risk of overgeneralizing, a communication approach evaluates social media through common social media metrics, such as page views, unique page visitors, plus engagement metrics such as likes, comments, shares/re-tweets, etc. A marketing approach sees social media as “a means to an end,” with the end being more loads, revenues, and profits. Using this approach, social media traffic is less important than knowing how many social media inquiries generated leads, how many of those leads spoke to a broker, resulting in how many loads. A communication-driven approach is easier to measure, and it’s appropriate when awareness and branding are the primary goals, while the marketing approach is appropriate when the goal is selling brokerage services.
Differentiating marketing services. A question I frequently ask college marketing students is: “When all competing products or services are perceived to be the same, the buyer will choose the one that is ________.” The response? “CHEAPEST.” When freight capacity is either adequate or in excess, shippers who think freight services are a commodity – “they’re all the same” – will seek additional price quotes or go directly to a carrier. This price pressure negatively impacts all freight brokerages, since shippers will increase pressure for brokers to lower load prices (and profits).
Price pressures require 3PLs to differentiate how they are distinct in ways meaningful to a shipper. A 3PL must first define a narrow market segment where all shippers in the segment have a common need. A 3PL can then tailor their services to address the specific needs of the segment. If that sounds easy, just a “heads-up” – that’s not accomplished by asking a shipper “what are your needs?” It requires a 3PL to understand the shipper’s business, their pain points, and how you can help.
New marketing applications. Historically, marketing has been a tool for increasing sales and brand building; however, it can be applied in other ways. Marketing can educate the local labor pool over what 3PLs do, then attract a larger and more qualified pool of applicants. Instead of focusing on “a sale,” marketing would try to a) create a positive image of your 3PL as an employer, b) increase awareness of career opportunities, and c) increase the size of the qualified applicant pool. This was especially important important when freight volumes spiked post-Covid.
Where we are going.
Three likely marketing changes are microsegmentation, breaking down/outsourcing marketing functions, and increased non-generative AI applications.
Microsegmentation. In the past, shippers were often segmented by type of load/equipment needed (TL, LTL, oversized, etc.), or by a narrow niche. The next logical step in segmenting markets is microsegmentation: creating fully customized services for a single customer. Some freight brokerages (especially asset-based brokerages) already do this with large shippers. Microsegmentation creates single shipper segments, then offers a specific set of services tailored to the specific needs of that shipper. In other fields, microsegmentation is found in high value products and services where service quality is critical.
Breaking down and outsourcing marketing functions. Freight brokerage is the result of shippers choosing to outsource their transportation services, and to a lesser degree, carriers choosing to outsource their sales function. It should not come as a surprise that some 3PLs may conclude that instead of hiring a marketing director, social media manager, some part-time content creators, and CRM specialists, smaller 3PLs may choose to outsource some of these roles. Some social media managers may be outsourced, especially in smaller companies. Part of this rationale are skill levels and turnover. It’s hard to find someone who can manage social media AND who understands 3PLs. Some social media managers find it hard to advance within their small to mid-sized 3PL, and that leads them to leave for more opportunity. The 3PL must then start searching and onboarding a new employee.
Non-generative AI applications. Non-generative AI describes an artificial intelligence system that can be trained to mimic human decisions, set prices, or interact with humans. This is contrasted with generative AI, such as Chat GPT or AI image programs, which create something new based on a series of prompts. There are already some non-generative AI applications within the freight industry, such as C.H. Robinson’s in-house system that generates price quotes for simple loads, or an AI application from a company called happyrobot.ai that provides after-hours support for basic inquiries. The limitation so far has been the cost of generating these apps, as well as CRM data quality. Moore’s law suggests prices may decrease customizable AI apps to appear in the next 2-3 years.
Conclusion
It has been a privilege to work with TIA for the past 22 years. Back in 2003, TIA’s marketing training was limited to 4% of a single course (CTB). In 2006, Dr. Joe Hanna (Auburn University) and I created TIA’s first 3PL marketing course, marketing Transportation Brokerage Services (2006). I’ve subsequently worked with TIA staff to create and teach in-person and virtual courses on Marketing Transportation Brokerage Services During Disruptive Times (2022), Social Media Marketing for 3PLs (2024), and Data-Driven Marketing for freight brokerages (2024), plus courses in ethics and refrigerated transport.
Looking forward, 3PL marketing professionals will need more marketing education, especially in emerging areas of 3PL marketing, such as creating/managing marketing dashboards, using AI applications to improve pricing and enhance customer service, and combining data from multiple sources into a central data warehouse used by AI. While these tasks may seem challenging, the majority of marketing professionals are up to these challenges – consider how much marketing change they have already handled!
In summary, I think we can all agree that when it comes to 3PL marketing: “the times, they are a-changin.”
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John Drea (Ph.D., Southern Illinois University; MBA University of Notre Dame) is Emeritus Professor of Marketing at Western Illinois University (2014) and Emeritus Professor of Business at Illinois College (2023). He has worked with TIA for 22 years as an instructor in the CTB program and numerous marketing courses. He lives in Peoria, IL
