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Changing the perception of last mile delivery with Sherpa

Ben Nowlan and the team at Sherpa could never understand why delivery drivers couldn´t provide a more accurate time than between 8am-6pm, so they decided to do something about it.

A year ago they created their on-demand, crowdsourced delivery service for Australian businesses and have been experiencing rapid growth. Delivering over 50,000 parcels in 5 cities, they are on the march and customers are asking for more.

To achieve this rapid growth Ben has created a high velocity inside sales team that is speaking to bricks and mortar retailers and changing their perception of delivery from a necessary evil to a differentiator for their business. The approach is working. The sales team at Sherpa have been helping companies understand the value of Sherpa quality delivery and converting that at a pace that has brought 10,000 customers to the service before their first birthday.

In this interview Ben talks about how Sherpa is creating this rapid growth and looking to diversify their revenue streams with an eCommerce engine, but no matter your stage of growth this is a story worth watching. Ben is a sales professional and delivers many nuggets of sales gold you can implement in your own business.

We hope you enjoy this sales story

For those that prefer to read there is also full transcript is below but here are the highlights;

What is your elevator pitch?

Sherpa solves for last mile delivery and on demand delivery through technology in a crowd sourced network drivers. That’s my 5 second way of explaining what we do. Large, small delivery for us is about anything that going directly to the customer and we’re building a technology and solutions to really tackle large-small delivery from various different angles

When did you first realise this is a problem that needed to be solved?

I think if you would have taken any human being who has had the deal with a courier. Their pain is in the ass. And it wasn’t until in the thick of it now running Sherpa, did I realize actually part of the reason why that is and how that can take place. like many other industries of what’s happened over the last 10-20 years, they started to be disruptive through innovation against “okay practices” and technology, you look at the hotel industry, you look at the taxi industry, it’s much the same in logistics, in fact it’s probably more stuck it’s way for quite some time. So whenever you have to have this experience where you kind of understand where you get a full day gap. We have to take a day off, just to receive a parcel, you think how can you not just tell me when you’re going to be there, that it was one of those frustrating things. But then I spent some time at a group and had a lot of experience and interaction with the 3PL (third-party logistics), the logistics side of out of the business, and then I started my own ecommerce company. And as I went through those couple of experiences and businesses, I realized that there was a bigger problem to solve in solving large-small logistics. To be fair, at the time I didn’t really even know what I meant. I just thought let’s make a better shipping experience. I happen to be doing a talk on this topic at a workshop in Sydney and there was a guy in the crowd who had a similar idea and a month later, we agreed to go on a business together. And now a year later, which our first birthday for Sherpa is tomorrow, we now have grown nationally in 6 cities, 50,000 deliveries – by far the most dominant player in our market and expanding internationally, and that comes back to when you identify what our real problem is get your value proposition right and focus on that. That’s how you solve a real problem.

Can you tell us more about your revenue sales story?

If you’re talking about this tactically then it is a soft skill. We are approaching a fragmented market which is the SME market. They’re all small business owners who are quite infamous for being finicky around the around technology they use. I focused really early on and putting a sales arm together to go out, I’m really trying to educate these businesses and change behavior, because a courier service is seen as a necessary evil. Courier is the one of the challenges that we face, the courier’s only value proposition in the market is that who can do the cheapest price? It’s been essentially reached to the bottom for the last 50 years. You’ve got people out there doing deliveries for $3-4 a pickup. It’s ridiculous. What happens is that’s the reason why they system is broken. There is no innovation, there’s no education, what’s the cost to move a parcel and most of these businesses are running at a loss. So we needed to get in there, re-educate that the delivery is more about how your customer experience and then really educate on what this done. So we did that really well, in the initial stages. And sales process for us was just getting their and we really had to deal with a lot of price objects initially by really shifting the discussion where we’re biased toward our own solution. This is what I talked with my own sales people. But also I did talk to other companies on how you move the needle on, what’s the value proposition that they need to focus and distract it away what can be often smokescreen objection – price, I just need this and this. So when we really push through that, that old curve and started to hit the momentum part of it, it was a really exciting time for us because suddenly people are valuing quality over price. The research shows that the largest indicator or the largest factor that makes up a purchasing decision is actually the experience itself. Only 9% on purchasing decisions are made up of value to price ratio. And this is one of the things that I was so adamant on hammering into my sales team now. And so now I wouldn’t say our pitch has changed, we’re just getting so much more focused on how we are trying to help a business own the ecosystem of delivery. In fact our pitch is too probably the same as it was in day one.

What is your biggest challenge in sales?

Our biggest sales challenge is linked to something that – we need to maintain a really strong balance between the number of active customers. so really nurturing our current customers, the average value of them, the number of uses they use versus our new business and so you get really caught up into new business activation and then you have a bit of a leaking bucket. So I’m really focused now on ensuring that we are balancing that out because instead of wake up 60 days later and realize that some of our key customers hadn’t used them in a month, then hang on what happened then. So we’re really focused and heads down on ensuring we’re not so distracted, so caught up in attaining market ship, you got to nurture what you have. We all kwon it’s four times the cost to acquire a new business than what it is that to nurture that one you have. So that sounds challenge right now and it’s very hard in small business because they can be really price sensitive and they can be sensitive  to new things on the market, the new shiny things. So we are focused right now, our biggest sales challenge is on, how do we call it operation loyalty, how do we maintain their focus on our value proposition.


FULL TRANSCRIPT

Andy: Hi everyone and welcome to another installment of the Startup Stories – a series of interviews with B2B founders and interpreters about their sales story. We’re super excited to have another Aussie Startup here today in Sherpa and we’ve got their CMSO, Ben Nowlan. It’s a pretty weird title.

Ben:    It means nothing. The three of us who started the all have our role and my focus is on sales and marketing. We one night decided to call myself Chief Sales and Marketing Officer (CMSO). At the end of the day, it doesn’t mean anything. We found the business field, we all take ownership in how we grow and how we do it and we have our specifics on what we can focus on. Anyway, most people ask what is CMSO and that’s why I’ve tried to leave that off my business card now because it confuses people and distracts the meetings that I go to.

Andy: It’s a conversation startup and that’s what you want in a business card.

Ben:    That’s right.

Andy: We normally start these off to help people understand a little about your business by hitting us with your elevator pitch.

Ben:    In simplest form Sherpa solves for last mile delivery and on demand delivery through technology in a crowd sourced network drivers. That’s my 5 second way of explaining what we do. Large, small delivery for us is about anything that going directly to the customer and we’re building a technology and solutions to really tackle large-small delivery from various different angles. Right now here in Australia, we have thousands of drivers, then we offer a pure play on demand crowd sourced business to help businesses basically access a plug-in play delivery solution. For what we overlay is that is the seamless technology – the ability to allow a business to control delivery from store to door. that’s really a big part of a value proposition and in approx. 2016, we will be releasing a bunch of different products such as Fleet Management tools, different modules to help a business, is basically be better and more effective in managing delivery.

Andy: Yeah, okay, it sounds like it’s a growing into some very new and exciting areas.

Ben: Yep. It’s been a really really interesting ride for us. We always had the business plan down in three stages:

One, build our fleet around, personal fleet that really just solve the large-small delivery through our own crowd sourced network.

Two, build some more tech.

Three, is where it gets really exciting and that’s what we’re in the process of planning now as we really start piecing together in our Marketplace. That’s actually where the business farm becomes more disruptive, linking in without the courier isn’t really solving core problem which is what we say is, driver liquidity. I don’t mean to get all technology and using a jargon from our industry on whoever listing or yourself, ultimately we don’t need to compete with the courier or another on-demand business, let’s actually look at what the core of the problem is, that’s everyone trying to be more efficient in a cost way and time wise with their own fleets.

Andy: Yeah. When did you guys just realize that this is a problem that you wanted to solve?

Ben:    I think if you would have taken any human being who has had the deal with a courier. Their pain is in the ass. And it wasn’t until in the thick of it now running Sherpa, did I realize actually part of the reason why that is and how that can take place. Like many other industries of what’s happened over the last 10-20 years, they started to be disruptive through innovation against archaic practices and technology, you look at the hotel industry, you look at the taxi industry, it’s much the same in logistics, in fact it’s probably more stuck it’s way for quite some time. So whenever you have to have this experience where you kind of understand where you get a full day gap, where have to take a day off, just to receive a parcel, you think how can you not just tell me when you’re going to be there, that it was one of those frustrating things.

But then I spent some time at a group and had a lot of experience and interaction with the 3PL (third-party logistics), the logistics side of out of the business, and then I started my own ecommerce company. And as I went through those couple of experiences and businesses, I realized that there was a bigger problem to solve in solving large-small logistics. To be fair, at the time I didn’t really even know what I meant. I just thought let’s make a better shipping experience. I happen to be doing a talk on this topic at a workshop in Sydney and there was a guy in the crowd who had a similar idea and a month later, we agreed to go on a business together. And now a year later, which our first birthday for Sherpa is tomorrow, we now have grown nationally in 6 cities, 50,000 deliveries – by far the most dominant player in our market and expanding internationally, and that comes back to when you identify what our real problem is get your value proposition right and focus on that. That’s how you solve a real problem.

Andy: Sounds super exciting journey and it sounds like it’s going in the right direction you guys. Talking about that really strong pitch about that value proposition. It also sounds like that’s probably evolved a little bit in your year that you guys have been around. How do you approach your sales at the moment?

Ben:    If you’re talking about this tactically then it is a soft skill. We are approaching a fragmented market which is the SME market. They’re all small business owners who are quite infamous for being finicky around the around technology they use. I focused really early on and putting a sales arm together to go out, I’m really trying to educate these businesses and change behavior, because a courier service is seen as a necessary evil. Courier is the one of the challenges that we face, the courier’s only value proposition in the market is that who can do the cheapest price? It’s been essentially reached to the bottom for the last 50 years. You’ve got people out there doing deliveries for $3-4 a pickup. It’s ridiculous. What happens is that’s the reason why they system is broken. There is no innovation, there’s no education, what’s the cost to move a parcel and most of these businesses are running at a loss. So we needed to get in there, reeducate that the delivery is more about how your customer experience and then really educate on what this done. So we did that really well, in the initial stages. And sales process for us was just getting their and we really had to deal with a lot of price objects initially by really shifting the discussion where we’re biased toward our own solution. This is what I talked with my own sales people. But also I did talk to other companies on how you move the needle on, what’s the value proposition that they need to focus and distract it away what can be often smokescreen objection – price, I just need this and this. So when we really push through that, that old curve and started to hit the momentum part of it, it was a really exciting time for us because suddenly people are valuing quality over price. The research shows that the largest indicator or the largest factor that makes up a purchasing decision is actually the experience itself. Only 9% on purchasing decisions are made up of value to price ratio. And this is one of the things that I was so adamant on hammering into my sales team now. And so now I wouldn’t say our pitch has changed, we’re just getting so much more focused on how we are trying to help a business own the ecosystem of delivery. In fact our pitch is too probably the same as it was in day one.

Andy: Are you guys charging a premium fee for service based on those others traditional large-small?

Ben:    We do an algorithm, it’s based on time and distance. We use mapping technology and in some ways it’s somewhat similar to a ‘right sharing business’ where you essentially looking at demand as well. We don’t have pick hour, we use traffic live data. So in our system you can send a bunch of flowers Tuesday morning at 10 o’clock into the city of Sydney from say, the Double Bay or wherever you are in the world, 3 couple of kilometers might cost you $8-10, but you send that Friday afternoon at 5 p.m. again wherever you are in the world and there could be hours and traffic and that poor driver has to sit in traffic for an hour and earn $6-7. So we take that stuff into consideration into our algorithm but ultimately we have some predictability. You send a couple of case, it will cost you X. you send it further, it’ll cost you X. in some places it’s actually comparable. Somewhere price may end up being cheaper. But if you really want to send it further, at the pace that you want it of course, you need to pay more.

But we try to educate our businesses on how to sole delivery. Our price is if $15, we teach businesses to charge $20 for it. So you’re building delivery out of your business and there should be a cost center and also be a revenue generator for passing that cost on. And that’s how we’ve been really successful in creating our own value proposition and our own defensive mechanism by teaching businesses how different way we look delivery. I wouldn’t say we charge a premium, it’s just how we integrate and make that a part of the business.

Andy: I really like the part that you took there and enabling businesses have their own differentiators. Using delivery not just to generate revenue but set their own product part. When you go on educating customers, it can be quite tough especially when you’ve got these traditional older who are little bit scared at technology piece. Does that mean that you’ve now spent more time actually out there, like pounding with your sales team pounding pavements as opposed to having phone conversations?

Ben:    It’s really really good question because it’s something I’m hugely passionate about and I think, in any business, there will be your cost of sale versus your revenue will be higher particularly in startups in your initial phase. So going up there, forging into a new market, going out there and proving your worth, proving product market feed. So you’ll see the graph where you put your revenues that way and your cost of sale right up here. So there is a huge amount of breaking down barriers and breaking down that fragmentation and that lack of technology acceptance for small businesses because if you think of it, they find it difficult to deal if they’re poor in sales sometimes. So really getting in there and trying to say, hey, rather than just calling a courier, you are going to now log in delivery and you put your credit card information was actually quite difficult. however one of those things that I’ve been fortunate to have in my experience when I was working in a consulting firm and I consult on best practice sales, development and sales approaches was that you don’t need to be face-to-face or you can try and do most of the conversations over the phone, so what I’ve been really teaching my team was to help lower our cost to sale but move our speed during that initial phase, was we do do most of the work over the phone and only get face-to-face at that very last session if we need to. But ultimately the same conversation, the same psychology and emotional flow still happens over the phone. so there’s no real reason why you can’t bring that conversation forward to a 30 minute phone rather than delaying a sales process and setting up a meeting and that meeting my dropping off, so we’ve actually been very good at seeing up how our sales structure is around that. however, now that we’re pushing into the market and moving through some of the growth chasm, we now need to know that we need to automate this process and we are still to really looking at how we break even reduce our cost of sale down even more, start looking at, how do automate signups, automate activations, automate repeat use without even sales because having a sales force is quite costly particularly in small business where the long term value can be that high.

Andy: absolutely. That is really great information. Lot of people aren’t really approaching it at their sales on that level of trying and talk about how that increased velocity through an insight model. That’s something you guys are approaching quite well. When it comes to increasing the bridges of trust as far as to breaking it down, how are you getting your inside guys to be able to do that with the customers that are speaking to over the phone?

Ben:    This is the favorite part of my discussion around sales, I’m most passionate about, when I do sales coaching and training externally, I actually focus on this part alone. When you’re speaking to someone, there’s an emotional state that they go through. If I had a walkway behind me, a defensive intro to feeling like bit this illusion to drowning to hope for the future, that’s actually the term that I use. So what I focus on when teaching my team, how to listen to those excuse, if you take explicit and implicit needs, if you take understanding what someone goes through even when you’re face-to-face with them, they go through feeling like they don’t need to make a decision or they don’t need a solutions so there’s initial defensive wall put out which usually smokescreen objections and understanding then how you need to move them away from those objections and really dig a little bit deeper and [Unclear 0:15:31]. If you’re teaching someone something they didn’t know whilst then focusing on the fact that they might be doing something wrong in a matter of words, you actually dragging and throwing emotional state over the phone. It’s no different than having a face-to-face conversation. but if you don’t know how do that and can’t imagine what someone is going through and know that if they are objecting, it’s a smoke screen, you know that if you heard them use specific terms like “yes, we do need that solution” and if you know that you’ve got your the default set of questions to poke at that problem, you naturally get them through. and sometimes you’re getting through innate meaning, sometimes you’ll take you an hour on the phone, but it’s much quicker than pre-conversation and then a meeting three days later and then a close meeting another 7 days later which is a waste of time and that goes back to the blowsy sales cycle. That how I focus on building that report and understand the emotions state that they are going through and then just really just owning that conversation because salespeople, the number one thing they’ve got to do it is be in control the whole time.

Andy: Absolutely, which is so much hard to do these days. They’ve got all the information. They’re able to go and find that and have conversation with other customers and with other competitors and come on with everything.

Ben:    I have a point on that.

Andy: Running short of time. What your biggest sales challenge at the moment?

Ben:    Our biggest sales challenge is linked to something that – we need to maintain a really strong balance between the number of active customers. so really nurturing our current customers, the average value of them, the number of uses they use versus our new business and so you get really caught up into new business activation and then you have a bit of a leaking bucket. So I’m really focused now on ensuring that we are balancing that out because instead of wake up 60 days later and realize that some of our key customers hadn’t used them in a month, then hang on what happened then. So we’re really focused and heads down on ensuring we’re not so distracted, so caught up in attaining market ship, you got to nurture what you have. We all know it’s four times the cost to acquire a new business than what it is that to nurture that one you have. So that sounds challenge right now and it’s very hard in small business because they can be really price sensitive and they can be sensitive  to new things on the market, the new shiny things. So we are focused right now, our biggest sales challenge is on, how do we call it operation loyalty, how do we maintain their focus on our value proposition.

Andy: Very cool. Have you guys deployed any technology to assist you there throughout the platform?

Ben:    We’re in the process of doing it right now. There is a platform we are going to use called “Auto Pilot” which is a trigger based communication. It’s a great communication tool. It’s getting setup and deployed over the next 14 days and that will be a part of that. how many users in 7 days, how many users is in 14 days, how many activated, every little trigger will be will be setting up automatic communication. Because physically before sales, we have 10,000 businesses. You just can’t [Unclear 0:18:47]. That’s been one of the reasons why that’s our biggest sales challenge.

Andy: It’s definitely a high customer to salesperson ratio. Thank you very much for your time. I really appreciate your sharing. Where can people go to learn more about Sherpa?

Ben:    We have a website – sherpa.net.au. You can follow us on Twitter – getasherpa. Follow us on Instagram – getasherpa. On Facebook – getasherpa. Happy to answer any question, if anyone wants to follow me at getasherpa.net.au. Thank you and thanks for everyone listening.

Andy: Brilliant. Thanks for your time.

Ben:    No worries. See you later.

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