The 5 fulfillment questions you should be asking yourself
June 16th, 2008 by LuanaSo, you’ve made the phone ring, your call center has done a bang up job closing your calls and you’ve been able to decrease your cancel/decline rate – you’re golden, right, sales complete? Wrong – you’ve made the phone ring and processed the sales but how efficiently is your product getting to your customer? This is a metric many people are guilty of over looking. Can YOU answer the following questions?
1. What is your average cost to ship your product
2. Are you using the best shipping carrier mix (UPS, USPS, FedEx, drop ship, etc.) to get the lowest average ship cost for your campaign?
3. What is your average package refusal rate?
4. What is your average incorrect address rate?
5. What is your average package in transit time?
If you are unable to answer these questions you need to contact your fulfillment provider (or your friends at KPI) for assistance in getting these answers. The fulfillment metrics above should be measured and managed to (i.e. fulfillment scorecard) as they have a direct impact on the profitability of your campaign.
But why else are these specific metrics important?
First and foremost, as with other campaign metrics, if you are actively managing the numbers you are able to quickly spot a potential issue before it becomes a major problem (wouldn’t you like to know all of your packages are getting delayed BEFORE your customer service team gets slammed). This applies not only to fulfillment but in other aspects of your business as well. It also provides you with another way to “wring out the towel”.
When evaluating shipping methods you should consider: what zones do you ship to most, what is your goal in transit time (what is communicated to customers), weight of your product and various marketing/branding considerations. You may decide to go with multiple carriers to optimize your savings. There is no “right” shipping carrier cost. You should evaluate your industry average and manage to what your specific campaign breakeven allows for.
Your refusal and incorrect address rates can be important indicators of whether your sales force is really getting the job done. Are they able to get accurate information from customers? Are they closing the sale based on the merits of your product or are they using pushy sales tactics? If a customer feels they are being pushed into a sale or are not given adequate information they may be more likely to refuse a package without trying it. You should decide on an acceptable level for these metrics and manage to it. If the rates go beyond, you should consider first if there is an issue with your shipping method and/or carrier. If not, your next course of action is to evaluate your call centers sales tactics, agent product knowledge, and scripting. You may need to “beef up” sections in your script to help your agents communicate the benefits of your product to your customer.
You should also evaluate your average in transit time for your product. Outline a timeline and manage to it. Your customer service agents and sales agents should know and effectively communicate the timeline to your customers. If you’re telling customers they will receive their package in 3 -5 days and they receive it in 10 – 13 days you’re asking for problems. Complaints will come into the customer service department (raising CS costs) but you may also see an increase in chargebacks, Better Business Bureau and Attorney General letters (raising merchant costs and red flags).
When deciding on acceptable fulfillment metrics for your company remember there is no one size fits all. Work with your fulfillment provider when developing your scorecard and hold them accountable for the agreed upon goals. Once this has been implemented you should reevaluate your metrics on a regular basis. Are you achieving your metrics and/or do they need to be tweaked?
