When Do Customers Become Engaged
Consumers today have more places to shop than ever. If you have an ecommerce business, and you want online shoppers to buy from you, you need to make the shopping experience pleasant and easy. But where does that process start and end and what can you do to make it more pleasant for your customers?
We invite you to watch this presentation by Tobias Buxhoidt from parcelLab from the Shippo Summit. If you prefer, we’ve also transcribed his presentation below.
I want to start with talking about customer experience. I don't need to tell you that customer experience is important, but what really is important is that it actually has clear revenue impact. Research supports this, I just brought along something from the Harvard Business Review, where it states that those customers with the best shopping experience will actually spend 140% more than those with the poor experience. Obviously, those are the extremes but that's a huge opportunity for the retailers. When they do to improve the shopping experience, really make those customers happy, they will say thank you when they buy again.
Boundries of Customer Experience
The most interesting question now is, actually, where does the customer experience start? It starts with the first touch point, the first interaction between the retailer and the customer. It can be a marketing campaign, emails, can be an ad, this is where it starts. Most importantly, when does it really become relevant? This is the most important questions that you have to ask yourselves. When do customers really become involved? That's when they hit the check out button.
That's when they start to care, because that's when they actually make the decision, "I want to have this product, and I'm willing to pay the price, and now it's mine. Now I really care what's happening." This is where it all starts. This is where we see in the market, most retailers, not all of them but most, do actually say good-bye. It's like, "Okay, thank you very much for your purchase, here's your confirmation, here's your external FedEx link, or whatever it might be, good-bye, take care by yourself. I don't want to talk to you anymore. You can look it up by yourself, you got the tracking number, please don't touch or talk with me anymore."
And that's a big issue, because, in this process when you shop online, there's no more engagement between the retailer and the customer on the other end. They just spent days, waiting for the delivery, with nothing happening. Yes, you had them a couple of minutes in your shop, and then you had the opportunity for a couple of days to talk with them, because during that time they will be responsive. They will be receptive to what you're talking about, you have their full attention, because they just bought a product. They care about this. That is a huge opportunity that most retailers are missing when you look at the branding aspect and the trust building that can happen during that time. When you look at the big players like Amazon, or Walmart, they do this kind of stuff, because they would never let go of the customers. They always keep up that customer contact.
This does have one very significant impact. When you put yourself in the position, when you go online and you buy something when are you actually going to judge the retailer or the shopping experience? It's not going to happen at the check out. Because the delivery is such an important bit of the entire experience, when something goes wrong during the delivery will you be happy with your product? Probably not. You'll probably have some kind of bad experience with it and that will definitely impact your decision on going back to that retailer again. That's once again, the Amazon effect, where I know when I'm at Amazon and I buy something it will get to me quickly. It will happen. I trust. That's the retention part of it. When you go to someone else, I might not know that.
There's a lot of stuff that can happen during the delivery, that will make people complain, come back and give bad ratings, and it all just happens because the retailers are not close to their customers. They leave them alone. This is something we see that most retailers should engage. The retailers should stay close to their customers. They need to manage the entire customer journey, not stopping at the checkout, but really enlarging it throughout the entire process. That isn't just saying, "Thank you for your purchase." This is actively guiding the customer through the entire delivery process. Being there for them, being proactive when something goes wrong. You don't have to wait for customers to come back and complain. That's already too late. I can't do much when a customer is irritated, but what I can do, is when I realize something might not happen as the customers expectations are, for example: certain delivery time. I might reach out to them proactively. Before they get made, before they call up or before they post bad reviews.
That's a very important topic, but in order to do this, as retailer, you really have to do it well. If you do not do it well, you do have an issue. It's your name at stake, when FedEx or UPS is communicating with the customers, what they do, when you don't take care of it, when something goes wrong, they are sometimes to blame. When your name is on that email, or whatever kind of communication you choose, and you're communicating something that is not right you do have an issue because it will come back to you.
Next to doing that communication under your brand, it's important to do it personally. Meaning, you're not Amazon, so actually every retailer that is smaller than Amazon, does have some kind of soul, some kind of character, you're building a brand around what you're doing. This is clear advantage you have, and that you should leverage to survive the competition. You don't have to be anonymous. You can really be the one who's talking to your customers. Build up that human like connection, because that's something that your customers will really like, and it will also help them build the trust and the retention that will actually pay off too.
Just to give you another example of what we've experienced in the States, is that Amazon is a lot faster, than every other retailer out here. In Germany, it's a bit different. In Germany, we're talking about one or two days of delivery for everyone, because the entire logistics networks are just that good. In the US, we've seen that it often takes many days when you ship from one coast to the next. You don't have to compete with the delivery speed that Amazon is offering, but what you can do is use the time to engage with the customers. Even if takes one or two days longer, that's fine, because you have a chance to really make friends with the customers during that time. You can engage, you can talk with them. You can make them valuable returning customers during that time.
Hidden Marketing Channel
That will actually lead to the effect that we have measured. The entire communication will be very relevant to your customers. We're talking about open rates of more than 80%. That is a unique open rate, the same as click rate of more than 50%. Your customers value this kind of communication, and everything you put into this communication will reach the recipient. We are actually talking about a supercharged newsletter with open rates, that are a lot higher than you would get anywhere else. Instead of just using that kind of communication to provide information regarding the delivery, you can use it as a marketing channel. As a free marketing channel, basically.
Be relevant. When you reach out to your customers, it must make sense to them. You can't just spam. When you do spam, like using information, status updates from your delivery company, that you just wrote directly to your customers. It doesn't make sense. It needs to make sense to your customers and you need to be relevant. In order to do that it's very important to move away from the pure shipping data, the information you get from your carriers, and add another dimension. That's the customer expectation. Customer expectation is really crucial for the customer experience because they want to get relevant information from you. You do that you're basically changing their perspective. You're not talking through the eyes of the logistics companies who are providing the information, you'll be talking through the eyes of your customers. You only talk to them when it makes sense.
Do not abandon your customers
When we get feedback on communications that we do send out, or our retailers, it's mostly "Thanks a lot for this information. It was good. That was exactly what I needed." When you know what your customers expect, you can really channel that information to your customers.
What is really important when you do this, is that you understand the data that is underneath. Most of the retailers work with more than one carrier, so you really have to ensure that the entire experience is harmonized. When you look at the data, it doesn't matter whether its UPS, DHL, or FedEx shipment, it always needs to be the same for your customers. That really needs to be seamless, it needs to be easy to understand and it always must be the same. Validating that information as well. We've seen it many times that there is simply wrong data coming from the carriers, which will obviously lead to a wrong communication being sent out to the customers. That's bad.
A classical example that we've seen many times is some kind of delivery guy wants to make a delivery and on the way to that house, for example, he's already using his handheld and telling the customers the parcel has been delivered. Then somehow realizes it's the wrong address. What does he do? He takes the parcel, brings it back 20-30 minutes later, checks it back into the system and then tries another delivery time the next day. When you, at that point in time, would have reached out to your customers within your brand communication telling them, "Awesome your parcel is there, we're very happy" and it is not there, you do create a lot of problems. What happens is exactly what you want to avoid, your customers are going to be irritated, your customers are going to most likely call up your customer service department, creating some kind of effort for you. For sure, you will have ruined that entire shopping experience. That customer is definitely not coming back to you. It's really important to understand that data.
If you push out those communications, you have to choose the right channel as well. Retailers quite often come to us and ask us what's the right channel? We often can't tell them. We can do some consulting and guiding and tell them, "Okay, in a certain industry with a certain product you might use that channel" but it's always the customers actually that need to decide this. You might have a very young customer base, you might have an older customer base, you want to chose text, email, Facebook, Snapchat. Whatever, wherever you find your customers, that's actually the channel you want to use. Maybe you want to root them into the Facebook stream, it doesn't really matter, it's up to your customers to decide. They can actually make that decision during the check out process.
When you do all this you actually allow for this relevancy to happen. Your sending out the right messages, through the right channel, to the right people with the right content. Then, that's when it really becomes customer centric, and that's when it really makes sense to a recipient. When you do this, we measure that the NPS will go up 10%, because the customers like what they see and they like the information they will get.
Delight your Customers
To give you some use cases, what this actually looks like, when you are monitoring expectations, most often a certain delivery time, and you find there is something going on. There's a lot of stuff that can go wrong during the delivery process, it can be mis-routed, it can be damaged, it can be left somewhere, which will prolong the actual delivery date. You want to inform your customers immediately. You don't want to wait for them to come back to you and tell you what went wrong. You can obviously do that proactively, which is nice, but you can also add different content blocks that help the augmentation.
For example, this is a retailer who's sending around musical equipment, so you might tell them "Now you've got more time to set up your personal music equipment set up that you are actually going to buy" or what we do have very good experiences with is placing coupons, like a "Sorry for that" that then can be used to get the customers back into the shop. They will actually say, "Okay, this is nice. The retailer's taking care of me. They're telling me proactively. It's not great that it's going to be late, but still they are fair enough to tell me, and I get a personal coupon so I might as well give them a good rating as well."
What we've seen here, once again these are really measure figures from our retailers that they were able to reduce the inquiry rate by 33%. Those inquiries, especially those where they are "Where's my package?", "When's my parcel going to arrive?", they won't happen anymore because you are pushing out the relevant information right before the customer realizes that something's going wrong.
You can also build trust during the delivery. Here we're talking about use case if you have in-store pick ups. The parcel needs to be picked up somewhere. You can provide that information, it doesn't have to be UPS or FedEx who's providing that. Make your brand be the one who's providing it. That really helps you show the customer you care, that you're there for them. You can add other data sources, for example: Google Maps integration that you would click on it and be guided straight to the pick up store. You can add traffic information, you can add weather information, whatever you feel is relevant can be added as long as you do the communication by yourself. It's just branding, branding, branding on every touch point.
What we've seen is actually up to 100% retention for the retailers using these services. Instead of leaving the customer alone at the checkout, they are being there throughout the entire delivery process helps to almost double the retention rate. They come back quicker, and more often when they trust you. That is very important.
You can also support your customers with a product they are buying. There can be some kind of set up process that they need. It can be a mattress where they just need to unpack it and set it up in the right way, it can be some kind of tech gadget, where it's important for the product experience that they are prepared in the right way. Did you install the app? Did you set up your account? This is how you use it, this is how you put it together. There's a lot of stuff that is really relevant to the customers that you can provide before the delivery so the customer is prepared in the best way when they actually get the product.
All the links that are placed into this kind of communication will route back to your online platform. There are no external links leading to FedEx or UPS, they will always come back to your shop. I forgot to mention, we measured an 8% increase in cart sizes, people who trust you, and who've been using our solution have seen this increase. When you think of it from a psychological point of view, when I'm shopping online and I do have that trust, that I know when I hit the buy button that it's going to come and it's going to be good, and I don't need to worry about it. I will just buy more. It's once again, the Amazon effect. I have done that retention building so I know that it's going to work, and I'm not skeptical anymore.
Paired with that outbound communication, whatever you're pushing out, what channel is totally up to you. You also have to provide something like "Track My Parcel" side. This is important because there are many customers who want to know more about what is happening. As soon as you hit the button, track my parcel, you'll need to land on a page that is within your shop environment. No external links. Doing that, you have the very clear benefit of bringing back 3 out of 4 customers back to your platform. They're not lost. You always get them back in your ecosystem, and you can provide them the information that you think is necessary. You can put all kinds of content as well in the messaging and on those "Track my parcel" sites. It can be static, it can be weekly offers, it can be dynamic, it can be product recommendations, it can be coupons, it is totally up to you as long as you do that communication by yourself, you're totally free to use it as a marketing channel.
If you want you can also do returns. For example in the fashion business returns happen all the time, it's very important to offer the same kind of experience for the return process as well. Customers get nervous when they're sending in returns and they don't hear anything. They've paid for it, and now they want their money back. You might as well tell them what's going on, what's happening and give them all the best information.
Let me show you a couple of examples of what we have done with certain industries. Starting with the Fashion industry what we quite often see is that they do something like integrating weather information. Why do they integrate weather information? Because when they know at what point the package will be delivered at what location they can look up the weather for that location. Here we have an example for some sunnies but you might as well think of another use case when you're selling a T-shirt, and then you realize the thing is going to New York or Chicago, and the weather on that particular date where that shipment is going to happen is going to be bad. It's going to be raining, windy, you might place and umbrella right here. Or something else that just makes sense for that customer and that situation where he is. Once again, that customer will be very receptive to what you're telling him, and then you will have a high conversion on those product recommendations.
Another coupon that we offer is called, "Trace my parcel". Since you do know how long the package is going to be on the way until it arrives, you can use a verification product. You can say, "You do have 28 more hours to use this coupon. You do have 4 more hours until your package is delivered and that coupon is going to expire." Creating that kind of urgency actually helps for those coupons to be used. Just another example of how you can use this touch point.
Last but not least is a classic recommendation example. For cross selling or placing accessories that might be relevant for a certain product that customer has bought. Once again, you will see that the entire communication is fully personalized. It's not just the information, pick up your parcel or your parcel will be delivered, it's starting with your term. Your package is going to arrive soon. By the way this is what you bought and you might as well be interested in the other stuff that we're offering.
Next we also offer certain features for Omni channel retailers. Those retailers who do have physical stores. This is the example that we've already seen, what we also suggest localized coupons. It might be a pure ecommerce delivery but you know exactly what area that delivery is going to go and you also know the date and time of that delivery, and you can combine that. Tell them "We have a store nearby." We might want that customer to come into our store and offer them some kind of coupon or anything to have them buy more stuff locally. You're using the additional touch point that you have for free marketing to route them back into your ecosystem.
Use it for reviews. What we've seen is that when you actively engage with the customers, and actively ask for review at the right point of time. Meaning right after the delivery, or maybe if the customer needs to experience the product more, maybe one day after the delivery, you will see an uplift of 50% in your recommendations. You will only send out a request for a rating when everything went well. When you do see that something went wrong, obviously the customer will not get the link to rate the product or you as the retailer.
You can also use it for sharing. Adding elements to post it on Facebook, do a tweet about it, when you're really excised about what you just bought, or what you just got delivered to your place why don't you just use that to really spread the word.
I'd like to talk about products that do need some kind of set up. We've seen the example before with mattresses. Basically it's always the same case when you do have some product that you do need some kind of explanation to really work well. This is the right time to tell the customers. Don't wait until they've tried it, failed and come back to you. Do it before that. Use their attention and make the first steps as easy as possible. You can really support the onboarding process and you can ensure that the entire product experience is great. We have that example as well. Very straight forward, you need an app to really use whatever product you're getting, do it before. Get everything set up. Be ready as soon as the product is there, it will be functioning very well.
There's one last thing I wanted to mention as well. You can also use that information to actually bring them back into the shop before the actual set up. Talking about that, there's one very important use case where for example we're using the data that we're seeing in our system and the retailers are having about the delivery, about the delivery times, to use as a conversion booster within the shop. There is an example where you have next to the buy button an information that says, "Okay. When you hit the buy button until 5pm today, your parcel will be there on Thursday." Instead of saying it's going to be 5-14 days, what we see quite frequently, you can use the data that you have to take that uncertainly out of the process. Consumers really have a problem buying something when they are insecure.
When you tell them once again, it's the Amazon effect as well, if you hit the button now it will be there next week on Thursday. They are way more likely to make that happen. We've seen increases of up to 2% in conversion when you do that. It's important that when you do communicate such a certain delivery time, you need to monitor what's happening. Monitoring expectations, doesn't matter where you come from or what you do. It's the most important stuff. When you communication something you need to make sure that you make sure that you take care of that, that you track that. Then it will work out all good.
I hope I could really give you a rough idea why you should communicate with the customers after the checkout. Why you shouldn't let them go. Why you should be the one really staying close to them and using that communication as a free marketing channel that will really boost your retention.
Speaker Bio: Tobias Buxholdt is the founder and CEO of parcelLab, a cloud-based service that automatically manages the entire customer communication during shipping by using big data algorithms to identify customer-relevant communication triggers.
This video comes from our inaugural shipping conference: Shippo Summit. Hundreds of customers, partners and industry experts from around the world joined us in San Francisco for a full day program of inspirational talks and dynamic conversations that explored leveraging shipping as a competitive advantage for ecommerce businesses.
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