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Customer-Focused Logistics: Why Shippers Shift from Process to Experience

Customer-Focused Logistics

Across the global economy, consumers are wanting more. In fact, it is not just a desire for more; it a demand. Consumer actions are shaping how shippers and carriers interact, ranging from contract negotiation to exploring new technologies. With the rise of Amazon, consumers have also been able to access an endless product array at historic, record-low shipping costs. In response, more shippers have ditched their practices of working with carriers directly for third-party logistics provider (3PL) partnerships. However, the continued increasing demands of consumers are driving a shift away from process improvement to customer-focused logistics, and you need to understand how this will impact your operation.

Statistics Indicate Industry-Wide Need for Better Customer Experience Is Growing.

More retailers have taken notice of increased customer service expectations from consumers. According to a recent study, reports Material Handling and Logistics, only 3 percent of respondents believe their existing technology supports an improved customer-focused logistics experience. In addition, 67 percent are actively pursuing ways to increase customer service throughout the order fulfillment process, and 56 percent are considering customer service in all decision-making processes. Furthermore, half of respondents cite need to decrease operational costs and improve profit margins as key to enhancing customer service. Unfortunately, these goals can conflict with goals of better customer service, like decreasing costs for consumers. As a result, more companies must understand what customers truly want.

What Do Customers Really Want?

Name a few things that customers want.

  • Free shipping.
  • Better cost than your competitors.
  • Immediate visibility into a shipment’s status.
  • Immediate shipping.
  • Next-day, if not same-day, delivery.

These five points build upon a basic concept in every industry; customers want more bang for their buck. Furthermore, customers want a seamless experience that stretches across all possible buying channels, and returns must be accomplished just as easily, asserts Multichannel Merchant. In this capacity, 3PLs have worked to improve a company’s expenses for logistics, but the renewed focus on customer service means the role of the 3PL must extend beyond traditional goals, building business strategy.

What Can Shippers Do to Improve Customer Experience?

There is no real way to give customers what they want by simplifying processes. In fact, the only way to bring costs down beyond traditional capabilities lies in devising a strategy-based approach to customer service. 3PLs are being used to gain additional, actionable insights into everyday operations and all processes that go into every sale.

For example, 3PLs can be used to gain increased access and affordability among different modes of shipping, and these same companies have the potential to eradicate billing inconsistencies, improve overall accounting, eliminate compliance violations and ensure the company is accurately tracking and acting upon information that could result in poor customer service. In other words, companies must combine both human and technology to create a satisfying experience for customers. Additionally, companies can enhance customer service and leverage to improve profit margins and decrease overhead, traditional goals of 3PLs, while still gaining a strategic advantage in the market. Some of the top ways to create customer-focused logistics include the following:

  • Consumers need to remember your company immediately. A good customer service experience might be put on social media. A BAD EXPERIENCE WILL GO VIRAL. This simple adage reflects how customers see your organization. Every interaction should be positive and encourage future purchases. Customers should want to brag about how well your company handled their order, not just their problems. Be present, and make your company extremely transparent to your customers.
  • Alight shipping strategy with retail strategy. When retail and shipping strategy focuses on increasing customer service, costs associated with each transaction decrease. This is due to increased visibility and coordination of all inbound and outbound logistics operations that feed into retailers’ needs. As a result, both logistics providers and retailers should have a 360° view of all steps in a product cycle. This will eliminate confusion and ensure customers’ expectations are met.
  • A proactive supply chain anticipates issues, preventing problems for customers. An effective customer-focused logistics strategy must anticipate possible issues, not just address the ones that develop. This is only possible by ensuring a company has a “wide net to cast” for all parties. In a sense, this is the omnichannel sales experience, combining e-commerce with all other channels’ logistics, and proactive supply chains understand that keeping all processes internal may not be the most cost-effective. In addition, internal departments tend to overreport their success. So, third-party companies can provide better benchmarking, analysis and reporting of actions in your company.
  • Fixing issues is not enough. Shippers need a strategy for customer service. Shippers must also devise strategies that use algorithms and data-based information to give customers more than they would normally get. However, these bonuses must not result in increased costs. Think about it; you cannot give customers everything they want. But, you can give them more than what they need. This is key to achieving a superior customer service experience.

Process Improvement Is Great, But Customer-Focused Logistics Strategy Begets Enterprise-Wide Benefits.

There are many changes occurring within the shipping and logistics industry. As the world has grown more connected, the demands of consumers have come to the forefront. Companies must work to create customer-service strategies while still maintaining the financial goals of the past. When companies focus on the end-result, happy customers, the benefits of process improvement, greater profitability and growth will come naturally. So, why haven’t you started working to build a win-win experience for your business and your customers by working with a 3PL?

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Adam Robinson
Adam Robinson oversees the overall marketing strategy for Cerasis including website development, social media and content marketing, trade show marketing, email campaigns, and webinar marketing. Mr. Robinson works with the business development department to create messaging that attracts the right decision makers, gaining inbound leads and increasing brand awareness all while shortening sales cycles, the time it takes to gain sales appointments and set proper sales and execution expectations.
Adam Robinson
Adam Robinson
  • Hugh Sutherland

    A great post Adam. By all accounts it appears that the last phase in supply chain logistics is to deliver goods by tracking customer purchasing history at the point of consumption and maintain their household inventory at optimum levels so they don’t even have to think about what they need to order! Of course this is closer than we imagine as Omni-channel marketing is now well advanced.
    All these developments tend to indicate a consequence of a massive over-supply driving competition. Razor-thin margins are forcing this trend and it won’t be long before competition is eradicated altogether where winner-take-all leaves the last man standing to own the market. Of course the only ones who will bear the consequence of this science-fict development will be the consumers as they will loose their freedom of choice and conform with what bots decide is best for them in order to enrich the Omni-supplier!

    • Jin ZhiYan

      consumers losing the freedom of choice. Very true – as I make my decisions on purchasing and selling each day this is something I am keenly aware of – which begets the question – do i take advantage of new developments of not?

      • Hugh Sutherland

        Absolutely! Only if you can get more value in doing so. What I mean when I say “Value”, I am referring to “what you get for what you pay”. By this I mean if some store or supplier is prepared to deliver what you are buying for free, then why have the inconvenience an added cost of going to fetch it? It’s the “added value” that you get for what you spend that counts. However you need to understand that quality also comes into the equation. Very often a No-Name brand will try to attract sales by sacrificing quality to market “convenience” i.e. Time-and-Place convenience.

        • Jin ZhiYan

          Another point I was thinking about is: Do I really want to jump onto the bandwagon of the current best player, or should I occasionally go to the other players, to keep it a competitive market?

          I don’t want to build a monopoly and lose out on long-term benefits. Highly unlikely, but a game theory game.

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