Customer Retention Strategies: Streamlining Your Reverse Logistics

Understanding the importance of Customer Experience in Reverse Logistics

Used extensively in eCommerce, reverse logistics helps businesses retain and improve customer loyalty. It also helps recoup the cost of returned products. Almost 30% of merchandise ordered online is returned. This makes the valuation of eCommerce returns around the world close to a trillion dollars per annum. 

Customers prefer to shop from a store that provides hassle-free returns. So, companies are reinventing the way they provide customer experience.

Customer experience is a vital measure that can be used to boost loyalty. It can also rake in referrals, improve likes and shares and help you hit high numbers in social mentions. This powers up your brand image online.

There is a current consumer purchase pattern of review-driven shopping on marketplaces. Bettering customer experience will get you out of the murky waters of bad reviews and help you stay afloat. By improving the shopping experience, you also reduce churn and ensure loyalt

The experience flow begins at the point when shoppers discover your business’s potential to fulfill a product or service need. Customer experience then moves into the transaction process and shipping and delivery operations. But it does not end here.

How Product Returns can Affect Your Customer Retention

Customers often face difficulties while returning a product they had purchased online. This is partly because of the lack of a concise and easy to follow return policy and return process. In scenarios like this, shoppers are more likely to browse and not convert. 

When customers hit a hurdle while processing a return, it affects customer experience. A flawed or negative returns will create a dissatisfactory shopping experience. And the disgruntled customer will probably leave your store with a negative review. A difficult returns process will lead to customer churn and discourage repeat shoppers.

The negative review could also lead other customers to believe that your store’s shopping quality may have deteriorated since their purchase. This could have them looking for other options where their needs may be fulfilled.

While product returns mainly affect customer retention, it can also impact your customer acquisition. 

Smart techniques to leverage Reverse Logistics and increase Customer Retention

A streamlined returns process can turn the negativity of returns into a pleasant experience for customers. This area of your store’s operations has the capability to uplift your customer experience considerably. The customer may have returned the product.

But a hassle-free shopping experience will ensure they still urge their friends and family to try your store. Easy returns could also have them possibly becoming return customers themselves.

You should utilize reverse logistics to improve and execute your policy and process. In this way, you can recoup the best possible out of every return. You can also keep your bottomline safe, hold on to your customers and even bring in new ones.

1) Create or Update Your Returns Policy

Your store’s reverse logistics operations begin with the return policy. Return policies dictate your store’s terms and conditions regarding any return, refunds or exchanges that you offer your customers.

All store policies need to be prominently displayed on the website. All employees and staff need to be updated and briefed regarding the contents.

Over 60% of shoppers peruse policies before making a purchase and almost 80% expect convenient returns. While ensuring your returns operations are customer-friendly, ensure they suit the nature of your business.

Finding that sweet spot between customer expectations and keeping your business’s bottom line safe may take some time. But you can always amend your policy if you notice a particular condition doesn’t work for you.

2) Learn why Customers Return Merchandise

No matter the type of products you sell, you need to get down to resolving customer complaints by tracking data from purchase. Every reverse logistics operation should be followed by appropriate investigation. This is done to figure out where things went wrong.

When shoppers complain about quality or that the product is defective, all stores must ensure they run proper checks and tests before restocking it. This includes taking a look at your manufacturing and forward logistics as well.

The involuntary response to a returned merchandise would be to put it back on the shelf as fast as possible to recoup the cost. But this decision will hurt you in the future when shoppers notice that the product is smaller than standard, defective, of low quality, etc.

This will also bring in returns that you could have avoided. And that involuntary decision you made to restock with all haste, will pummel you in the zone of customer retention.

3) Meet Customer Expectations

Meeting customer expectation is a synonym for good customer experience. Stores need to target them to increase customer retention. Shoppers like personalized services and to feel like a VIP.

Most stores are working towards these experiences holistically or through loyalty programs. Providing excellent shopping experience to improve customer retention has become the core strategy of all businesses.

Customer satisfaction can be viewed as a event-centric or cumulative process. Cumulative process involves the shopper’s experience with the brand beginning with discovery, browsing, purchase and post-purchase experience.

Event-centric process focusses on the purchase and review of a particular product. By opting for one of these, eCommerce retailers can work on improving their forward and reverse logistics, as well as supply chain management to neutralize any potential threats to customer retention. 

4) Digitized Process and Transparent Monitoring

Manual returns, while being slow and error-prone, could also lead to customer requests and selective enforcing of return policies. They could even be responsible for issues such as missing credit or delayed refund, creating frustrated customers and churn.

Tracking returned products that are manually processed can also be hard. This makes it difficult to process and put them back on the shelf or dispose of.

When returns processes are digital, a trail is created from a return request till the returned merchandise is restocked or disposed of. This helps you stay on top of things and increase profit while minimizing loss.

Most businesses track and monitor the movement of products across other processes. With a centralized returns platform, everyone involved in reverse logistics can stay updated. This includes everyone right from the warehouse team, the customer service staff all the way to the accounts department.

But the part of reverse operations after the product reaches the warehouse or hub is often overlooked. By increasing visibility on reverse logistics and monitoring return data, eCommerce retailers can reduce customer churn and improve customer retention.

5) Boost Productivity

Improving your reverse logistics strategies can improve your store’s productivity. To begin with, transportation costs can be reduced by using aggregators. Production speed can be boosted to keep up with supply. You can lower administrative costs through use of automation.

The quantity of products that require repair and replacement can be reduced through use of AI and scanners. In this manner, you can divert your resources to optimize customer satisfaction. With swift resolution and cycle time, you can be sure about better customer retention.

Many businesses are not happy with their reverse logistics operations as they have invested their attention towards product realization, store curation and forward logistics. With a little effort and some creative thinking, upgraded returns processes can help you offer excellent customer experience.

6) Track Your Returns

A lot of money and potential customers are lost in bad returns management. Retailers often lose track of their product after it reaches their warehouse.

They then miss the window for seasonal items or those that have outlived their lifecycle. Products that have manufacturing defects and can be returned to the supplier may have crossed the acceptable timeframe.

By immediately identifying the problem and addressing it, you can maximise the potential of returned goods. When you follow an airtight process for returns, you don’t need to look for ways to keep your bottom line safe.

This means you don’t have to worry when it comes to pricing your goods or planning your logistics cost. Although this is a long winding path, tracking and restocking or offloading your returned goods leads to increased customer retention.

7) Maximize on Assets

Reverse logistics management providers have developed channels to dispose of returned goods. In this manner, they can cater to customers who are on the look-out for discounted products. When stores cannot retail their product at full price, they can recover most of the loss by improving depreciating assets.

Sectors such as automobiles and electronics often offload their returned goods for as much as 80% of the original value. There exists the possibility of offering excellent returns processes and recouping the loss. This is achievable via various sales channels that allow you to improve your customer retention and bring in new customers as well.

8) Use Data to Improve Your Store

Any and all information that you can harvest from tracking your returns - why, how, where, when - can help you incorporate changes to the front end of your business. This will help  you reduce returns and churn.

For quality related complaints - shoot your vendor a mail or find better suppliers. For size issues - standardize or describe as smaller or bigger than usual. When you choose to analyze your data, you also have the power to provide first hand, verified data to your vendors, staff or logistics team.

9) Adapt and Manage Inventory

Success often depends on your ability to adapt to the mercurial nature of customer demands. By integrating a smart returns portal, businesses can offer flexible solutions for customers.

A well-strategized returns process will eliminate lost shipment, slow delivery, and other inconsistencies. Improving profit margins, return agility and rapid replacements, will ensure customer satisfaction. By prioritizing and enhancing customer satisfaction, you increase customer loyalty and retention to a substantial degree.

10) Incorporate technology 

Customer retention is a result of customer satisfaction. By investing in incorporating technology into your reverse process driven by well-considered strategies, you can make returns easier for your customer. 

There are many ways to incorporate technology in your returns process. You can use user-friendly commands and action buttons to power up your returns and inventory reconciliation. You can process information automatically to segregate your returned merchandise based on reason for return. All of this can be integrated with your shop’s software and WMS.

How can ClickPost help you increase customer retention with its reverse logistics management software?

ClickPost is an automated returns management software. AI-driven, it can help you increase customer retention. How does it help, though?

First and foremost, automating your returns requests cuts down the time and effort needed to process them. It also removes the possibility of errors that may otherwise occur. Your customers will be happy with the speed with which their requests are processed and satisfied with the outcome.

ClickPost removes the need of manually picking shippers, which is another time-consuming task. The minute a returns is accepted, it will pick a shipping carrier based on input data that lead to a favorable decision.

This eliminates any chance of picking an unsuitable or unreliable shipper for your returns, which could frustrate a customer.

What if the customer is not at home when the pick-up person arrives? What if incorrect contact details or addresses have generated a non-pick-up report? Your business cannot call every customer to check if their package has been picked up.

And customers do not like following up either. To make this hassle-free, ClickPost acts as a liaison between the shipper and the customer to sort out any problems and make sure your returns are picked up.

ClickPost also provides tracking visibility of all your returns executed by various logistics partners in a single portal. This allows you to update your customers regarding their returns which will give them an idea about refunds.

By ensuring pick-up is easy and the shipper is trustworthy, your customer’s returns experience will be happy.

The visibility of their returns or exchanges will be appreciated by your customer, who can stay informed at every step. By making your reverse logistics automated and streamlined, ClickPost will help you increase customer retention.

Conclusion

While most techniques for using reverse logistics to increase customer retention may not be directly linked, they all impact customer satisfaction and experience. When customers experience easy returns, they are satisfied - this improves their loyalty to your brand, which ensures you retain their custom and also grow your acquisition rate.