Store Owners Beware

June 5, 2010 by  
Filed under Customer Retention

I wanted to post a quick thought here that all store owners should consider.

Change can be good — sometimes — especially if it is meant to decreased expenses (thus directly affecting the bottom line.) However, change that has not been planned out properly or change that does not take into consideration customer needs and wants can cause trouble.

I recently worked with a store owner who thought that switching shipping companies would save them some expense over the previous shipping company (which did a great job … but had slightly higher prices.) In theory, and on paper this might have been true. However, without proper planning and without taking their current and potential customers interest into consideration, the event turned out to be a disaster … causing long time customers to leave, new customers to never return (even canceling orders), and a customer service nightmare for those working the phones.

You see, the store may have thought that looking at the sheer numbers (from a shipping rate standpoint only) that the one carrier with lower rates would have saved them money. It makes sense … if you only look at that.

But running an ecommerce business — or any business for that matter — means you must take into consideration much more than just “perceived cost”.

The customers feedback all basically said the same thing … “I’d rather pay a few dollars more to get my package on time and fast then to not get it at all or get it much later than expected.”

Considering the lifetime value of customers that will not be realized due to leaving, the new customers never returning, and the bad word that is surely to spread across the internet about them, the company has dug themselves a hole that is going to take a lot of energy to correct. Rather than saving money on shipping they ended up losing a ton of money both now and also potential future realized revenue.

So the next time you consider making changes to your shipping (or anything else to save a few bucks) operations, make sure you do your homework first, plan next, and when all the information is presented, be sure to choose the option that benefits your customers most.