Benchmarking Customers for Better Service

Nov 23, 2005 10:05 PM  By

You already benchmark your distribution center for all sorts of things—number of shipments, daily picking output, inventory turns, and so on. But have you considered “benchmarking” your customers so you can serve them more effectively? Logistics expert Debra Ellis suggests the following ways to evaluate your customers and figure out the services most applicable to them:

1. Profile your customers so you can mail more accurately. There are six types of customers: Newbies, Rising Stars, Platinum, Falling Stars, Bargain Hunters, and Rest in Peace. Each type responds differently, so mailing according to the profile increases response.

2. Define the criteria that apply to each profile. Wouldn’t it be nice if there were universal rules that magically identified a customer’s profile? For example, customers who haven’t ordered in the past 12 months are Falling Stars. Or, customers who ordered within the last 30 days are Platinum. But what if that order, the one placed yesterday, was that customer’s last? Wouldn’t it be nice to know before you mailed them six more catalogs? To maximize your return, you need to know the quirks of your specific customers. How does a customer move from Newbie to Platinum? If you knew, then you could start the conversion process with the first order. How many Newbies go directly to Rest in Peace? Would a shift in marketing and service change their pattern? Without measuring and monitoring their buying patterns, you’ll never know.

3. Measure customer satisfaction by profile. We all know that customer satisfaction is important, but quantifying it seems impossible. Not only is it possible, but unlike activities that require a stunt double, you can try this at home! In fact, it is better if you do. You can skip the consultant, the high-end software, and the statistician. You are the one that lives with the results and you should understand every aspect of your business. Devise a method of evaluating customer satisfaction that pertains to your merchandise, your marketing program, your customers, and the service levels you are able to provide. When you have the results of your survey, you may decide to hire a call center, outsource your fulfillment, or bring it all in-house. You will be able to make these decisions because you will know the costs associated with these services and their effect on customer loyalty. If you decide to outsource, you will still be able to monitor performance and ensure high-quality service.

Note: If you function best under pressure, here’s something to make you quiver in your boots—according to BizRate Research’s Online Holiday Mood Study, almost 60 percent of e-commerce merchants are planning catalog mailings to drive online sales. You might want to start your benchmarking program ASAP! For more information, send an e-mail to or call 828-626-3756.