A few years ago, we were working with a global shipping and logistics company to solve some basic challenges related to customer experience and loyalty. They’d invested in cost-cutting efforts for years, and they lost focus of the experience they were delivering to customers (…and employees, but that’s a story for another time). At best, they were delivering an unremarkable, me-too experience, and they didn’t have the brand recognition of their main competitors in the European market where we were focused. Not surprisingly, this sent them down a path to higher customer attrition, lower organic growth, and eroding margins.
As we assessed the situation, it became clear pretty quickly that the main issues driving customer disloyalty were related to on-time delivery and lost packages. That makes sense. Nobody likes to deal with a missed delivery or lost item, and for business customers, both issues can put big money at risk.
Then things got more interesting. We brought together some business customers to dive deeper into the situation. We asked them directly what an acceptable on-time performance would be. They recognized that some things would be late. It’s just the nature of the game, and the more you ship, the more you’ll experience delays on a pure volume basis. Ultimately, they felt 90-95% on-time performance would be good. We then asked them what their current on-time performance was today. The average guess across the group came to roughly 60%. We happened to have the actual data handy for each client, and we shared it with them. To their surprise, not one was below 98%.
What does this mean?
In a reliability business, customers generally don’t recognize when things are working as anticipated. They only take note when things go wrong. The exceptions get greater weight than the norm, and this skews the overall perception of the brand and the experience.
What can brands do?
In addition to the obvious importance of improving reliability itself at least to an acceptable level, there are two key things companies should focus on to upgrade the experience, increase loyalty, and decrease margin pressure:
- Visualize the value of the norm. If customers won’t naturally recognize the value of your regular performance, find ways to show them. For the shipping and logistics company we’ve been talking about, we came up with a simple solution. They started printing on-time performance on shipping labels to constantly remind customers that they were actually performing very well overall.
- Excel in the moments of exception. Mistakes will happen. Unexpected things will arise. Reliability businesses need to rise to the occasion. This takes people with the passion, skills, and authority to do what people do best—show empathy and find creative ways to solve problems. For the shipping and logistics company, this meant increasing passion by helping people see the human impact of their work, upskilling service teams, and removing process and policy barriers preventing service people from resolving problems quickly.
Are you in a reliability business?
Reliability businesses aren’t just those in industries like logistics, telecom, or utilities. As more organizations shift to automated and digital customer interactions and adopt subscription-based services, they’re also entering reliability land. Purely focusing on frictionless experience puts a high premium on operational excellence, and even the best-performing companies will fail some of the time. To earn high customer loyalty and build durable relationships with customers, firms need to focus on helping customers visualize the value of their routine performance and excel in the moments of exception.