If you work for a Logistics company, this video is for you.
Last week, our CEO explained the ROI of Consumer Feedback for the Consumer Electronics industry. Today, he will help you to calculate it for the Logistics industry.
For logistics, we understand every company that manages to deliver something from a point of origin to a point of consumption. Within this industry, there are several touchpoints between client and companies through their customer journey. A way of outstanding within this market is making every customer interaction counts. In this video, our CEO Riccardo Osti will explain to you the ROI that comes from Consumer Feedback Analysis for every touchpoint. Then, we will let you decide if it represents a good investment for your business.
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In this video, I will tell you how a logistics/transportation or shipping company can benefit from customer feedback, and ultimately, how to calculate the ROI of your activities.
Just to make sure we are on the same page… In a general business sense, logistics is the management of the flow of things between the point of origin and the point of consumption in order to meet the requirements of customers or other corporations.
So, simply, we need to move something from location A to B. This process is composed of several different steps, in which customers or shipping partners play a role and establish contact with the shipping company. These touchpoints are the richest source of information for logistics organizations, and this is what you have to analyze in order to improve your service.
I really want to tell you how to calculate the ROI of customer feedback for every single interaction. So…what are these interactions? Here’s a list of the 5 most important:
1. customers search for a provider to ship something from a to b.
When customers search for a shipping provider their search is influenced by customer reviews. So understanding customer feedback and having more and better reviews drives sales. Calculate the ROI by finding the correlation between better reviews and increased sales. Here is how you calculate it:
ROI: x% higher score = x% more sales – cost of improvements
2. customers purchase the service from the selected provider.
When customers buy they evaluate how well you communicate on your website for example. They often ask questions via chat if you have one. Analyze their questions to identify patterns and improve your communication. Calculate the ROI on the point of sale by doing A/B testing and measuring conversion rates. Here is how you calculate it:
ROI: Delta conversion rate A vs B * average purchase value
3. After the product is shipped, customers may interact with the provider to have more information.
Customers will call your customer service because they have questions that are not answered by your communication. Analyze the conversations to understand why they are calling in order to reduce the number of calls. Here is how you calculate it:
ROI: Delta # of calls before vs after improvement * cost per call
4. the item reaches the distribution center at the destination and it is sent out for delivery.
In this case communication with your distribution partners is key to make sure you identify the causes of unsuccessful or delayed deliveries. Delayed deliveries lower customers satisfaction, increase amount of calls and decrease sales. Analyze internal chats or messaging to reduce the number of issues in the last mile. Here is how you calculate it:
ROI: Delta # calls before vs after the improvement * cost per call
5. customers receive their product and rate their experience.
In this case, you really want customers to publicly rate their experience so that others may read positive reviews and become customers as well. You may realize that this endpoint is connected to point number one, where customers begin their journey. In fact, customer feedback is a loop that does not start or finishes.
If you calculate the ROI of each step, you will derive the total budget of a customer feedback project. Then find a partner that can help you to execute it. If the cost of the partner is below the total budget calculated, it would then result in a good investment, with positive ROI. Here is how you calculate it:
ROI: total savings + extra revenue – the cost of customer feedback analysis partner
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See you next time.