In the world of eCommerce, it is not uncommon for businesses to brush off customer delivery concerns, tossing the responsibility onto delivery carriers. But here’s a reality check: one subpar customer delivery experience can wreak havoc on your brand’s reputation. If you have a “ship and forget” mindset, it is time for you to realize that a bad delivery experience is disastrous for your business and it is time to change your perspective. So to help you change, I’ll highlight for you the three most significant costs your business can face due to a lousy customer delivery experience.
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”Warren Buffett
1. Poor Customer Retention Due To A Bad Customer Delivery Experience.
As most businesses rely on repeat customers, even one negative delivery experience can result in losing a loyal customer. For example, surveys show that 84% of customers will not return to a retailer after one poor delivery experience. So as a result you end up with less than a delighted customer.
The reasons that you can lose customers due to a bad delivery experience are many. First and foremost, they become frustrated due to their orders being delayed after the promise date. Second, the carrier loses their shipment or worst, your warehouse never shipped the order. Another reason for customer dissatisfaction is poor communication between you and the customer. In this case, customers do not feel that your customer service is not addressing their concerns in a timely manner. See SC Tech Insights’ Is Your Customer Delivery Experience In A Tailspin? for more on improving customer delivery experience.
“The key is to set realistic customer expectations, and then not to just meet them, but to exceed them—preferably in unexpected and helpful ways.”Richard Branson
2. Increased Costs, Reduced Operational Efficiency.
First if orders are delayed, then it may take longer to fulfill them. As a result, this leads to an increase in labor costs. Second, if a customer’s order is lost or damaged, then it can lead to increased costs associated with replacements or refunds. Additionally, your customer service labor increases as customers call in “where is my order?”.
Also, there can be increased shipping costs with a bad dilevery experience. For instances no matter your policies on refunds or order cancellations, a delivery exception is going to cost you. Specifically as a minimum, you can incur additional shipping charges such as address correction charges or paying for the shipment’s return charges. Another shipping cost is the cost of damaged goods and refused shipments.
3. Negative Reputation, Loss Sales Due To Even One Bad Delivery Experience.
The worst impact to even one bad delivery experience in the impact to your business’ reputation. For example, customers may leave negative reviews or spread negative word-of-mouth, which can damage your reputation. Additionally, even your current customers may be less likely to shop with you in the future if they have had a negative experience. Accordingly, this can lead to a loss of customers, and ultimately a decrease in profits.
Negative reviews by customers spread like wildfire across the internet. Specifically, the majority of your potential customers and prospects will check reviews online before purchasing a product. Subsequently,if one of your customers posts a negative review about a bad delivery experience, potential customers may read the review. As a result, these bad reviews lead to a decrease in overall customer satisfaction and trust. The bottom line is that your customer’s bad delivery experience reflects on your company.
“The purpose of a business is to create a customer who creates customers.”Shiv Singh
See FarEye’s Bad Delivery Experiences for more information on the costs of a bad delivery experience.
See Supply Chain Tech Insights for more articles on transportation.
Greetings! As an independent supply chain tech expert with 30+ years of hands-on experience, I take great pleasure in providing actionable insights to logistics leaders. My background includes implementing 100s of innovative solutions using emerging technologies and a data-centric development approach. I have also provided business intelligence (BI) solutions for 1,000s of shippers. For more about me, click here.