We talk a lot about omni-channel in this industry and often we focus on the front-end experiences our customers have since these are the most visual and tactile for us. In-store, online, mobile, pop-up shops, all are front of mind when thinking about creating great customer experiences and improving our customer retention (i.e. – lifetime value).
What About Using Shipping For Customer RetentionWhat about the back-end of every order? What about shipping? How can retailers shift their thinking about shipping away from shipping as something that costs them money and headaches and into something that helps them grow their business through dramatically improved retention?
Think about it this way. If a retailer screws the fulfillment piece up, all the money and effort that went into acquiring a customer is at risk. You really don’t want the last experience a customer has with you to be a bad one.
Here’s the rub though…
Shipping can be a VERY frustrating part of any eCommerce business.
There are so many things that contribute to this frustration but the three I see the most are:
- Lack of visibility and control
What makes things more complex or less complex? I like to start with the type of fulfillment operation you are going to run. There are really only 3 options here:
- 100% Owned Warehouse / Fulfillment
- 100% 3PL (outsourced fulfillment)
Each of the above has its pros and cons and each of the above when combined with other variables can be more or less complex. We’ll get into what these other variables are below, but for now I want you to think about which of these big buckets your fulfillment operation fits into.
Got it? Good.
After we figure out the classification of fulfillment operation, we need to look at the other key variables that would add to complexity. While this is no means a complete list, these are what I’ve seen the most of in the last 15 years.
- Broad range of weights and sizes
- Large geography being served (where you ship to)
- Multiple origin shipping locations
- Large catalog of products
- Sales volume fluctuations
- Multiple shipping carriers that you rate-shop for best price
- Some products are stocked and some are drop-shipped or JIT (just in time)
- Perishable goods
- Products that require insurance
- Products that require additional paperwork (legal, government etc…)
- Products that have to arrive on specific dates
If complexity, cost, and lack of visibility/control are what causes the most frustration, then reducing the # of variables that increases any of these 3 areas of pain is the easiest way to improve things.
If you have no choice but to run a complex logistics operation, then you need to move on to other levers that you can pull to create the best possible customer experience. These are:
- Better Tools / Technology
- Better Processes & Systems
- Right People / Right Seat
With these 3 levers what you’re trying to accomplish is improved efficiency and effectiveness.
For example, if you have a high degree of complexity in your logistics operation then you might want to look at technology like ShipStation to help you build rules to handle some of the complexity in things like which carriers to use for which products, when to add insurance, which work-flow to follow and so on.
Or perhaps you need some better processes that your team (people) follow to improve consistency and quality?
I like to re-visit my logistics once or twice a year depending on how fast a business is growing. What works now may not work in the future so it is worth evaluating this critical part of your business as often as makes sense.