Professional basketball players, coaches and owners may be among the country’s wealthiest individuals. But they could have been a whopping $11.5 million richer.
That’s the total amount of fines imposed on them by the NBA between 2003 and 2013 for various verbal infractions.
Although logistics isn’t a sport, this statistic offers a helpful caveat for any company looking to trim costs: No matter what anyone says, talk is not always cheap. In fact, sometimes it can be downright expensive.
As evidence, consider the following nine statements. Each represents a fairly common and seemingly harmless mindset about customer service, transportation or home delivery. But in reality, each is a misconception that — if corrected — could mean significant savings or efficiencies for your business.
“Pre-delivery calls, texts and e-mails are over-rated.
Besides, we don’t want to pester our customers.”
Most of us are inundated with more messages than we can respond to in an average day. Nevertheless, considering how highly connected today’s consumers are, there’s no excuse for keeping them in the dark about where their purchases are or when they’ll arrive — especially if they’ve purchased a large or high-value item that requires them to be present to receive it.
The more proactive your company can be in terms of customer communications (for example, adding a reminder call, text or e-mail on the morning of delivery and reaching out when the carrier is 30 to 60 minutes away from the customer’s home) the less likely your carriers are to encounter not-at-homes – and the costly redelivery expenses that will follow.
“Each of our stores does a great job
of handling its own last-mile shipments.”
There are many recipes for inefficiency. One of the most prevalent is to take an “every operation for itself” approach to coordinating customer deliveries.
While a store manager may enjoy being able to book his or her own shipping and may be very proficient at it, this kind of silo approach is only a sub-optimized solution at best.
By simultaneously optimizing deliveries from multiple stores and DCs, your company can do a better job of everything from inventory deployment and load building to route optimization, carrier negotiation and process improvement. The result will be significant savings and economies of scale.
“We’ve had a fixed-cost arrangement for years, and
it seems to work well for everyone.”
From a budget planning perspective, few things can match the predictability of a fixed-cost transportation arrangement.
But if your company works in a volatile industry, such an arrangement could wind up being the equivalent of buying air, because during times of low demand you could wind up funding a considerable amount of idle equipment and personnel.
As an alternative, consider seeing if your carriers will offer a variable pricing structure that ties to your sales volumes. If not, consider switching to a carrier that will. Depending on your company’s size, this could equate to hundreds of thousands of dollars in annual savings – or more.
“We always ship with the cheapest carrier, so it’s all good.”
It’s always wise to compare rates when choosing carriers, especially considering how widely these rates can vary. But consistently selecting carriers based on price alone is no guarantee of flow-through to the bottom line. That’s because bargain-basement rates can quickly add up to bigger expenses if they go hand-in-hand with poor quality, high damages or sub-par customer service.
Before deciding whether or not a carrier deserves your business, pay careful attention to every element of its value proposition, not just the initial sticker price. You’ll often discover that the most economical choice on the surface isn’t necessarily the cheapest one in the end.
“It’s an out-of-the-way location.
But it was too good of a deal to pass up.”
In recent years, it’s become more common for communities to want distribution or fulfillment business so badly that they’re willing to offer companies significant tax breaks or other financial incentives to get it. However if a location or venue is too far off the beaten path for purposes of reaching your customers, it’s also probably too good to be true, because any real estate savings your company might enjoy are likely to be negated by higher shipping costs.
Even at this time of moderate fuel costs, transportation costs still outweigh warehousing costs several times over, so always let the former drive your DC and cross-dock site selection decisions.
“It’s just a little dirt.”
Due to the rigors associated with transportation and handling, customers really shouldn’t be surprised if a product’s exterior packaging looks a little less than perfect by the time it reaches their doorstep. But many consumers have sent products back for less.
Although your company can’t avoid every return, you can significantly diminish the ones that occur for superficial reasons (such as the perception that customers have received an old or used item) by giving your products and their exterior packaging every opportunity to shine before they go out the door for final delivery.
For example, if the box or crate surrounding an otherwise perfect product looks like it’s been through the wringer, take the time to change it out. If an item has gathered dust, wipe it down. And if a product has minor but repairable cosmetic damage, bring in a professional with the know-how to mend it well.
You won’t regret the extra effort, because the reverse logistics processes that are associated with returns typically cost considerably more than other supply chain functions.
“When it comes to home delivery, value-added services
really aren’t our thing.”
There’s a lot to be said for maintaining a sharp service focus and knowing what you’re good at. However there’s also a lot to be said for being realistic: If your company sells any kind of electronic device, appliance, computer or item with multiple pieces, there’s a strong possibility some of these items could wind up being too complex for certain buyers to assemble or install without help.
Bear in mind that one of the most common reasons for returning a product is, “I couldn’t get it to work.” That’s why in many cases it can make fiscal sense to offer product set-up and installation as a value-added delivery service option, provided this is permissible by state law.
Along these same lines, it often pays to have delivery service professionals walk customers through a brief product familiarization at the time of delivery instead of putting the onus on the customer to call for assistance later. Even five or ten minutes of face-to-face, on-site instruction can go a long way toward making customers feel more comfortable with using their purchases.
The net result will be fewer returns, lower customer service costs and – quite possibly – a higher amount of repeat business.
“There’s no substitute for a live customer satisfaction survey.”
Whoever said what you don’t know can’t hurt you was obviously never in the delivery business. Customer surveys are an excellent way for the left hand – your company – to learn what the right hand – a professional delivering on your behalf – is doing during the moments of an interaction that would otherwise be invisible. And such clarity is essential considering that all it takes to lose some customers’ future business is one or two negative experiences.
But that doesn’t mean that administering these surveys has to dramatically increase your company’s headcount. When our company tested the efficacy of live versus automated surveys many years ago, we discovered that automated surveys were not only less expensive, they garnered a higher rate of response. Who says that better results have to cost more?
“Business-as-usual is best for us,
because we’ve been doing parcel deliveries for a long time.
We already have delivery efficiency down to an art.”
Being a tenured name in e-commerce or last mile can be a distinct competitive advantage. After all, there is much to commend already having time-tested processes, partnerships and protocols in place – and being ahead of the steep learning curve that many other companies are just starting to scale.
At the same time, it’s important to note that when it comes to the omnichannel, we’re now playing in a much larger and more competitive arena and that the rules may have changed.
The demand for last-mile deliveries is growing significantly. At the same time, the transportation industry is facing a critical truck driver shortage and increasing capacity constraints. For the shipper, this means that brand protection and customer satisfaction is at stake.
Meanwhile, today’s consumers clearly expect better combinations of speed, promptness and accuracy – without appearing to be willing to pay for them. (Case in point: The number one reason for online shopping cart abandonment is high shipping and handling costs.)
Should these trends continue, there’s every chance that the average cost per delivery could rise. As a result, unless your company wants to pass 100% of these increases on to customers and risk losing sales you will have to start looking for new and different ways to take costs out of your supply chain.
Will all of the aforementioned things deliver all of the cost-cutting horsepower you need?
Only time and your particular supply chain can say for sure. But it’s safe to say they’re a step in the right direction.
Will O’Shea is Chief Sales & Marketing Officer, XPO Last Mile. XPO Last Mile is part of XPO Logistics, one of the fastest-growing providers of logistics services in North America. The company is the largest provider of last-mile logistics through its XPO Last Mile business. Other XPO divisions provide freight brokerage, intermodal, expedited transportation, technology-enabled contract logistics, global freight forwarding and managed transportation services. The company uses its relationships with ground, rail, sea and air carriers to serve over 14,000 customers in the manufacturing, industrial, retail, commercial, life sciences and government sectors. For more information visit www.xpo.com.
That’s the total amount of fines imposed on them by the NBA between 2003 and 2013 for various verbal infractions.
Although logistics isn’t a sport, this statistic offers a helpful caveat for any company looking to trim costs: No matter what anyone says, talk is not always cheap. In fact, sometimes it can be downright expensive.
As evidence, consider the following nine statements. Each represents a fairly common and seemingly harmless mindset about customer service, transportation or home delivery. But in reality, each is a misconception that — if corrected — could mean significant savings or efficiencies for your business.
“Pre-delivery calls, texts and e-mails are over-rated.
Besides, we don’t want to pester our customers.”
Most of us are inundated with more messages than we can respond to in an average day. Nevertheless, considering how highly connected today’s consumers are, there’s no excuse for keeping them in the dark about where their purchases are or when they’ll arrive — especially if they’ve purchased a large or high-value item that requires them to be present to receive it.
The more proactive your company can be in terms of customer communications (for example, adding a reminder call, text or e-mail on the morning of delivery and reaching out when the carrier is 30 to 60 minutes away from the customer’s home) the less likely your carriers are to encounter not-at-homes – and the costly redelivery expenses that will follow.
“Each of our stores does a great job
of handling its own last-mile shipments.”
There are many recipes for inefficiency. One of the most prevalent is to take an “every operation for itself” approach to coordinating customer deliveries.
While a store manager may enjoy being able to book his or her own shipping and may be very proficient at it, this kind of silo approach is only a sub-optimized solution at best.
By simultaneously optimizing deliveries from multiple stores and DCs, your company can do a better job of everything from inventory deployment and load building to route optimization, carrier negotiation and process improvement. The result will be significant savings and economies of scale.
“We’ve had a fixed-cost arrangement for years, and
it seems to work well for everyone.”
From a budget planning perspective, few things can match the predictability of a fixed-cost transportation arrangement.
But if your company works in a volatile industry, such an arrangement could wind up being the equivalent of buying air, because during times of low demand you could wind up funding a considerable amount of idle equipment and personnel.
As an alternative, consider seeing if your carriers will offer a variable pricing structure that ties to your sales volumes. If not, consider switching to a carrier that will. Depending on your company’s size, this could equate to hundreds of thousands of dollars in annual savings – or more.
“We always ship with the cheapest carrier, so it’s all good.”
It’s always wise to compare rates when choosing carriers, especially considering how widely these rates can vary. But consistently selecting carriers based on price alone is no guarantee of flow-through to the bottom line. That’s because bargain-basement rates can quickly add up to bigger expenses if they go hand-in-hand with poor quality, high damages or sub-par customer service.
Before deciding whether or not a carrier deserves your business, pay careful attention to every element of its value proposition, not just the initial sticker price. You’ll often discover that the most economical choice on the surface isn’t necessarily the cheapest one in the end.
“It’s an out-of-the-way location.
But it was too good of a deal to pass up.”
In recent years, it’s become more common for communities to want distribution or fulfillment business so badly that they’re willing to offer companies significant tax breaks or other financial incentives to get it. However if a location or venue is too far off the beaten path for purposes of reaching your customers, it’s also probably too good to be true, because any real estate savings your company might enjoy are likely to be negated by higher shipping costs.
Even at this time of moderate fuel costs, transportation costs still outweigh warehousing costs several times over, so always let the former drive your DC and cross-dock site selection decisions.
“It’s just a little dirt.”
Due to the rigors associated with transportation and handling, customers really shouldn’t be surprised if a product’s exterior packaging looks a little less than perfect by the time it reaches their doorstep. But many consumers have sent products back for less.
Although your company can’t avoid every return, you can significantly diminish the ones that occur for superficial reasons (such as the perception that customers have received an old or used item) by giving your products and their exterior packaging every opportunity to shine before they go out the door for final delivery.
For example, if the box or crate surrounding an otherwise perfect product looks like it’s been through the wringer, take the time to change it out. If an item has gathered dust, wipe it down. And if a product has minor but repairable cosmetic damage, bring in a professional with the know-how to mend it well.
You won’t regret the extra effort, because the reverse logistics processes that are associated with returns typically cost considerably more than other supply chain functions.
“When it comes to home delivery, value-added services
really aren’t our thing.”
There’s a lot to be said for maintaining a sharp service focus and knowing what you’re good at. However there’s also a lot to be said for being realistic: If your company sells any kind of electronic device, appliance, computer or item with multiple pieces, there’s a strong possibility some of these items could wind up being too complex for certain buyers to assemble or install without help.
Bear in mind that one of the most common reasons for returning a product is, “I couldn’t get it to work.” That’s why in many cases it can make fiscal sense to offer product set-up and installation as a value-added delivery service option, provided this is permissible by state law.
Along these same lines, it often pays to have delivery service professionals walk customers through a brief product familiarization at the time of delivery instead of putting the onus on the customer to call for assistance later. Even five or ten minutes of face-to-face, on-site instruction can go a long way toward making customers feel more comfortable with using their purchases.
The net result will be fewer returns, lower customer service costs and – quite possibly – a higher amount of repeat business.
“There’s no substitute for a live customer satisfaction survey.”
Whoever said what you don’t know can’t hurt you was obviously never in the delivery business. Customer surveys are an excellent way for the left hand – your company – to learn what the right hand – a professional delivering on your behalf – is doing during the moments of an interaction that would otherwise be invisible. And such clarity is essential considering that all it takes to lose some customers’ future business is one or two negative experiences.
But that doesn’t mean that administering these surveys has to dramatically increase your company’s headcount. When our company tested the efficacy of live versus automated surveys many years ago, we discovered that automated surveys were not only less expensive, they garnered a higher rate of response. Who says that better results have to cost more?
“Business-as-usual is best for us,
because we’ve been doing parcel deliveries for a long time.
We already have delivery efficiency down to an art.”
Being a tenured name in e-commerce or last mile can be a distinct competitive advantage. After all, there is much to commend already having time-tested processes, partnerships and protocols in place – and being ahead of the steep learning curve that many other companies are just starting to scale.
At the same time, it’s important to note that when it comes to the omnichannel, we’re now playing in a much larger and more competitive arena and that the rules may have changed.
The demand for last-mile deliveries is growing significantly. At the same time, the transportation industry is facing a critical truck driver shortage and increasing capacity constraints. For the shipper, this means that brand protection and customer satisfaction is at stake.
Meanwhile, today’s consumers clearly expect better combinations of speed, promptness and accuracy – without appearing to be willing to pay for them. (Case in point: The number one reason for online shopping cart abandonment is high shipping and handling costs.)
Should these trends continue, there’s every chance that the average cost per delivery could rise. As a result, unless your company wants to pass 100% of these increases on to customers and risk losing sales you will have to start looking for new and different ways to take costs out of your supply chain.
Will all of the aforementioned things deliver all of the cost-cutting horsepower you need?
Only time and your particular supply chain can say for sure. But it’s safe to say they’re a step in the right direction.
Will O’Shea is Chief Sales & Marketing Officer, XPO Last Mile. XPO Last Mile is part of XPO Logistics, one of the fastest-growing providers of logistics services in North America. The company is the largest provider of last-mile logistics through its XPO Last Mile business. Other XPO divisions provide freight brokerage, intermodal, expedited transportation, technology-enabled contract logistics, global freight forwarding and managed transportation services. The company uses its relationships with ground, rail, sea and air carriers to serve over 14,000 customers in the manufacturing, industrial, retail, commercial, life sciences and government sectors. For more information visit www.xpo.com.
