The Perfect Order Equation

Nov 28, 2007 7:18 PM  By

I need that shipped overnight! I need that delivered today! I do not want to pay a restocking charge!

Do these all sound familiar? I‘d be willing to bet you can come up with a book full of the things your customers expect. But where do they get the audacity to expect the sometimes unreasonable? Right from you! Your competitors did not raise the customer service bar, you did. Everyday your call center personnel make promises to customers that raise the bar even higher. But isn’t that what you want? Your people are merely doing what they have been taught, just like your customers.

How do you respond to an irate customer who received an incorrect shipment? Don’t we ship the product Next Day Air to make up for the error? Or maybe, we drop everything and make a special delivery to them. How do we respond to a customer who has ordered the incorrect item? We often handle it the same way as when it is our mistake. We do not want to upset a customer, especially in today’s market. So we are training the customer to think that all errors will be resolved free of charge. What is the problem with this? Nothing–if you or your customers don’t make a lot of mistakes.

Keep in mind that shipping errors are magnified in economic downturns. Why? Because if your customer has been thinking of changing suppliers, they may believe now is the time to do it. (Or at least fake like they are going to change so they can get a deeper discount.)

Shipping is the last nonverbal way we communicate to our customers. Your marketing material, your Website, and your catalog are all tools to get you new business. Your warehouse is the one tool you have to maintain your current level of business.

Customer loyalty began fading when the “mom-and-pop” shop got too big to know the customer. Loyalty truly became a thing of the past with the Internet. The customer doesn’t need to know who they are buying from. They just want what they ordered, when it was promised, and for a competitive price. If they decide to buy from you the next time, it will be based on whether you did at least two of the things I just mentioned. If not, you have just trained them to buy someplace else.

Many individuals will continue to patronize your place of business even if the price is a little high. But they will only do this if their other two needs are being met. If your competitor does not have an accurate inventory therefore does not deliver on time, you have an advantage when price becomes an issue. But if your sales personnel train them to expect a lower price for the business, what happens when you cannot beat the competition’s price? You don’t have a leg to stand on.

Your company does not compete for the business you get, your warehouse does. Your company does not lose customers, your warehouse does. Your company can no longer afford to look outward for answers to keep your customers loyal; it has to look inward at your warehouse.

It is time to adopt a new way of thinking about our organizations. We must view the total experience of the customer and not just total value of their account. If we look at that experience:

CC + TIS + AI + TAOF + PNP + OTS + CI + OTOA = PO

(Customer Contact + Timely Information and Solution + Available Inventory + Timely and Accurate Order Fill + Proper and Neat Packaging + On Time Shipping + Correct Invoicing + On Time Order Arrival = Perfect Order).

Of the eight steps in this experience, your warehouse is responsible for five of them. This means if your customers are not loyal, which one of the five areas in their experience did they have a problem with? If they remain loyal it is because your warehouse has trained them to be.

Rene’ Jones is the founder of Total Logistics Solutions, (www.logisticsociety.com) a warehouse efficiency company.