The U.S. distribution landscape looks considerably different today than it did a decade ago. E-commerce has grown almost 18 percent each year, according to McKinsey & Co., and customer satisfaction expectations are high.
For the most part, industry shifts have tended to change gradually over time, making it possible for product distributors to keep pace, but a policy of “that’s the way we’ve always done it” will no longer work. Distributors need to adapt and find solutions to improve customer satisfaction in a dynamic and increasingly aggressive environment. Often, the solutions become evident when leaders examine their labor resources and realign assignments to meet peak market demand. The results pay dividends in terms of improved customer service, employee retention, and ongoing satisfaction.
Improving Customer Service By Improving Call Center
The call center is the front-line of customer service. Below are five suggestions that can turn thorny issues into solutions that make customers feel not only satisfied, but also pampered:
Customers frequently will develop a rapport with individual customer service reps and want to call in to the queue and request this particular agent. This can strain the allocation of resources and throw upheaval into the way in-bound calls are usually managed.
Solution: give key customers a direct line for specific agents. The upper echelon of customers will appreciate this added level of service.
Schedule staffing according to the needs of the business. In addition to honoring customer requests for specific customer service reps, schedule staffing according to the needs of the business, not according to apparent labor availability. In order to facilitate proper staffing, it’s necessary to have a 12-hour lead-time to plan for a period of time when a large influx of calls is expected.
With customers moving more toward web commerce, it’s important to designate sufficient employee resources to answer emails generated from websites so that customers receive same-day replies, and in no cases longer than 24 hours.
Add shipping and handling routines available to customers. Customers want to see a wider variety of freight options in both number of carrier options, as well as a variety of pricing models. Some prefer the most economical methods regardless of speed of delivery, while others want to see a more reasonable expedited method – often pitting UPS against FedEx, depending on geographical location. Let the customer choose their own delivery options.
Expand web functionality—invoice reprints, chat, and so on. At times, customers may require invoice re-prints. New web functionality is available to give customers this service as needed by order online. A “chat” program allows customers to pause on a website and reach a customer service agent for troubleshooting on their order or answer product questions immediately.
Change call center culture to an environment where a CSR has to seek approval to “say no”. This strategy empowers agents to make customer satisfaction decisions on the fly, without having to seek managerial approval. Instant gratification translates into a customer who will come back regardless of whether or not there were mistakes made with the order.
Improving Warehouse Operations:
A Case Study from the Healthcare Product Industry In response to healthcare reform putting their clients on the fast track for growth, a number of distributors of healthcare, medical supplies and complementary and alternative medicine products have been faced with an upsurge in demand.
In order to retain customers in an increasingly competitive market, many companies have worked to align operations, customer support and labor resources to ensure effective problem-solving and timely execution. What is true across all industries is that such goals must always be top-of-mind in order to remain flexible and open to change for long-term sustainability.
Any distributor that is making the shift from catalog to digital sales of its product line, while managing the challenges of a large centralized distribution facility, is challenged to maintain customers and attract new ones. Success requires meticulous adaptation.
While most companies have been able to keep pace with the paradigm shift to an Internet environment, some have failed to recognize the need to update warehouse management. As a result, these companies have experienced growing pains in the form of customer dissatisfaction with shipment or delivery times.
To address this hurdle, successful companies have pushed beyond the “that’s the way we’ve always done it” philosophy to develop new and effective strategies. For example, one health and wellness product distributor met with numerous employees representing all aspects of the company’s operations to further evaluate their issues and gather information regarding customer satisfaction.
Key conclusions that the managers reached included:
- With the 24/7 digital age, customers had developed higher expectations, i.e., same or one-day shipping service.
- Because of the standard 8 a.m. to 5 p.m. Monday through Friday warehouse work schedule — the way they had always done it — orders from the Internet tended to pile up over the weekend.
- Workers were falling behind before they even got started on Monday morning, which added pressure, an unpredictable work schedule and costly overtime.
- Such issues resulted in delivery delays: for example, a customer who ordered a product on Friday night might not receive it until Wednesday afternoon.
Today, a perceived lengthy time gap between order and delivery is unacceptable to the customer, especially for time-sensitive health and wellness products.
The distributor was dealing with a broad inventory, which included everything from a $3 consumable supply to a $4,000 piece of equipment. What hung in the balance was the company’s commitment to offering bulk and small quantity pick, pack and ship operations under one roof — so that customers could avoid split shipments — and shipping in-stock orders within 24 to 48 hours.
Two Simple Solutions
To overcome these challenges, this particular distributor devised a two-part plan to realign labor resources to meet peak demand – and concurrently, improve customer satisfaction.
First Solution. During high demand – Monday, Tuesday and Wednesday – the labor force would work longer hours to accommodate the volume. On slower days – Thursday and Friday – they would work shorter days. This immediately reduced overtime costs. If overtime was still required, it would be scheduled as far in advance as possible so that workers could better manage their private time.
This strategy eliminated 90 – 95 percent of shipment delays, and generated greater customer satisfaction. At the same time, workers were happier because they had a predictable schedule that enabled them to coordinate commitments outside of work – and they enjoyed the perk of leaving early on Fridays.
This simple, clearly communicated and effective solution enabled the distributor to better manage customer and labor expectations, and reduce costs.
Second Solution. The distributor developed a highly effective approach by cross-training employees, i.e. teaching every person to do every job in the warehouse. If, for example, a forklift operator was out sick, anyone on the floor would be ready, able and well trained to take his or her place. This strategy created exceptional efficiency and a 20 percent reduction in headcount.
Before implementing these two strategies, the distributor’s fill rate was less than 50 percent of products sent on the day received, and only two-thirds were shipped by the end of the next day.
Today, two-thirds of the distributor’s orders go out the day they are received, while 98 percent go out by the end of the first day. Customer inquiries about estimated delivery have reduced by more than 50 percent. And the workforce is happier, creating a more optimistic company culture and a group of employees who are “rowing in the same direction.”
The distributor’s goal to better serve customer’s needs by offering a comprehensive, superior selection of products for “one stop shopping” was no longer compromised by a shift into the digital age. The changes and improvements they implemented made them more competitive and sustainable. Two simple ideas that maximized labor resources raised the level of customer satisfaction and positioned the company for even more rapid growth.
Issues related to customer service often come down to employee satisfaction. Companies must be open to change—with global and cultural trends, as well as within the organization itself. A well-oiled machine that treats labor as part of the solution – and not the cause of problem – leads to a better work environment, increased production, perfect orders and happier customers. It’s less expensive to avoid problems than to fix them after the damage has been done, especially in time-sensitive, fast-growth and highly competitive industries.