How to Use Logistics to Improve Customer Satisfaction and Loyalty

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No matter the size or scale of your business, having a reliable and resilient logistics management system is key to achieving long-term success. But did you know that the positive impacts of having a logistics management system in place can go way beyond the warehouse, and even affect how customers interact with your brand?

As Emarsys’ Customer Loyalty Index 2022 emphasises, 75% of consumers worldwide consider themselves loyal to at least one brand – reflecting that a sense of loyalty to and affinity with a brand is more important than ever when making a consumer decision. As businesses seek out new ways to stay ahead of rising competition, logistics is quickly emerging as a deciding factor in how you can secure customer interest, increase customer satisfaction, and build customer loyalty. This not only helps you grow a steady base of customers that favour your brand over competitors, but also ensures that they consistently return to purchase your products and services over time.

But what is logistics, and what exactly is customer satisfaction in logistics?

Logistics and how it affects customer satisfaction

DHL Express employees discussing logistics management in a warehouse

Shopify defines logistics as “the process of coordinating and moving resources — people, materials, inventory, and equipment — from one location to storage at the desired destination.” The term encompasses everything from sourcing to procurement to transportation to warehousing – which makes it all the more important you have a robust logistics management system to keep track of where everything is supposed to go, and how it’s getting there.

In logistics, factors affecting customer satisfaction include delivery time, cost, packaging, and communication. For example, if a customer receives their order in a timely manner, at a reasonable cost, and in good condition, they are likely to be satisfied with the service. In contrast, if the package is damaged or if the delivery is delayed, it is likely to lead to dissatisfaction.

Well-managed logistics solutions can directly affect customer satisfaction by reducing shopping cart abandonment rates, ensuring timely delivery, and accurately fulfilling an order. With a comprehensive logistics management system in place, you can accurately track the movement of a single item from its arrival at your warehouse to the moment it’s placed in a customer’s shopping cart to the completion of its delivery to their doorstep. 

In other words, while the logistics process may appear to start on the back-end of your business, it is eventually intertwined with key aspects of the customer’s shopping journey as well. Logistics can even continue to play a role in customer satisfaction after the order has been delivered through processes such as hassle-free reverse or return logistics, product maintenance, and other after-order services.

Conversely, poorly-managed logistics resulting in order delays or damaged goods can leave a poor impression of your business on a customer, affecting your long-term success.

By having a well-managed supply chain, businesses can ensure that they have the right products in stock at the right time, allowing them to meet customer demand and avoid stockouts. This ensures your customers have positive experiences during crucial checkpoints in their online (or offline) shopping journey, which then builds up positive associations of your brand and brand loyalty in their mind. This in turn encourages them to return to your business in the future as they can be assured of a smooth order, delivery, and fulfillment process – allowing you a distinct advantage over other businesses offering an identical product or service.

So how can logistics management better satisfy customer demands? If you are looking to improve your customer satisfaction ratings through logistics, here are some measures you can consider implementing:

Investing in advanced logistics management technology

The most straightforward way to improve your company’s logistics handling is to invest in logistics management technology systems that work for you. Many of the upcoming logistics and delivery trends in 2023 in particular incorporate AI and machine learning to streamline the logistics process, with examples such as Autonomous Mobile Robots (AMRs) with real-time path planning for smooth fulfillment, or automated inventory management for complete real-time visibility over stock levels. Companies who have already embraced data and digitalisation in business are also further considering how 5G technology will impact logistics, such as using IoT to increase time savings and minimise supply chain risks and shocks.

Smart warehouse management systems and transportation management systems also help to improve the accuracy and speed of your business operations, resulting in faster delivery times and reduced errors. Additionally, providing real-time delivery tracking and visibility information allows customers to stay informed about the status of their orders, building trust with your customers and enhancing their impression of your company. These factors all contribute to customer satisfaction and delight, resulting in positive long-term effects for customer loyalty too.

Reevaluating the efficiency and effectiveness of your processes

As logistics encompasses almost all aspects of day-to-day operations, businesses hoping to improve their logistics in order to better appeal to consumers must be prepared to assess their existing process from the bottom up. This enables you to spot any shortcomings that need to be addressed, or gaps that need to be filled. For example, if your customers in one specific town, city, region, or country are constantly providing feedback on poor delivery or fulfilment experiences, it’s a sign that your logistics measures in that area may need an urgent overhaul. Business owners should also be prepared for the possibility that changes to one aspect of your business logistics may trigger trickle-down effects by exposing weaknesses in other aspects of your operations.

Collaborating with reliable logistics and delivery partners

A reliable logistics and delivery partner is a key part of improving your overall logistics management strategy within your business. Partnering with global leaders in logistics allows you access to express delivery options such as flexible on-demand delivery and same-day or next-day delivery, or value-add features such as real-time tracking and visibility. All of these can go a long way in improving customer satisfaction and loyalty within a competitive and saturated market, providing you with the tools you need to achieve long-term business success.

Discover more e-commerce tips online with DHL Express Malaysia.