Customer Loyalty in the Logistics Industry. Are you only as good as your last delivery?

Bsquared account manager Susanne O’Connell was previously Customer Services Director for a global logistics company. Here she reflects on how customer loyalty can be crucial in a crisis.

In my experience, customers are rarely concerned about the 99.9% of consignments that are delivered on time, but the delayed (and mislaid) consignments will be etched onto their memories for all eternity. An excellent track record becomes irrelevant when one, business critical consignment suffers a service failure. The consequences for your customer can be dire when a vital consignment is late (or lost), so what is the key to surviving the storm in terms of your relationship with your customer?

A serious service failure is a crucial event in the customer relationship. If the crisis is well managed, it is quite possible that your customer’s loyalty to you will actually increase. Relationships develop and change; they are influenced by each interaction.  Every interaction has the potential to improve customer loyalty. When a problem occurs in an interaction between a customer and a supplier, the strength of the relationship, prior to the event, is one of the strongest influencers of the outcome. If the relationship is robust, it will certainly help enormously in mediating the problem.

I was the Director of Customer Services at a sizeable logistics company for fifteen years and, during that time, we weathered many storms but very rarely lost a customer. Our holistic approach to the customer / supplier relationship meant that our bonds were strong. We placed customer engagement firmly at the heart of our business and nurtured our customer relationships with time, effort and understanding. 

There are practical ways of promoting customer loyalty:

Pre-empting your customer’s requirements

One of our customers was a major, international television channel. Their requirements were often varied and complex and created many challenges for us. Their shipments were often urgent and difficult so we invested a lot of time in engaging with those teams to pre-empt their requirements and to raise their awareness of customs constraints and formalities. Through our consistent efforts at customer engagement, I believe that we achieved the hallowed status of “trusted advisor”.

Dealing with disastrous situations immediately

We were asked to ship a large, sophisticated hi-tech item which was not only valuable in monetary terms but also very urgent and absolutely time critical. A labelling mix-up occurred and the item went to the wrong location. The consequential loss suffered by the customer was indescribable. What saved the relationship with the customer that day was our speed of admitting the fault and helping to sort the situation and the consequences for us were hugely diminished and alleviated by the strength of our relationship.

Like many sectors, the logistics industry has matured; it has come of age. In today’s world, there is little to differentiate the top global logistics players from one another, in terms of capability, operational excellence and technology. The customer relationship is, therefore, more critical than ever. Ultimately, the logistics industry needs to consider how the types of bonds that they have with their customers can drive their desired business outcomes. An active strategy for the maintenance and improvement of customer loyalty is critical in a business where you may only be as good as your last delivery.

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