5 Techniques to Win Logistics Customers

Any veteran electronic commerce or internet-based marketing guru wIll share the opinion that a fruitful business model would not hinge success on finding new customers and marketing, entirely. After-sales services can develop the relationship and brand loyalty that leads to repeated purchases down the road.  Multiple studies point to the same direction, that attaining purchases from new customers cost five times retaining existing ones.  Nonetheless, new customers must be attracted as well, for the business to thrive. But, what is the key success strategy to keep customers coming back?  Surprisingly, when it comes to brand loyalty, customers are more affected by the logistics experiences than other attributes of the goods and services they acquire.  This is because 55% of customers who experienced poor delivery standards or quality said they would never repeat a purchase with the store again. Thus, to ensure customer expectation is met and the satisfaction echoes brand loyalty, business operators must have an effective logistics strategy

5 maneuvers to invigorate your business strategy:

1. Preparedness is key

Accurate warehouse management together with the selection of reliable suppliers is the first essential step as far as logistics is concerned.  Unless the goods you want to sell are stocked in the warehouse, you are definitely going to experience customer dissatisfaction.   Therefore, your priority must be to decide whether you are going to manage the warehouse yourself or outsource it.

“Great, how am I supposed to know?” The measurement requires a nuance level understanding of demand and supply.  However, to constantly keep track and project inventory for ever changing demand is not an easy task.  As different warehouse management softwares vary in SWOT characteristic and applicability, the operator’s ability to select the one that best enhances warehouse and inventory performance with minimal errors, i.e. the right products are always available on shelves in the right quantities. Passing the buck to customers to make up for empty shelves doesn’t quite work the way it used to.

2.Price and Delivery Transparency

Customer brand loyalty usually starts (or sometimes ends) with trust and confidence in the business. 

Rory Sutherland, Vice Chairman of Ogilvy Group, said that what causes customer dissatisfaction has not been the waiting time but ignorance because ignorance caused a lack of confidence or conviction, which leads to dissatisfaction and, ultimately, reluctance to come back.  On the contrary, what has proved essential is transparency with regards to price and delivery conditions. They invigorate our brand loyalty.  To be transparent, we need to clearly state the difference of each delivery mode, be it time dimensions, charge or conditions involving the returns of the goods.  In other words, we need to provide all information the customer needs to assist in decision-making.  You cannot win the customer’s heart unless you first demonstrate honesty and straightforwardness. In other words, it’s the standard operating procedures isn’t it. Not only do you need to make the procedures and conditions known to customers and open to comments, but to your organization staff and management as well. The organization’s synchronized step-by-step instructions that workers can reference for both routine and complex operations. It’s a living document that once you get the organization and customers on the same page, it could minimize miscommunication and failure to comply with rules and regulations, and therefore synchronize workflow and quality output. In events of internal disputes and confusions, it means the difference in the world when the manager can say: “What does the book say?”

3.Presenting as many options as needed by customers

Large numbers of customers prefer weighing their options online to before deciding what to buy.  What business operators must pay attention to the most is delivering options on the one hand and fast delivery on the other.  For example, the latest research conducted by FEVAD of France reveals that 83% of consumers require door-to-door delivery while 66% think that pick-up delivery is faster.  To be able to offer standard, express or next day delivery mode with varied price range reflecting the respective difference is tantamount to offering customized services whereby the customer can choose the mode and price as befitting his own need.

4.Selecting the best logistics service provider 

This is essential because the customer is not interested in knowing whether the logistics provider and the retailer is the same person or not.  Instead, it’s the experience related to buying the goods that matter, which means that the logistics provider has direct impact on the retailer if delivery expectations are not met, e.g. late delivery, damage of goods and a unknown receiver instead of the customer.  Whatever happens following such a negative experience on the part of the customer will have a direct impact to the brand name.  A bad experience, even one occurrence can wipe out all positive memories the customer has for your business.

For these reasons, the selection of logistics service providers must include a thorough studies in areas such as delivery record, lateness record, insurance, claim and complaint record, customer satisfaction, among others, to ensure that you know exactly who your logistics service providers are and what can be expected.  Sometimes, you might need to personally conduct the study and survey in order to obtain reliable information such as a after sales consumer satisfaction or user experience survey as well as on customers’ top priorities, to name a few.

The same is true with logistics tools and equipment.  The more complicated the work process, the higher the associated costs.  It is essential that various logistics solutions be designed for both customers and the business.  For instance, the integration of e-commerce solutions and transport modules that enables obtaining customer feedbacks in different areas, namely the quality of transport and price, which saves time in comparison to otherwise conducting research surveys in an unsynchronized manner.

5.Return Policy

The company’s return policy can serve as the last the push for the customer’s decision to buy or not buy an item. The decision is made easy for returnable items with reasonable return conditions and a reasonable return period. 

A return policy is the stipulation of conditions associated with the process of a buyer’s returning of a purchased item in order to receive a refund, replacement, or repair. A distinction should be made between two categorically different returns and the associated return periods design for different objectives for different types of products. The first being during a short period immediately thereafter usually a couple days, if not hours, e.g., retuning t-shirt that turns out to be too small. The second being a product warranty that takes effect throughout the entire duration a stipulated period which could be years and decades, e.g., the Prius’s bumper-to-bumper 10-year warranty (with battery coverage).

Different return motives: while illegitimate returns are made by swindlers as part of a dishonest scheme or fraud, in the simplest form, to use the items for free for a couple days before returning it, legitimate buyers, on the other hand, send back purchased items to the seller for reasons such as excess quantity shipped, excess quantity ordered, defective goods, goods shipped too late, product specifications are incorrect or wrong items shipped, but also, for goods that do not meet their expectations in accordance to what they think was promised by the brand and the price charged for it. There is a fine line between legitimately and illegitimately testing the purchased item before deciding whether to keep it or not. Contrary to fictional suspense movies, motive is the most difficulty intangible to prove in court.

The case of the customer being genuinely dissatisfied with the goods after receiving and using them and therefore returning it has an impact on his or her brand loyalty, more so, if the item is not returnable.  Although the scenario is never intentional by the company, it must be managed properly.  The findings showed that 89% of the customers said they would return as customers if they had a positive experience concerning the return of unsatisfactory items.  Therefore, not only is it in the company’s  best interest to render a positive experience to customers through the security from being able to do something about unsatisfactory goods after purchase, it is a duty as well.  The process actually begins before the purchase.  If the the return policy is stated with all conditions clearly outlined, i.e., transparent, involves a simple process and is flexible and facilitating, any first-time customer will be satisfied.

Thus, for you to successfully retain existing customers as well as acquire new ones for the company, priority must be given to the entire process, upstream to downstream, or good supply chain management, which will enable sufficient time to fulfill customers’ needs.  The company’s ability to effectively respond to customer needs ensures their satisfaction which, in turn, leads to brand loyalty, be it in the form of repeated purchases or word-of-mouth advertising.

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Compiled by BLOG.SCGLogistics

Reference and picture credits: blog.nosto.com, nanosoft.co.th

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