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Simple corporate pricing, no RFPs, no audits

Oct 02, 2018
An alternative to auditing: this might be the holy grail for many corporate movers. In this story Steve Jordan talks to PricePoint, a US-based company that just might have the answer. For many, it already has.

Simple corporate pricing,
no RFPs, no audits

An alternative to auditing: this might be the holy grail for many corporate movers.  In this story Steve Jordan talks to PricePoint, a US-based company that just might have the answer.  For many, it already has.

It was around eight years ago that Ryan Keintz, who had extensive pricing experience in the international moving industry, sought an alternative to endless RFPs and spreadsheets to make the pricing of household goods moves simpler and more transparent.  His company, PricePoint, was built initially to help movers share and access origin, destination and freight rates more easily to reduce the time spent on what was a laborious process inherent with opportunities for error.  Today the company has around 700 movers worldwide using PricePoint to handle day-to-day costings and provide the raw data for quoting major corporate contracts.

In 2016 Ryan saw the potential of PricePoint to create instant prices for RMCs and corporate clients on which they could rely, without making unreasonable demands on movers or engaging in time consuming RFPs and demoralising post-move auditing. It was at this time that Ben Heller, who previously ran Accenture’s global mobility consulting practice, joined as chief customer officer, later becoming CEO in 2017.

How PricePoint works
Although the algorithms that drive PricePoint are complex, the process is a simple one. “It’s like Expedia for the moving industry,” said Ben.  “The corporate account or RMC simply keys in an origin, destination and volume/weight allowance and the system instantly provides quotations from every moving company on their panel.”  Each corporation or RMC would choose the companies that it wants on its panel based on previous experience and their areas of specialisation.

This means that the mover is then contacted with a booked move, not a request for a quotation or an RFP for a larger contract.  The mover can then survey the move in the knowledge that the job is secure.  The final charged figure is based on the company’s filed rates for the actual weight/volume collected.  “It’s reduced the average turnaround time from requesting bids to awarding the move from two weeks to zero,” said Ryan.  “Now that the moves are awarded instantly the mover can work on obtaining containers, parking permits, allocating crews and vehicles, etc.”

Including supplemental charges
Many contracts require quotations to be ‘all inclusive’, with no allowance made for long carries, high rise, shuttle services, crating, etc.  These charges have to be assessed as part of the contract and the mover has to hope that it has not underestimated. “My objection to the all-in pricing methodology is that it requires movers to function as risk management actuaries rather than customer-focussed movers,” said Ryan.  “Even worse, the type of client-specific data the movers are supposed to analyse is typically only available to the incumbent mover. If a non-incumbent mover wins new business with lower pricing, it's likely because they under-allocated for unknown variables, leaving them exposed to a minefield of financial losses.”

But Ryan explained that with PricePoint he wants movers to be assured of reasonable and reliable profit margins, allowing them to focus their attention on the customer.  “We expect movers to charge for these supplemental items,” he said. “But we measure how much they charge and we let them know that we are measuring it. It forms part of our KPI reporting so we can assess, on average, how much each company is charging for these items.  It’s totally transparent and so is self-policing because we are showing the movers that if they are trying to exploit this, they will be found out quite easily.” 

Ryan Keintz (left) and Ben HellerRyan said that in future it will be possible for PricePoint to build in a forecast for supplementals based on each mover’s record. “So if there is a mover who is trying to exploit supplemental charges we will build that into their upfront bids in the future. This will, effectively, price themselves out of future moves.”

Of course, it is possible that a company could be penalised just by having a run of particularly difficult moves however, on average, any anomalies like that should even out. “The intention is to avoid taking everyone through this horrible process of micromanaging every charge that comes through,” said Ryan. “It’s horrendously wasteful and unfair to movers.”

Handling quality
Of course, choosing a moving company should never be all about price.  PricePoint manages the quality aspect by recording post move survey reports and insurance claims to give each company a star rating that is clearly displayed with the prices quoted.  This makes it easy for the procurement department to choose the lowest quote if that’s what’s required, or a higher figure if it’s felt that a particular company’s expertise is needed.  “We want to help the user justify paying more for a quality mover,” said Ben.  “There are some jobs where price is not relevant and only quality matters. Others are very price conscious.”

Working with movers
Ryan said that he sees his company’s growth coming through cooperation with moving companies who see the benefit of working in a transparent, efficient way without the need for audits or RFPs. “We don’t want to cold-call corporate buyers,” he said.  “We need movers to introduce us to corporations and RMCs when they have identified strategic opportunities for new business: where they can leverage PricePoint technology for mutual benefit.  It’s a way for them to reduce their internal overhead, streamline costs, simplify the purchasing experience and win new business.”

The company’s sales process is to be so mover friendly that movers will recommend the PricePoint system to their corporate accounts.  The customer simply keys in a request for each move individually and gets an instant response. The mover gets paid for the work done at the rates it files on the system.  Any additional charges are billed through on the final invoice.  “It’s a win/win for both parties,” said Ryan.  “There’s no need for an RFP, no price matrices, no need for post move auditing and the mover gets paid fairly for the work done.”

Making it easy for buyers
Drawing on his purchasing experience Ben said that he believed the reason buyers wouldn’t go direct to movers in the past was because the process was too complicated and they didn’t fully understand it. “It was always my opinion that going directly to the movers would save a lot of money rather than going through RMCs who charge fees,” he said.  “I believe that by partnering with movers we can give the clients confidence so they can happily go direct to a mover because it’s in their best interest.”

PricePoint is a virtual company, with a team of seven people working remotely around the US.  Movers are charged a small licence fee for the use of the PricePoint system and most corporations and RMCs pay the company a 2% charge. The system is already being used for thousands of corporate moves worldwide. The company is expecting to have a US domestic household goods and containerised model in place soon. “Our experience has shown the existing pricing models to be ineffective, frustrating and cost intensive,” said Ryan. “PricePoint makes it simple, transparent, flexible and accurate without having to subject suppliers to a rigorous audit on every job.”

For more information contact Ben Heller at: ben@pricepointmoves.com

Photo: Ryan Keintz (left) and Ben Heller

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