TMS & CRM Integration, Double Brokering, & Commissions | Final Mile #33

Freight 360

March 5, 2024

Nate Cross & Ben Kowalski answer your freight brokering questions and discuss:

  • TMS & CRM Integration
  • Why Double Brokering Happens
  • How Many Leads Does a Pipeline Need?
  • Account Manager Commissions

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Show Transcript

See full episode transcriptTranscript is autogenerated by AI

Speaker 1: 0:19

Hey everybody, welcome back for another episode of the final mile, where we're taking all of your questions that you send in and we're picking out some good ones and answering. We got four great questions today. But first take a moment, subscribe, share us with everybody else that's in your office or in the industry that you know, and check out our sponsors in the description box to help support the channel. And if you want to learn more about Freight 360 and our training, put our website Freight and you could check out the Freight Broker Basics course. It's an online self-paced course that'll help you get started in Freight Brokerage and grow your business. Our first customer or, I'm sorry, our first customer our first customer question.

Speaker 1: 1:05

This came via email and she asked is there a TMS that integrates CRM capabilities for prospecting? So this is a great question, and so my brokerage uses MacLeod and I get this question from our agents all the time. They're like, oh, there's a CRM in here. The reality is, a lot of TMS companies are really good at creating transportation software and they aren't great at making CRM software. They might have some little CRM module in there just to manage customers in general, but not with all of the functionality of follow-ups and tracking conversations and all of that stuff. What's your experience with that then? I'm curious.

Speaker 2: 1:53

I would maybe disagree a bit and say that there are lots of companies that make TMSs. I don't think lots of companies make good TMSs. I think there are a few that are good. I think, to be honest, most of them are designed by folks that didn't ever broker Freight and don't know many use cases. So this is my personal opinion. I think most of them are designed from the developer standpoint, not the users. But I do think there are a few that are very good and I think those tend to be people that have worked in the industry and things.

Speaker 2: 2:28

But to this point it's great when they're integrated because they're your two systems, your CRM. If they're separate, is the funnel that feeds your TMS. So knowing when a prospect becomes a customer and having to jump between two systems is problematic and kind of a pain in the ass. There are definitely a few that are integrated. We looked at one this week MVMT, mvmt. Yeah, and we talked about this too. The developers of MVMT, m, v, m T right, I guess movement right, like well, you know the developer and the one of the designers we were talking with yesterday, like he has a lot of experience at the larger brokerages and I think Echo and we talked about the problem right in even bigger brokerages, when they're not connected, and most bigger brokerages don't have them connected, and then-.

Speaker 1: 3:22

Or they only go one way, but not the other way.

Speaker 2: 3:24

They go one way and not the other Right? So like, if a customer goes inactive, they don't often get sent back into the prospecting funnel, or the data gets lost, or it only worked one way and not the other and it creates lots of issues, lots of prospecting disputes between somebody that is now working with a company and somebody else is trying to onboard with a branch. We used to run into that constantly. So, like, having them in one place is very, very valuable, if it is doable, for sure.

Speaker 1: 3:51

Yeah. So, like, one of the things-one of the things that I get frustrated with now is, like in the cloud, we-if somebody-let's say somebody leaves the company, right, they get fired, they quit, whatever. If somebody new comes in and wants to prospect the customer that they already had or a prospect that somebody else had already had in the past, they got to create a whole new record. So now you don't have like a paper trail that shows like oh, it was this person's on this day, here's the amount of revenue they did, or here's where they got in the prospecting phase. So it is frustrating, and I, like, personally, have always used an external CRM and just done it manually. I am glad, though, you're right, we checked out movement this week, this week. This is pretty cool. I think the same goes with-so I guess here's my answer.

Speaker 1: 4:42

Is there a TMS that integrates CRM and TMS? Yes, a lot of them do. What I think is most important is your personal preference as a broker. This is why I always recommend it, if you're looking at TMSs or CRMs or a combo, do a ton of demos Like do your research, because these are the tools that you're going to be using day in and day out for a very long period of time and it is hard to switch a software provider when you're so used to, whether it's just you and you're ingrained with it, or if you're company and all the employees or individuals working there are so used to one system, then you just switch.

Speaker 1: 5:17

There's a lot of resistance to it. Some of them talk from CRM to the TMS, but not back. Some do both. Some don't do that at all. So I would just say, depending on what's important to you and how you're going to use it, play around with different software companies out there. There's a lot of new web-based TMS providers that have some really cool functionality. With that you're going to get a ton of different varying pricing models and all of that. There's a lot that goes into vetting out what kind of TMS you want to use. So that's my take on it. Next question I love this one If double brokering is illegal, why is it so common? Is there a legal action to prevent this? This was from our Facebook group.

Speaker 2: 6:06

It's a good question. I need to be honest. It is a good question For somebody new. It's a good question For somebody new?

Speaker 1: 6:10

yes, and that's a lot of our questions from Facebook come from folks that are new to the industry. The reason that it's so common is that not much has been being done about it. So just to take you back the 2022, when it got really big, that was my first time I went to the TIA's policy forum in DC. It was in September. One of the talking points to all the congressmen and women was we've had 80,000 complaints to the Department of Transportation about illegal brokerage practices and not a single one was investigated at that point. 80,000. And that's just what was reported. There's way more instances of it, but the reason why it was so common is that nothing was being done about it, and what's happened since then is you've seen a lot of solutions and SOPs go into action to help prevent a lot of this fraud, and that comes down to identity verification and looking at reporting things like the TIA Watchdog list or products like Highway. We had Michael Cainian talk about Highway a few months back. So things like that happened.

Speaker 1: 7:25

But the reality is the federal government it's our government and the FMCSA is a government entity, which means that they are not incentivized to go above and beyond to solve problems that exist in our industry. Unless there's enough pressure put on them, that would be. Their incentive is they're getting heat from their constituents. That's why we continue to lobby every single year. Chris Burroughs from TIA, who runs their government affairs division they're like almost every single week lobbying with somebody about these issues that are going on and I think since Ann Rankies come into the TIA and they've done a really great job with that division and the relationships that they're building with people that sit on the different Senate and House committees that actually create legislation All right.

Speaker 1: 8:17

So, all that to say, I think we're headed in the right direction. It's going to be a continuous effort on everybody's part, right. Eventually, I think double brokering will not be as prevalent as it is now, but I think fraud is going to continue to evolve and the bad actors are going to find new ways to do stuff, new ways to do plus and the software companies are going to create new ways to stop that. So it's going to be a constant game of staying up to date with where we're vulnerable and how we're getting scanned by people. So that's why it's so common is because not much has been being done until recently.

Speaker 2: 8:53

Well, here's the other reason too that I found right Is that, like on the individual instances, they're at a fairly low dollar amount but in aggregate they're a lot right. So, for example, right One of the instances that I was involved with the client last year, they got double brokered two loads so give or take it was like eight or $10,000 for both of them. Right Now that same double brokered scam, I think the insurance agent said they got upwards of half a million dollars in 10 days. But if you think about it, right, every individual carrier it doesn't usually make sense to pay an attorney to fight for $5,000 or $4,000. Because again, you're weighing the time and the cost of the legal battle to the five grand. Oftentimes it just makes business sense to move on and I think that's one of the reasons why it also happens. A lot is because one individual instance it's usually just cheaper to pay it to move on to keep business moving.

Speaker 2: 9:49

But to the industry, that same double broker might have hit 25 brokers in a 10 day period and a lot of fraud. And again, from a government standpoint it's really hard to catch these people. It's also really hard to find out where they are because they're shutting them down very quickly. So, again, yeah, there are laws or regulations on the books, but there is no enforcement as of now, and there are lots of ways that other third party companies outside of the government are preventing this. And again, we're coming up with solutions that are very effective in some regards, right. Others that aren't very effective at all but are being advertised as very effective, right. So listen to our other episodes to hear our opinions on which products we use and why. But I mean, I think we're moving in the right direction anyway.

Speaker 1: 10:36

Yep, I agree. I agree. Next up, how many leads should I have in my pipeline? I'm going to let you take this one. I've heard you so many times talk about where somebody should be before they start, but I will say this is don't overcomplicate this. There are people that are just afraid to pick up the phone and therefore they're like I need to have 2000 leads before anything. Or people that just go out and they try to speed through this step and then just buy a crappy shipper list. But what is your opinion? For someone that's new, how full should their lead list be before you feel like they're in a good spot to be actively prospecting and not wasting time?

Speaker 2: 11:19

So the most common mistake I see with newer brokers is that they call leads too infrequently and move on too quickly, and an example of that is we recommend, by the way, you should have about 200 to 250 leads before you start prospecting. That's a good number for about a week's worth of prospecting and that gives you enough that you can go. Now the most common thing that we see is a new broker calls all 250 leads, speaks to 10 of them and then calls all those leads dead and finds another 250. The important piece is that you're following up with your leads until you reach a point where you've either disqualified them meaning they're not a good fit, you spoke to them and it won't work or you spoke to them and you qualified them and you're going to progress. Once you've disqualified them, you move them out of your prospecting list and you add another one in to fill that bucket of your 250. In fact, I wrote a YouTube video on this this morning. It'll be out in the next couple of weeks on what disqualifies a prospect and how to do this. But where your goal and objective is is you've got 250, you're calling, call it 50 a day, so that's your 250 for your first week Maybe you speak to two or three every day. The rest no answer. Maybe you left the voicemail, maybe nothing. You're going to follow up with those again next week.

Speaker 2: 12:35

So you're only adding a few and maybe not even eliminating anything in your first week. Call all of those. The next week, maybe your third week, you've disqualified some and you can refill that bucket. But it is a race to get to a place where you are actively engaged in a conversation, not emails. You are speaking to somebody, they're speaking to you, you're having conversations with them. That's an active prospect.

Speaker 2: 12:59

You are in a race to get to as many of those as you can as soon as possible. So in your first month or two maybe you have a handful, but by six, four to six months you should have at least 50 to 75 active leads in your funnel, meaning you've spoke to them once or multiple times and they're in some stage between I spoke to them once and they're a customer, and then you just actively work those 50 to 75, you disqualify a few every week, hopefully, and you add a few new ones because you've connected with people. You've been trying to reach for a few weeks and you actively work that like stable of prospects and they start to fall into customers and then some get disqualified.

Speaker 1: 13:40

And if you want a deeper dive on the prospecting side, episode 232 that recently came out we did. I think it was Strictly on Prospecting, yeah, and we've got plenty of other ones. Just go to our website,, and type in prospecting or sales or prospect in our search bar and there's dozens of content around that I would say this Nate too on that topic.

Speaker 2: 14:02

We have gotten more feedback or I have on that episode than anything we've done in recent memory, like literally dozens of people have called, emailed and said this is our favorite video that you've done recently. Please do more of these so we hear you. We will do more content on that.

Speaker 1: 14:17

We will. Yeah, and we understand a lot of you either own your own brokerage or your new brokerage and you have a smaller company and the structure of a mega big box brokerage doesn't exist, and we're an ancillary training outlet for folks like that. So, yeah, good discussion, good question. Our next one is our final question is about money. Show me the money right. What's a typical commission for a sales only role rather than a cradle to grave role? So this, I don't have a right answer. There's no right, or I mean we can give you some examples and some some stuff like that.

Speaker 1: 14:57

This is going to depend on the I'm going to say, probably the experience. Is it a brand new rep? Is it an agent versus a W2? Are you providing them leads? Are they doing their own lead gen? Are they bringing any book of business with them? Let's say we're going with the standard business model of a brokerage splits up, carry your sales and customer sales, and I'm going to look at it from this angle and we'll say they have an average commission. What are the big boxes? Commission pay like 25? Sorry, not commission salary 40, 40, right.

Speaker 1: 15:36

And then a commission. So I would tell you it's probably not uncommon to have, if your sales only you're not covering your own freight 10, 15% maybe if all you're doing is selling and someone else is covering it. 10 is the one that I've seen specifically at certain companies. Now I've seen 20 to 25. If it's Cradle to Grave, you might see even higher than that. It depends on what the salary is. Is there benchmarks to hit? The reality is, though, if you're a W2, there's only so much of the pie that can be given out in commission because of all the other expenses that go into it Training salaries, 401k, insurance tax, employer taxes, right Whereas if you're a 1099, and none of that's provided for you, there's a bigger piece of the pie to be paid out. So, but you might be a. If you're just out there and you're an account finder and they've got a procurement team that covers freight, maybe you can get more, like 25% or something like that. If you're a full Cradle to Grave agent, I mean 70%. It's pretty common out there for the leading agent-based companies, I think, and I would check out too.

Speaker 1: 16:51

We did an episode with Beth Carroll. She's the compensation guru for logistics companies and she's got a book what is it? How to team the compensation monster, or something like that that we both read. And what I like about her take is that there's no right prescribed compensation formula. It is going to depend heavily on how your company is structured, how you want to incentivize people and things of that nature and I remember we had Trey on one of the first episodes that Trey did with us years ago and he brought.

Speaker 1: 17:29

A good point is that, like, people are incentivized by different things, it's not always just money. Some people want to. If you look at even just money, some people want a heavier salary because it makes them feel more comfortable and others want as much commission flexibility as possible because they want to go better themselves. Others care more about I want to be able to work from home three days a week, or I want more time off, or I want fill in the blank, right. So I think it all depends. But the common ones out there you're seeing a modest salary with probably somewhere in the 10 to 15% commission on an account seller.

Speaker 1: 18:07

You also have to look at, like Ben, you and I have talked about this and I talked about it with one of our clients recently. I think, if you look at the, I think there's like three levels of how freight brokering happens, but like three individual roles. And this is I'm not talking about like you're accounting, a back office. You have business development, account management and carrier sales. In my opinion, right, and I said business development, those are people that develop business. They go out there and they find new. They're hunters. They go out there and they find new business. Account managers are more like what'd you call them farmers, right? They're taking what's already there and they're just going to keep watering it and keep growing it and take care of that customer. And then your carrier sales I'm going to go find you trucks for that.

Speaker 1: 18:55

Now, a brokerage can have a cradle to grave model where you do all that. Or you can break it out into sales and operations. Or you break it out like when I my first sales job well, besides Best Buy, which was retail, but my first sales job at a Fortune 500 company and a big distributor. We broke it out that way. We had three levels, just like that. And I mean I started at the bottom. You know, I was like the assistant or the support one, right, but I saw what that business developer did out there on the road trying to meet new customers right, trying to do all this different, these different things. And then you've got your intermediary layer where it's all farming existing business and you know the customers are already used to working with us. They're going to send their orders over and we're going to quote them on this, that and everything. But depending on what this person does and their value is going to heavily change that commission and that's my long-winded answer there.

Speaker 2: 19:55

What do you think you hit on it? I mean the big takeaways I have when I'm doing these from scratch. When anyone asks this, I'm like first, you want to understand the business's motivations, its goals, its timelines to hit those objectives. And, in the same vein, you want to ask the person being hired what they're looking for, to your point. Are you looking for security? Do you want high earning potential? Do you want to be a hunter? Are you looking to like what is important to them? Because I think to your point, if you can really understand what really does motivate them and what they're looking for, right, you tend to get a better negotiation for both sides, both the business and the person in that role, right?

Speaker 2: 20:33

Some people, again, like you pointed out, they want, nine to five, go home, not think about work, and be with their family. Some folks want the ability to earn as much as they can, as fast as they can, and they're willing to throw 60, 70 hours a week at it until they hit that right, and that changes for everybody, even through life, right? I was reading something else this week on the same thing. Like everybody's, goals, objectives and time horizons are usually different in their 20s and their 30s and their 30s or their 40s, and what's important to you, when and with. If it's important to you and these don't stay the same forever either, right, but I think one of the biggest pitfalls you see are people that get comped to be a hunter and, to your point, they're only managing their accounts. They get a huge commission to do something you could probably pay somebody less for right. And, on the other hand, people that are being paid as operators that are hunting right. You wanna give them more incentive to make them wanna do more of it, right, exactly.

Speaker 1: 21:28

Good stuff, Good questions. Keep sending them our way. We are always happy to answer them. We have. We got anything exciting coming up. Yeah, we have. We have guests on our next. So if you guys listen to our Friday podcast which most of you do those are more full-length educational topics and we've got some some cool guests coming up in the in the coming weeks.

Speaker 2: 21:50

So I heard something and a podcast this week. It made me think of us, our industry and you really, and they were talking about a very successful investor in like Silicon Valley. But they asked him like how, like how he defined success and his analogy was this right, we don't hit home runs in this business. It's about putting the bat on the ball and getting on base. Then you use your rapport building and operations to steal second and third base on the other teams airs sometimes, and then we still home on a pass ball or a missed catch right like another air, and I'm like that sounds exactly like the sales cycle for a freight broker. I'm like you just want to put the bat on the ball to get to know somebody at first to build some rapport.

Speaker 2: 22:34

You maybe get the first with a loader, a quote here, there, and the reality is is someone else is making a mistake? That gets you to second right, just like in baseball, and probably the third base Right. Another broker didn't pick up the load, didn't respond fast enough, so the wrong equipment and whatever that is right. That moves you around, and then some other air helps you steal home to get Into a bid and then you end up blowing the account up because you performed when someone else didn't right, like it's rarely, if ever right, you're hitting a home run, meaning you didn't talk to somebody, and all of a sudden they're sending you a ton of business right away, like I can't think of many instances, if ever, that ever happens, and what we do, and to me as like this, is just a perfect metaphor for sales, for freight brokers, right, it's step-by-step, being diligent and consistent at it, to get where you want to go, absolutely.

Speaker 1: 23:23

That's good man. It's a good analogy.

Speaker 2: 23:25

I'm excited for baseball to get started here Right around the corner any final thoughts whether you believe you can or believe you can't, you're right and until next time, go Bills.

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