Logistics Customer Service – An Attempt at a Definition
Over the years, many definitions of the term have emerged.
One of them states that logistics customer service is “a system of solutions that ensures a satisfactory experience for the customer between the time an order is placed and the time the product is received” (J. Twaróg, Logistics Metrics and Indicators).
The second, equally interesting definition reads: “[Logistics] customer service is the process of securing a competitive advantage and creating added value through supply chains in order to maximize total value for the end customer” (J.J. Coyle, E.J. Bardi, C.J. Langley Jr., Logistics Management).
Based on these two definitions, we can conclude that the most important objectives of logistics customer service are:
- increasing customer satisfaction,
- building, improving, or maintaining good relationships with customers,
- increasing the company’s competitive advantage.
How can we achieve these goals? The 7W principle can help us find the answer.
The 7W Principle in Customer Logistics
Sometimes the 7W rule is treated as synonymous with the definition of logistics customer service—which seems like a somewhat superficial approach to the topic. That doesn’t mean, however, that this rule isn’t helpful. Here are the seven elements you need to take care of.
The 7W Principle is simply a translation of the 7R (7 Right) Principle. According to this principle, a company should deliver the right product, in the right condition, in the right quantity, at the right time, to the right place, to the right customer—and all at the right price.
The Right Product
This point generally refers to ensuring there are no errors in order fulfillment, but it goes even further. The right product is one that the customer needs—that is, one that meets their needs and satisfies them in terms of both appearance and functionality.
It’s not just about delivering the right product, but also about having the right products (tailored to the customers) in the store’s inventory.
Proper condition
The most important thing here is to ensure that the product is safely packaged and delivered. Every shipment should contain a product that is free of defects and damage —so be sure to check them before shipping.
It is also important to protect the contents—so that even in the most unforeseen circumstances, the product reaches the customer in good condition.
The correct amount
Storing excess inventory is costly and can sometimes lead to waste (e.g., when products have a short shelf life). One of the most important aspects of customer logistics is ordering the right amount of products —so that they are available for purchase but do not take up unnecessary warehouse space.
The Right Time
Although every item on this list is important, delivering a product or service on time is one of the most important. Timely deliveries are a key part of building a company’s reputation as a trustworthy business.
Keep in mind, however, that the earliest possible delivery isn’t always the best option. Sometimes customers want to receive the product within a specific time frame (for example, when they’re abroad but will be returning home in a few days), rather than as soon as possible. The ability to customize the delivery date for the customer is also an important convenience that can influence how the brand is perceived.
The Right Place
Delivering goods to the correct location may seem obvious, but even in this context, there is often room for improvement. To ensure the highest possible quality of service, those processing the order should be instructed to verify the delivery address immediately before shipment. It’s also a good idea to give customers the option to add notes regarding the location or method of pickup.
The Right Customer
Care must be taken to ensure that products are delivered to the correct person or company. Leaving packages with neighbors or at a company sharing an office on the same floor of the building is a practice that may only be used with the express consent of the original recipient of the shipment.
The Right Price
This point can be interpreted in two ways.
First, it is important to offer customers products at a price they are willing to pay. Proper pricing of a product or service is crucial, because a price that is too high can lead to unsold inventory sitting on the shelves; a price that is too low, on the other hand, often results in the need to reduce profit margins and creates pressure to increase sales volume.
Second, customers like it when prices are clear and visible. Disclosing all additional costs early in the ordering process is a good way to gain customers’ trust. The later a customer decides not to make a purchase because of hidden costs (such as high shipping costs revealed in the final step), the greater their disappointment will be.
Key Elements of Logistics Customer Service
Product Availability
An important aspect of customer service is ensuring availability. Even if you have a small warehouse and cannot maintain a large amount of inventory, you can ensure your company has access to products through agreements with suppliers, wholesalers, or manufacturers. In such a situation, it may be beneficial to use a fulfillment service.
When it comes to product availability, companies that keep inventory on hand have an advantage over stores that rely on dropshipping. Using this logistics model doesn’t necessarily mean you’re at a disadvantage. However, in order to ensure the highest quality of customer service, it is important to clearly state that delivery times may be longer and that product availability is not guaranteed.
A personalized approach to each customer
Although a large part of customer service, marketing, and sales involves skillfully defining customer personas, you have to be prepared for the fact that customers sometimes have unique needs and expectations. By allowing buyers to customize the timing and method of delivery, order size, or even packaging, you send a clear signal that you treat each customer as an individual.
A good first step might be to include a form in the order notes section—this is a good place for customers to request that their order be delivered to a neighbor, that shipping be delayed, or that the product be gift-wrapped.
An even better solution is to add an appropriate field during the order checkout process (before payment). Special packaging or express shipping services can then be priced appropriately and transparently. This makes it easy for the customer to decide whether they’d rather pay a few zlotys extra for an additional service or stick with the standard order.
Error Correction
Mistakes happen—that goes without saying. For your part, however, you should do everything you can to minimize the likelihood of them occurring. The fewer problems customers encounter when shopping, the more they’ll trust your brand.
However, it’s easier to fall from a great height—remember that if you get your customers used to the highest level of service, every mistake will be much more noticeable.
Clear and consistent communication
When a customer asks questions, it’s essential to provide answers as quickly and thoroughly as possible—that much is clear. Tracking shipments is also an important part of communicating with customers. In many cases, although this feature is available, it isn’t actually very transparent.
Give your customers insight into every stage of their shipment’s journey—from order receipt, through packaging and shipment, all the way to delivery. The more detailed your delivery tracking system is, the greater your customers’ satisfaction will be.
Order Processing Time
No matter how well you handle all the other aspects—if customers have to wait too long for their products, they won’t be satisfied. If time is of the essence for them, they’re unlikely to return. The time between when an order is placed and when the customer receives the package should be as short as possible—except, of course, in exceptional situations where the customer is okay with a delayed delivery.
When planning deliveries, keep in mind where the product is located initially (at the time the order is placed)—especially if you operate on a dropshipping model. Estimate how long it will take to prepare the goods for shipment and how long it will take the carrier to reach customers in different parts of the country before you promise a 24-hour delivery.
A 3-Step Strategy for Logistics Customer Service
Just as the sales process can be divided into several stages, logistics services can also be divided into:
- after-sales.
- pre-sale,
- sales,
Pre-sale (pre-transaction) phase
At this stage, the company is focusing on preparing to fulfill orders. This is the moment when it is essential to ensure the conditions necessary to provide the highest level of customer service.
In this phase:
- Specify the estimated delivery time.
- Try to understand your customers’ expectations,
- Ensure product availability,
- Plan actions and a contingency plan in case of supply disruptions and other difficulties,
Sales (Transactional) Phase
At this stage, you fulfill orders in the best possible way. You follow procedures, and if problems arise, you respond—also in accordance with the scenarios developed earlier.
In this phase:
- You optimize deliveries.
- you take orders,
- You pick and pack shipments,
- you ship products,
- You track orders and provide information about them to customers,
Post-sale (post-transaction) phase
Equivalent to after-sales service, the third phase of customer logistics involves nurturing customer relationships. At this stage—even though the sale has already been closed and the goods delivered—you establish yourself as a reliable company that responds to issues. Good after-sales service doesn’t guarantee it, but it significantly increases the chances that the customer will decide to return to your store to shop.
In this phase:
- You analyze customer satisfaction levels.
- you process returns,
- you handle complaints,
- you answer customers’ questions,
- you provide warranty service,
How do you measure customer service?
If you want to rely on concrete data rather than impressions and gut feelings, it’s time to start measuring your customer service levels. You can do this by regularly reviewing the criteria below.
Average order fulfillment time
We measure this metric in terms of the number of hours that have elapsed from the time an order is placed until the shipment is delivered to the recipient. An excessively long order fulfillment time may indicate an unfavorable warehouse location or inventory availability issues.
On-Time In-Full (OTIF) Rate
The OTIF (On Time In Full) metric indicates what percentage of fulfilled orders are delivered on time and without any issues regarding completeness. The higher the percentage, the better. Low results (depending on your baseline; even a result below 90% may be considered too low) require an in-depth analysis.
Check at which stage the order is encountering difficulties and try to resolve them.
Number of complaints and returns
Closely linked to all of the above, the complaint and return rate says a lot about customer satisfaction. Meticulously record every complaint and return, along with the reason provided by the customer. Try to analyze the causes of these incidents at least once every few months.
Summary
Logistics-based customer service is a set of activities that may seem complex and complicated, but is also crucial for achieving a high level of customer satisfaction. These aspects should not be underestimated, as they have a direct impact on how consumers perceive your brand.
Keep the 7W rule in mind, and be sure to regularly monitor customer satisfaction metrics. This will enable you to provide your customers with the highest possible quality of service, and ensure your company generates revenue and maintains a steady customer base.
