Chi Lab

What happened?

The store sold the perfect product to the perfect buyer. However, in failing to deliver the product as promised, the expected value and goodwill created by the purchase was destroyed. Mrs. Buyer will absolutely tell her friends. Mr. Buyer will also tell his friends at work. He will talk about Mrs. Buyer's unhappiness as much as the delivery issue. Add a multiplier of negativity if they email anybody or post to an on-line forum. Both buyers will be seriously angry with the merchant and will be effusive in sharing that opinion with anybody who will listen for a time approaching the half-life of uranium 235.

Oh, the Irony.

Guess what? The retailer that sold the product had contracted the delivery out to the manufacturer! But then it gets even richer. The delivery itself was contracted out by the manufacturer to a 3PL! The knuckleheads who blew the delivery were not only not from the selling merchant, they weren't even from the manufacturer! Whose reputation got destroyed in this? Certainly it wasn't the manufacturer or the 3PL. Your receipt only says the name of the super center!

Delivery Failure will destroy all Value ever created by a Sale.

Sales and marketing are mainly about making a promise that your product can satisfy a customer's need. If the customer believes your promise and thinks you have priced your goods relative to his ability to pay, he buys your product. Delivery of the product on time, as promised, fulfills the customer's expectation and creates value. It is value for money that will entice a customer to purchase from you again. It is also what creates brand loyalty. Service above all will create a return customer. In an age where almost all products can be commoditized, it is service delivery that will break through the clutter to create brand equity. That's a supply chain thing as much as a product or pricing issue.

The Best Sales Companies are really Supply Chain Companies.

Companies like Nordstrom, Ritz-Carlton Hotels, and others have created substantial high value brands because not only do they make the promise, they deliver on it. The key is delivery. They have measured the promise they are willing to make, invested in the ability to perform, and then allowed talented employees to execute the fulfillment.

Nordstrom is famous for allowing customers to return products regardless of whether the product was bought on-line, at a local store, or at a store in another state. Sales personnel are enabled to find products anywhere in the network and ship them to customers or to their store as needed. It's all about satisfying the buying experience. What enables that experience is having the supply chain systems and product visibility to execute. If you are more convenient to buy from...you will get the business.

Decision empowered employees, with visibility to inventory available to sell, and the supply chain tactics to get the product to a customer will find themselves competing on the basis of customer satisfaction rather than price alone. In the mind of the customer, when the promise becomes an expectation, you have created brand equity.

Here is the Real Secret: It's not really about selling. It's about delivering service, goods, and experience to create value. If you can't deliver, you can't convert concepts to cash.

Four First Steps to controlling Branded Delivery

• Make a Promise you can Keep - Many new companies underestimate the delivery requirements of their customers and find themselves with an inability to quickly get product to market. Businesses with perishable goods like the floral industry understand this only too well. Nothing is as perishable as money. If you promise next-day or 2nd day delivery, select carriers who can get it there on time and work with 3PL's and warehouse operations that can execute same day outbound order turns. 
• Take Control of Transportation - New companies will often allow more experienced vendors to control delivery of products on either a drop ship basis or through a third party agent. You will find you can negotiate better terms with carriers and find more flexible delivery scenarios by controlling the freight yourself. Vendors often mark up transportation as an additional hidden revenue stream. Put that money in your own pocket.

Outsourcing remains a completely valid option, but hold service providers and carriers to the same standards you would hold your own employees. Use quarterly business reviews as a way to impart lessons learned to the 3PL at the same time you teach your own team. The 3PL is in fact an extension of your company in the eyes of the customer. The biggest reasons 3PL relationships fail is a failure to define and measure specific goals. If metrics aren't defined early, scope creep can enter into the relationship and soon, what the 3PL is asked to deliver isn't the same as what the contract called for. That's never a recipe for a happy family.

• Choose your vendors and carriers wisely - Insist that they provide you with on-line visibility to where your goods are in transit, whether inbound to your distribution center or outbound to your customer. Most carriers can provide online tracking for free. Also ask your carriers about hybrid delivery schemes that may combine long haul transportation with parcel distribution for the final mile. Make measurable standards, and the tools to do the measuring, part of your contract!
• Empower your Employees - Allow your customer facing employees to make decisions to satisfy customers. Whether that means replacement of a product, providing credits for returns, or helping them choose alternatives when goods are not available, make your sales and customer service people "powerful" in satisfying customer needs. Allow them to fulfill the promise your marketing has put forward. You'll find this creates great company morale as well as satisfies your customer.

By Eric J. Joiner, Jr.

Source: www.freightdawg.com