Whether you’re a B2B or B2C company, delivery is becoming a competitive differentiator and a key driver of customer experience. Even if everything goes perfectly during the sales process, a delivery problem (late, missed, damaged, etc.) can significantly degrade the customer experience, leading to future lost sales. We recently explored this issue with members of our Indago supply chain research community who are all supply chain and logistics executives from manufacturing, retail, and distribution companies. Surprisingly, 45% of member respondents said they don’t engage electronically with their customers about deliveries.
How well do you engage with customers about their delivery experiences, and how do you compare with our survey respondents? Those are some of the questions I discussed with Gary Rosier-Taylor, Director, Sales at Descartes Systems Group, on a recent episode of Talking Logistics.
The Importance of Customer Engagement
While most companies will tell you that their customers are very important to them, many don’t have a solid handle on customer delivery satisfaction. I asked Gary why this kind of customer engagement is important.
Gary comments that customer engagement covers a wide range of interactions, but for our discussion he focuses on last mile delivery, or what he calls the critical mile. He notes that due to interactions with food delivery companies and other services, people have come to expect a certain level of transparency and engagement around their deliveries.
“Companies that engage with customers electronically see increased retention, reduced call center contacts, and reduced disputes, claims, and failed deliveries, all the things that happen on a day-to-day basis,” Gary says. “This makes customer engagement such a big part of operational effectiveness, as well as revenue performance.”
Most companies now offer customers some kind of ETA on their order deliveries, but in our survey, 85% provide ETAs based only on standard lead times, which are often very broad time windows and don’t account for all the things that can go wrong with a typical delivery. I asked Gary if there should be something more.
Gary explains that saying the delivery will arrive in 3-5 days is not nearly as helpful as saying it will arrive Thursday between 12-4 pm. And being able to provide more specific, updated information on the day of arrival is even more helpful. But he notes that in the survey, only 5% of the respondents are using dynamic delivery windows based on real-time data. “There is a massive opportunity for improvement in this area that can be done relatively quickly and easily,” Gary says.
Providing customers with self-service capabilities to manage their deliveries is another important part of engagement, as Gary explains in the short clip below:
Only 40% of the survey respondents, however, allow customers to “View delivery details in customer portal” — and even fewer provide customers with self-service capabilities such as the ability to reschedule deliveries, provide location-specific delivery instructions, confirm deliveries, cancel deliveries, or contact delivery drivers en route. ”
I asked Gary why more companies don’t offer these self-service capabilities. He says that it comes down to technology. Most companies don’t have the time or expertise in-house to add these capabilities to their offerings. So, acquiring this from software vendors experienced in this area is the best approach.
Beyond what we discussed above, I asked Gary what surprised him most about the survey results. Gary states that one big surprise is that 55% of the respondents don’t send post-delivery surveys. “This is a huge missed opportunity to understand your service performance. It helps you get ahead of bad experiences before it impacts retention or reorder rates. Even if you have very high shipment numbers, automating the survey process makes it easy to gather this important information.”
Perhaps one of the biggest surprises for Gary was when one respondent said they don’t survey their customers because they don’t directly handle the delivery themselves. “How customers interact with your brand, who you choose to partner with, completely impacts your retention numbers. Customers don’t hold the third party logistics company accountable; they hold you accountable for any missteps.”
In other words, while a manufacturer or retailer might outsource the delivery operation to a third party, they don’t outsource the responsibility for ensuring a delivery goes well. The buck ultimately stops with the brand owner.
How can companies improve their customer engagement? How can technology help? Gary shared some great insights and advice on those questions and more, so I encourage you to watch the full episode for all the details, as well as download and read the Indago report. Then keep the conversation going by sharing your perspective and experience on this topic!