|
Marketing From the Backend
Marketing is an investment. Order fulfillment is an expense. These
two statements create the greatest illusion in the direct and
interactive marketing industry. It began with mail order. Drop a
letter or catalog in the mail and folks send you money! The more you
mail, the more you receive. Mail order expanded into direct
marketing and e-commerce, but the fundamental belief remained the
same. Marketing drives sales.
So,
invest in marketing and fill your coffers. Except…the folks who send you
money expect you to fulfill their orders. The fulfillment costs add up
quickly – order processing, product, packaging, service and shipping - and
can turn revenue into losses. It is little wonder that fulfillment is
viewed as a necessary evil!
Reducing fulfillment costs becomes the driving force in many companies.
Unfortunately, this creates a dichotomy. On one side, costs are reduced,
increasing short-term profitability. The other side is a reduction of
service that alienates customers. It reduces growth and long-term
profitability. The challenge is to find a balance between service and
expense.
The
first step is to change the way you view order fulfillment. Utilize your
marketing models to define your operational objectives. When you plan a
mailing, there are costs, projected response rates and average order
values that determine the results. Every good marketing manager reviews
both immediate and lifetime projections before approving a marketing plan.
Costs are deemed acceptable when the projected results warrant the
expense.
The
same process works for fulfillment. Evaluate costs in relation to
projected results. Look for improvements in sales and efficiency. Too
often, operational enhancements are driven by external sources instead of
unique corporate objectives. Drive your decisions with the needs of your
company, employees and customers.
Next,
define specific costs and benefits associated with order fulfillment. When
you can plan the results, operational expenditures start to look like
investments. Every company must know their exact fulfillment cost.
Evaluate enhancements by the return on investment. Define service
requirements by your customers’ expectations. For example, timely
shipments are necessary, but is 24-hour service required or will 48 hours
suffice? Customers think in weeks, so orders placed this week and
delivered next week will rarely receive WISMO (where is my order) calls.
How would shifting shipment turnaround to 48 hours affect your customers?
How would it affect your costs? (Please note: this is for standard
shipments only. Air shipments have to be processed immediately.)
Finally, invest in building relationships with your customers. This begins
with service dynamics. Find the key service indicators by analyzing your
customers’ history. Choose the top 10-20% customers. How many had
backorders? How quickly were their orders shipped? How many had
complaints? How quickly were the complaints resolved? What are the service
similarities? What are the differences?
Your
top customers are the ones that you want to duplicate. You will find that
many (if not all) have had problems with their orders at one time or
another. The goal is not perfection, it is quick resolution. Plan for
challenges, because orders will fall through the cracks. Resolve issues
quickly. It will keep your customers happy and reduce fulfillment costs.
Every
customer contact is an opportunity to reinforce branding and increase
sales. Marketing and operations must be viewed as equal and complimentary
partners. Marketing makes the promise. Operations fulfill it. This direct
relationship between service and sales can be leveraged into growth and
profitability. Invest your resources in understanding how everything works
together. Use your knowledge to inspire customer loyalty with every
contact. Are you ready? Integrate operational objectives into your
marketing plan and watch your company grow!
If you haven't done so already...
It is free and guaranteed
to help you grow your business.
Articles
Home • New Rules • Free Articles • Consulting • Contact Us • Search Site
|
Subscribe
