Applying Customer Success To Order Management Fulfillment
Jake RheudeNovember 2, 2022
With so many options available to your customers at their fingertips, it’s more essential than ever that you do all that you can to spoil them in order to keep making sales, stay one step ahead of the competition – and stay in business. The good news is that if you can fine-tune your order management fulfillment, you can enhance your reputation, boost profits and build lasting relationships so that customer success becomes more than just a buzzword.
Indeed, order management fulfillment, when done correctly, can be the difference maker between success and failure when it comes to consumer stickiness. Research has shown that many customers will abandon a company for good if they receive just one late delivery.
In this article, we’ll be taking a look at why you need to focus on order management fulfillment, how to improve it, and what strategies to put in place so that your customer success rate soars.
But first …
What is customer success?
Customers have higher expectations than ever. They want faster response times, a personalized experience – and they especially want their orders delivered on time.
Customer success is a fairly new concept that tightens the relationship between you and your customers so that you reduce customer churn and acquisition costs, while at the same time creating more loyal customers.
Essentially, you use your company to help customers achieve their goals. The idea is that the greater your customer success is, the more successful your business will be.
Why you need to focus on order management for customer success
Receiving their orders on time boosts customer satisfaction. By prioritizing order management fulfillment, you can overcome key challenges:
Poor inventory management
Inventory management involves storing and dispatching your goods. There are many ways to improve your inventory management – but just as many ways to fail if you don’t get to grips with order management fulfillment.
If a business runs out of stock, customers are left dissatisfied. Worse still, if this leads to a negative brand reputation, it can be hard to recover from. Customer success will plummet.
Issues with logistics
A lack of focus on order management fulfillment can lead to missed deliveries, as well as customers receiving damaged goods. This can also damage a business’s reputation and weaken its ability to turn a profit.
Not just that, but poor logistics planning can lead to an increase in returns, which can be hugely costly to your business while at the same time weakening the customer-business relationship.
Bound-up with customer success is understanding who your customers are, how they behave – and what they want. In other words, when you know your customer inside-out, you will be in a better position to gauge customer demand.
This is important because misjudged customer demand can lead to an overstock. Too much stock takes up too much space in your warehouse, which can lead to an acceleration in costs.
According to the 2020 MHI Annual Industry Report, 4 out of the top 6 challenges faced by businesses center around deliveries and customer expectations. Customers will abandon businesses if items are delivered late or there is zero communication about what happened to their order.
How to improve your order management fulfillment
The key is to find ways to make your warehouse more efficient while closing the weakest links in your current processes. Here are some ways to do that.
Decide on an on-time delivery goal
Once you’ve got an on-time delivery goal that you’ve shared with your team, you’ve all got something to measure your day-to-day performances against. This will help you meet customer expectations if you share your delivery date with them, commit to it – and stick to it.
The easiest way to calculate your current on-time delivery rate is to divide the number of total deliveries with the number of late deliveries. For example, if you had 100 total deliveries yesterday and 2 late deliveries, your current on-time delivery rate is 98%.
You can create further KPIs, including the amount of time spent in fulfillment, inventory accuracy, and even a supplier’s scoring system (you must share your on-time delivery goals with your suppliers). Such KPIs ensure you avoid – among other things – inventory stock-outs and ensure that you meet your on-time delivery goals.
At the heart of customer success is data. Data (and technology) gives you insights that allow you to spot patterns and identify potential issues before they happen, such as potential understock and overstock. This is critical when it comes to order management fulfillment because it can prevent you from taking orders for items that you don’t actually have in stock.
In the context of order fulfillment, businesses can now leverage all kinds of data – including Artificial Intelligence and machine learning – to help them solve problems on the warehouse floor. These include, among others, which inventory is slower-moving than the rest and why demand forecasting may have been hit and miss in the past.
Automate your processes
A third of businesses claim that automation is their number one order management fulfillment priority.
Automation in the warehouse saves time and money and improves your logistics. It helps to increase sales, it drastically reduces the need for manual labor, and on the whole, it makes your logistics operations faster and more efficient.
For instance, you can use Artificial Intelligence to calculate the optimal route a warehouse worker should take in order to find a package.
And while it can be tempting to stick to manual operations on account of them saving you money in the here and now, they will inhibit you as you scale. This is because manual operations are prone to human error and inaccuracy, which can cause a delay in shipping (and therefore more dissatisfied customers).
To achieve automated fulfillment, you need to leverage tools and technology. There are tools that automate your picking and packing processes so that you get to spend more time developing relationships with your customers, while the software takes care of the time-consuming necessities in the background.
If you have an adequate budget for it, you can also automate order processing. This means that time-consuming processes like creating and printing shipping labels, as well as item tracking are done automatically for you via the software. This is especially ideal if you are taking hundreds of orders because it will speed up the entire process.
What’s more, all the tracking information is shared with you and your customers, so that they get to stay up-to-date with their orders. This is key to customer success.
Build relationships with your suppliers and customers
Because suppliers and shippers play such a key role in order management fulfillment, it’s essential that you build and maintain strong relationships. This will ensure a more streamlined logistics operation, which itself will lead to a greater on-time delivery KPI.
Building relationships with suppliers
To build stronger, lasting relationships with your suppliers, here are some tips:
Prioritize communication. This means developing channels and using them to keep in touch with your suppliers, including phone, email, and text.
Partner up. A supplier isn’t just a vendor. Instead, it’s a much better idea to treat your suppliers as actual partners who are working with you toward a common end goal. Keep them in the loop with what’s going on at your company, such as new hires and product changes.
Show appreciation. Just remember that you are the customer in this situation. As such, it’s beneficial if you show your appreciation to your suppliers. Be the kind of customer you want to see.
Building relationships with customers
Customer success requires you to be proactive – and it hinges on communication. As many as 24% of customers claim they will cancel an order if no delivery date is communicated to them.
No matter how well you fine-tune your order management fulfillment, issues will still arise. If you know an order is delayed, make sure you let the customer know as soon as possible as this can go a long way to preventing customer churn.
Remember, by placing an order, your customers have made a commitment to you. They’ve gone from prospects to customers – and they expect to be treated as though they’re in a relationship with you.
As mentioned earlier, you can share shipping and tracking information with your customers. You can also send them an SMS or email update as soon as you know there’s a delay with their order. You should also offer your apologies and suggest alternative solutions (such as a cancellation and refund).
Above all else, don’t make promises you won’t be able to keep.
Final tips and tricks
Prepare for returns
Customer success doesn’t mean that there won’t be any returns – and returns don’t equate with customer churn. Returns happen and unless you prepare for them via reverse logistics, you run the risk of getting caught cold on the warehouse floor.
The aim should be to get your returned items back onto your shelves (or back to the supplier) as soon as you can so that you prevent an understock and an overstock.
You can reduce packing for enhanced supply chain performance by using larger boxes (instead of packing items into multiple boxes) and using less packing materials.
Remember, lass packing speeds up your order fulfillment time and it also means you’ve got more space in your warehouse.
Employ route-management software
There are tools that can work out the most efficient route for your drivers. This means customers get their orders faster and you save money on fuel.
And in these times of uncertain volatility, where freight rates have soared and the national average price for diesel has reached $5.12 per gallon, it’s no surprise that more businesses are adopting tools like Far Eye to map out better routes, which they can then share with their drivers.
Customer success is a long-term investment that, when done right, puts the customer at the heart of your business. By improving your order management fulfillment and getting your orders delivered on time, you can boost your ROI by retaining more customers and boosting customer loyalty.
Be sure to weigh up all your options when it comes to choosing the right fulfillment strategy that works for you but make sure to implement tactics, such as automation and data analysis, that ensure your operations run smoothly, from the initial receiving of goods to delivering them to your customers.
About the Author
Jake Rheude is the Vice President of Marketing for Red Stag Fulfillment, an eCommerce fulfillment warehouse that was born out of eCommerce. He has years of experience in eCommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.
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