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How Shipping Times Impact Customer Retention

Customer retention and the lifetime value of a customer’s business is explicitly tied to a company’s ability to deliver their products to market with speed and consistency. Companies with the fastest and most reliable shipping are almost always the highest performing businesses in their sector.

Slow, inconsistent shipping ruins the customer experience, especially when shipping to distributors or e-commerce consumers. After the time and money spent designing and marketing a product to reach potential customers, the possibility of losing future business due to issues with shipping is greater than during any other part of the process.

Customer retention happens when your company leaves the customer with a positive impression not just of your product or service but the process by which they received them. Delivering your product on time has a lasting impact on a customer’s impression of this process, so managing shipping times effectively is crucial to retaining customers.

Customer’s Expectations

Everyone is familiar with the concept of “Buyer’s Remorse” but by properly setting customers’ expectations at the time of purchase you can mitigate most of the negative effects on customer retention. To do this, you must have a grasp on exactly how long it will take to get your product into customers’ hands after they make the order, including the time it takes for it to ship.

Although faster shipping times are preferable, if you are upfront about the time it will take to receive your product, and you keep to that schedule consistently, you can assure clients at the time of purchase that their order is on its way. It may be necessary to enlist the help of a third party logistics supplier if you find that your operation capacity cannot consistently deliver to the customers in a timely fashion.

Delivery Times Matter

Customer’s shopping for products online have many options to choose from and most make those choices on the basis of two things, the price of the product and how quickly they can have it in their hands. Although you do not have to offer the quickest service out there, if the time it takes your product to reach its final destination is too much higher than your competitors, you are likely to lose business.

According to a survey conducted in 2016 by supply chain consulting firm AlixPartners, LLC, most online consumers expect to wait just 4.8 days for delivery of products they order online. Although this varies in different markets, it is easy to see that customer expectations are changing and your business must also change if it wants to retain these customers.

Market research has also shown that customers are increasingly more willing to pay for expedited delivery if that service is offered. Since preferences vary greatly depending on the product you are selling, it may be a good idea to offer multiple different shipping options to your customers. Your business could benefit from the use of logistic alliances, carrier contracts, or third-party fulfillment services to take the stress off of your infrastructure, allowing delivery of your products consistently to customers.

Customer Satisfaction

Even after the product is in the hands of the customer your job is not done, that is if you want repeat business. It is important to seek feedback to be sure the product arrived on time, that the product was presentable when shipped to the customer and that the customer was happy with the product when it arrived.

To effectively achieve this, you must track the product through the shipping process and be sure you answer any customer service issues that may arise quickly.

In cases where you are unable to get a delivery to a customer on time, don’t be afraid to apologize. Owning up to when you fall short of your customers’ expectations may allow you to salvage the relationship for future business.

When the complaint is the result of using a third-party service, use these issues as feedback to assess the savings represented by using third-party services versus the potential loss of customer retention. It is probably best not to attempt to shift blame someone else. Instead, offer recompenses if appropriate and take steps to ensure this does not happen in the future.

Help is Out There

If you are finding your business is being held back by inefficient or inconsistent shipping times, you should consider third-party providers that may be able to help. There are companies whose entire business model is bringing other companies products to market and they have expertise in the area that your business may lack.

You can opt to use a shipping carrier or choose a full-service fulfillment company to bring your products to market. Make sure to assess the company’s reputation before entering into an agreement. When you decide on the right company for you, be sure to monitor their interactions with your customer’s to ensure their satisfaction.

Shipping is affected by so many factors and the stakes are quite high in terms of retaining customers. If the burden of handling shipping internally is impeding your ability to service your customers, it may be best to leave this area to the experts.