Here’s Why Focusing On Customer Experience Is Key – Even For Logistics Carriers

Sep 25, 2018

Did you know a focus on customer experience also benefits supply chain and logistics providers?  

Eye for Transport (eft) and United Post Service (UPS) just released a report Why Customer Experience Management Is The Next Frontier In Supply Chain Logistics and we couldn’t agree more.

The report examines the factors that drive customer satisfaction and loyalty in the Supply Chain Logistics industry according to decision makers of supply chain logistics companies in Europe.

In this article, we’ll share 3 key takeaways from this report by the logistics carriers themselves for consideration:

1. Providing an excellent customer experience is more important than price for logistics carriers

Unsurprisingly, ‘provides a high level of operational quality’ tops the list of characteristics of an ideal Supply Chain Logistics provider.  

We discovered how competitive pricing ranked as a factor compared with other customer experience related factors. According to the study, clear communication, sticking to agreements and agreed on service levels, having knowledgeable and skilled staff ranked alongside operational quality as the top 5 attributes of an ideal Supply Chain Logistics provider.

“This indicates that the relationship between the customer and his supplier is more complex than just providing a good service at a fair price. To earn the loyalty of customers the overall experience needs to be good and there are many factors that contribute to that other than quality and price.”

If you are a web shop this is a very common thinking (or should be anyway) – the value of a cheap delivery service diminishes if orders are not arriving on time or within the agreed timeframe. Merchants might save a bit of money and this may increase your margin, but as we’ve realized,  customers are unlikely to buy again if they are left alone and unsure in the final mile of their shopping experience.

Key takeaway – Carriers should understand the importance of customer service, give realistic and truthful service levels and include these customer experience benefits while pitching to future clients.

2. There is a disconnect between customer’s expectations and what logistics carriers think are important to their customers

The study demonstrates that there’s a key disconnect between what customers find important and what is actually delivered by their main service providers.

Customer experience and soft skills again came into the limelight again – communicating clearly and in a timely fashion, making continuous improvements, learning from mistakes and taking initiative were attributes customers felt were important, but were not delivered adequately by their logistics provider today.

On the other hand, the attributes service providers focus on may not be considered as important by their customers. Being environmentally conscious, a comprehensive service portfolio and consistent operational processes across locations ranked near the bottom in terms of importance for customer satisfaction factors.

The lesson here? Merchants want to be supported throughout their customer relationship. They value your staff guiding and helping them through their issues. They want open communication – customers are more likely to recommend service providers who learn from their mistakes and continuously improve themselves.

Key takeaway – Have an expectation setting before signing the contract. Alongside selling your services, you need to spend the time to understand the merchant’s needs.

3. Quality of customer experience is a key driver of customer loyalty for logistics carriers

It’s clear operational quality and price; while important, are not key predictors of customer loyalty.

The way forward is clear.

Differentiate yourself through the quality of your customer service and how you treat the relationships with your customers. ‘Softer’ areas like innovation, initiative and open communication in the customer relationship are areas that customers value. Focus on these key areas while maintaining operational quality will help you drive customer loyalty and retention.

Key takeaway – Customer experience is not only crucial for merchants to ensure customers come back to their web shop. It’s also instrumental for carriers when onboarding new merchants. In today’s connected world, it’s now simple for prospective customers to look up carrier reviews or depend on word of mouth to determine which carriers to work with., Investing in customer experience will reap its own rewards.

In Conclusion

Its clear customers in the logistics and supply chain are looking beyond price and service quality for them to stay with their current provider.  ‘Soft’ skills like the quality of customer service, how carriers handle the customer relationships with their merchants and their customer onboarding process has now become as (if not more) important, as more traditional factors like operational service quality and price.

To stay competitive, logistics carriers also now need to differentiate themselves by providing a superior customer experience to retain new customers and attract new ones.

For more exclusive reports, insights, and interviews on the latest updates in e-commerce and logistics, follow us on LinkedIn or join our community as a member.

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