One is strong in the excellent operation of streamlined processes to match
customer needs. The other in listening to customers and creating unique solutions. “The potential is enormous,” according to the engine room. And proof of concept has already been established.
Learn from one another
If you draw a triangle and write “Operational Excellence” at the top, “Customer Centricity” in the left corner and “Product Leadership” in the right, then DSV is closer to “Operational Excellence” than the other fields: Customer needs are matched to already existing services. This keeps the price down and you deliver what you promise.
UTi is closer to “Customer Centricity”. The solutions are usually customer-specific: customised set-ups where top priority is given to quality. By contrast, the unique solution is often more expensive to deliver.
"UTi’s approach is different from DSV’s. You have to accept this and learn from it, otherwise you will miss an opportunity. We need to find the balance between our two organisations, but when we do, it will greatly benefit our customers," says René Falch Olesen, CCO (Chief Commercial Officer) with executive responsibility for Global Accounts, Global Marketing, CRM (Customer Relationship Management) and deeply involved in various support functions for the sales organisation, which today has 2,300 full-time employees.
Complement one another
René does not consider UTi a ‘synergy case’, but, as a complementary business, ‘the power of two’. And the potential is enormous, because the two companies supplement one another in a wide range of areas, which can be directly converted into benefits for customers:
UTi’s European and overseas customers gain access to DSV’s European road network, DSV gains access to UTi’s expertise in South Africa and to extensive trucking and warehousing in the US, and DSV’s presence will be greatly boosted in Asia, for the benefit of the more than 450,000 customers in the merged company.
"There is no doubt about the potential. All regions are tremendously strengthened compared to previously. There will be minimal overlapping among customers. Many of the previous UTi customers originate from the US, whereas many of our customers come from Europe, which is very positive," René Falch Olsen says. He is in the process of putting together the teams which from now on will manage customers who previously did business with both DSV and UTi.
The pain needs to subside
This is far from the first time that DSV must transform two businesses into one. The trick is to prevent customers from being negatively impacted by the merging of two systems. Experience shows that the process must be quickly brought to an end. This will shorten the pain and minimise the impact on customers. René is optimistic, and the transaction figures show that it is possible to maintain and improve quality at that – even during changeable times. Since announcing the acquisition of UTi, customer loyalty (net promoter score) has steadily risen, and the percentage of dissatisfied customers has declined by 25%.
"During this same period, our turnover has increased and our churn rate has fallen (customers remain with DSV for longer periods of time) has fallen, proving that it is possible to integrate the systems without negative consequences," René assures, and encourages everyone to focus on the most important factor:
"Keeping your customers and making sure they are pleased and satisfied. We have to make sure that everyone receives the product as promised and expected."
The integration of DSV and UTi will also create new opportunities for selling across the organisation: The combined company will be able to provide more services to customers than they were capable of individually. But it is still too early to launch major, targeted initiatives.
First things first
"Both companies’ customers will gain access to new markets, products and services that did not exist previously, and some customers will be quick to seize the opportunities and request additional services. Needless to say we must exploit these gains. We just have to make sure that we deliver exactly what the customer has requested before we try to jam new things down their throats. We do not want to be put in a situation where the customer rightfully asks why he would be interested in additional business, when we cannot even deliver what we have promised," he says, adding that the first thing to do is "get to know ourselves and one another to reinforce our foundation."
"The pitfall is if we do not find the area where operational excellence and customer centricity converge, i.e. if we go in and tell the customers that they should merely see us as they always have. Our two companies take different approaches to things, and both of us need to learn from this and accept it, otherwise we will miss out on an opportunity. To put it bluntly, our organisation is a little simpler, whereas UTi is more sophisticated. We have to find the middle ground where both companies’ areas of expertise are best utilised," he says.
In fact, there is a recent example that this is actually possible. Just before the acquisition, UTi was in the final round of a large global call for tenders involving a sweeping transformation of a customer’s logistics. After the UTi acquisition was announced, the customer expressed concern about whether UTi would still be able to carry out the task as described.
"We held a meeting – involving DSV, UTI and the customer – and the result was clear: We were not moved further back in the ranking. The customer had absolutely no concerns afterwards. It was proof of our concept," René says, frankly admitting that UTi initially took an entirely different approach to the customer’s needs from DSV, which never made it to the final round. It was not until after acquiring UTi that DSV entered into dialogue with the customer, which has yet to make its final decision.
"It proves that we can achieve something together that was not possible previously. UTi’s approach and our performance...mixing these two elements boosts us into a different league," he says.