Recipe for Retention: Drivers Recommending Carriers

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This blog was prepared by Bradley R. Fulton, Director of Research and Analytics, and Allyson Smith, Data Analyst, at Stay Metrics

Driver Reccommending Carriers as a Reflection Their Culture

Whether or not a client, customer, or other stakeholder is willing to recommend a company has long been a key metric in many industries. Many see this as a leading indicator of other important metrics that will ultimately lead to a company’s success or failure. This is certainly true in transportation, especially regarding drivers. Positive driver recommendations of carriers could have a substantial impact on one’s ability to maintain a steady stream of incoming drivers. Moreover, drivers who are more likely to recommend a carrier are also less likely to leave that carrier; this was confirmed by recent research conducted by Stay Metrics in the Top 5 Areas to Watch for New-to-You Drivers report. Thus, willingness to recommend a carrier is a leading indicator of both the flow of incoming drivers and turnover.

Ultimately, lower turnover means less need for a steady stream of incoming drivers. Thus, turnover is clearly the more important consideration. However, while turnover is ultimately the metric of interest, and the one we most wish to impact, it is also a lagging indicator. This means that, while it may be easy to track, it is difficult to directly impact.

Likelihood of drivers recommending a carrier, on the other hand, is more difficult to track—requiring a survey—but relatively easier to impact. This is because a drivers’ likelihood of recommending their carrier reflects the culture of that carrier. Thus, it is the overall culture of their company that carriers need to best understand.

Measures to Help Understand Carrier Culture

Understanding carrier culture requires surveys that validly and reliably measure various aspects of that culture, and analytics that help clients understand their relationship to leading indicators such as a driver’s likelihood to recommend a carrier. Another important leading indicator is commitment. It too has been shown to have a strong relationship to turnover, while at the same time reflecting a carrier’s culture.

Together, drivers’ likelihood of recommending the carrier, and their commitment to that carrier, can be used to understand how one can improve that culture. As they are highly reflective of a carrier’s culture, they are also highly sensitive to attempts to change that culture. Far more sensitive than turnover.

Thus, to impact one’s culture one must understand drivers’ perceptions of the underlying issues, and work to introduce quality improvement programs to improve those perceptions. The success of these initiatives can best be understood by examining changes to the leading indicators: drivers’ likelihood of recommending the carrier, and their commitment to that carrier. Over time, this will impact turnover, but it does take time. Turnover can be slow to move (thus the term lagging), and only concerted and continual efforts to change one’s culture will eventually move the needle.

Analytics to Help Understand Carrier Culture

To help identify which issues carriers should focus on, Stay Metrics has developed a statistic called the Referral Index. This is a powerful yet easy to understand statistic for identifying issues that should be considered a high priority in efforts to improve the quality of the driver experience and reduce turnover. Briefly, the Referral Index is based on two metrics: the item mean scores and all items’ correlations with the question that indicates drivers’ likelihood to recommend their carriers. The items with the highest Referrel Index scores will have the lowest mean scores and the highest correlations. In other words, these are items in which there is much room for improvement and that are highly predictive of likelihood to refer. These items should be considered as high priorities for quality improvement purposes. Stay Metrics has also developed a parallel measure called the Stay Index which uses item correlations with the commitment score. More information about this metric can be found in the following publication: Stay Index Report: Top 20 Opportunities for Carriers.

While items could be correlated with actual turnover, we have found the likelihood to recommend and commitment to be superior. Firstly, the data for likelihood to recommend and commitment is provided by the driver at the same time as the individual items’ ratings. Actual turnover may occur several days, weeks, or longer from the time the survey was completed. Thus, their thinking may have changed, and their survey data will not be as accurate in predicting actual turnover. Secondly, many things outside the carrier’s control can impact actual turnover (e.g., downturn in the economy, the impact of other carriers, health of the driver). This is, in part, why the likelihood to refer and commitment are far more reflective of the carrier culture and more sensitive to attempts to positively impact that culture.

Concluding remarks

Turnover is a critical metric in transportation, and one that should be tracked carefully. However, focusing merely on turnover is not enough. Other metrics like drivers’ likelihood to recommend the carrier, and drivers’ commitment to the carrier, are far more reflective of a carrier’s culture and far more sensitive to attempts to change that culture. These are the leading indicators that will over time impact the lagging indicator (turnover). In other words, understanding these metrics in attempts to create a more driver-centered culture is the most effective way to create a sustained reduction in turnover.