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Nailing the process on the front end requires significant planning and execution on the back end, but it pays huge dividends in the long run. Here are three ways companies can use a well-thought-out, end-to-end shipping strategy to keep customers loyal for life.
1. Provide free or affordable shipping
About a year ago, 10 years after it was founded, 4moms - a consumer tech company that makes baby gear - began offering free shipping to its online customers. The move paid off almost immediately. "We've gotten a lot of great feedback," says Teresa Hammond, 4moms' vice president of marketing. "It was a positive thing for online sales."
Once considered a novel perk, free shipping is now something that many consumers have come to expect. According to the UPS Pulse of the Online Shopper™ study, for example, 64% of orders include free shipping. Furthermore, 44% of shoppers have abandoned a cart when their order value didn't qualify for free shipping.
Hammond says providing free shipping satisfies two of 4moms' business objectives: to provide customers with a great brand experience and to drive conversions and compete with other retailers.
"We really view it as a marketing expense," she adds. "For us to be competitive, free shipping is definitely something we need to do."
Even free shipping with price thresholds can have a positive effect. Steve Nielsen, the cofounder and chief marketing officer for AspectLED, a commercial and residential LED lighting manufacturer, says that once the company began offering free ground shipping to customers for orders greater than $299 there was a 29% decrease in abandoned shopping carts.
Another strategy is to provide free shipping via economy ground while requiring additional fees for expedited delivery options. The UPS study showed that online shoppers were willing to wait an additional two days to qualify for free shipping.
2. Be transparent about the process
Yes, customers want free shipping, but that's not all. They also want to be in the loop. With every purchase, customers expect to be able to track an order in real time and receive notifications when there are delays.
Hammond says 4moms provides its customers with email notifications when the order is received and then a tracking email once the package has left the warehouse.
AspectLED offers similar insight into the shipping process. The company sends a notification to customers when the shipment goes out, on the morning of delivery, and then when it is delivered.
The notifications are important, Nielsen says, because they provide proof that the products are being speedily processed. "The first step to fostering customer loyalty with shipping is fast delivery speed and fast shipping after order placement," he says. "Customers want to see a shipping notice right away and see that it's on the way."
He adds that the company routinely gets emails thanking it in response to the email that says a package was delivered. "Repeat business is critical to our company and referrals are critical - 99% of our growth comes from referrals and repeat business," Nielsen says. "We see more repeat business from customers who get their packages faster."
3. Be predictable - in a good way
Customers want this type of attention throughout their entire shopping experience, not just once their order has been shipped and delivered. The UPS Pulse of the Online Shopper survey showed that more than half of shoppers appreciate getting email alerts about price drops and products that are back in stock.
For a business to offer that kind of information to customers through real-time updates about prices and inventory, it needs to have clear visibility within its own supply chain. Even before customers add anything to their carts, the selection of products they see, along with information about their availability, needs to be based on the company's internal tracking of where products are stocked.
When planning a solid shipping strategy, then, organizations need to better integrate internal inventory tracking systems - which makes it easier to inform and satisfy customers externally.
Today's customers are more educated than ever before, and asking them to be loyal to a brand requires offering them exceptional selection and service. On the visible forefront of that service, and behind the scenes, is a carefully planned shipping strategy. And it has to be at the very core of how businesses operate.
This post is sponsored by UPS.
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