What is the True Cost of Poor Customer Service for Carriers?

Late deliveries from time to time happen. However, repeated missed deadlines, poor communication, and rude drivers can destroy a carrier's reputation. What does this boil down to? Bad customer service – and its negative impact is staggering, as shown in the following diagram:

An infographic showing statistics regarding customers experiences with poor customer service.

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While the numbers vary by industry and customer type, it’s clear: customer service has a lasting impact on your carrier business, so it’s important to get it right. This post will go over some of those specific negative effects and how your business can avoid them by improving customer service today.

The Balancing Act of Customer Care

For the carrier industry, customer service is reliant on the entire experience, not just the moment of fulfillment. Your fleet is expected to provide damage-free deliveries on time, with competitive pricing and a smile. For many businesses, achieving near-perfect customer service may feel like an unattainable goal, but experts are finding it’s an effort worth investing in.

A circle showing the three parts that make up customer satisfaction and loyalty - quality, price, and experience.

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When asked about the main factors that impacted customer satisfaction for carriers and deliveries, sticking to the service-level agreement (SLA) and providing a high level of operational quality were ranked above competitive pricing.

A bar graph with customer rankings of the importance of various attributes of a Supply Chain Logistics provider.

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As Parcel Monitor noted, “This indicates that the relationship between the customer and his supplier is more complex than just providing a good service at a fair price. To earn the loyalty of customers, the overall experience needs to be good and there are many factors that contribute to that other than quality and price.”

What Makes Up Good Customer Service?

If it isn’t just about the price, what other factors contribute to a positive customer experience? This is important to consider since the more boxes you check off to ensure a great experience, the more likely your customers are to use your service again and recommend it to others.

A study by EFT and UPS found that the most common attributes known to influence a customer to recommend your service to others include:

  • Supporting customers when their needs change
  • Employing knowledgeable and skilled staff
  • Learning from mistakes and trying to continuously improve
  • Providing consistently clear and accurate data
  • Engaging proactively (especially when mitigating an issue)

Carriers and fleets need to take note of these factors that play into customer service and realize that customers don’t expect you to be perfect, but they are demanding. Although managing the many factors that make up customer service can feel daunting, good service is known to improve customer retention rates and increase average customer lifetime spend. Considering it costs 5 to 25 times more to acquire a new customer than to keep an existing one, we’d say it pays to invest in your current customers’ experience.

The Lasting Effects of Poor Customer Care

On the other hand, just as quality customer care can benefit your business’ bottom line, poor customer service can seriously hinder it. When a carrier arrives late or with damaged goods, it can damage the brand's reputation with bad reviews and complaints. The average consumer tells 11 people about a good experience and a staggering 15 people about a poor experience.

Almost 70% of consumers claim to have ended or halted service with a company due to poor customer service alone. This can add up over time, resulting in enterprises losing an estimated $338.5 billion each year due to poor customer experiences.

A bar graph showing global losses from poor customer service in USD billions by country.

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How Fleet Management Creates Customer Satisfaction

Customers expect a level of service that involves transparency, instant communication, and timeliness. However, businesses don’t have unlimited budgets to invest in customer support teams and resources. Instead, they are turning to telematics solutions that improve customer service without breaking the bank.

With a fleet management system, carriers can confidently deliver goods and services while increasing employee mobility. Using integrated fleet management software, fleet managers can track all drivers and vehicles on the road—meaning data can be shared seamlessly in real-time between the driver, command center, and the customer.

This includes drivers being able to provide real-time ETAs without needing to call and verify the vehicle location. GPS fleet tracking software automatically collects data on vehicle location and removes the need for command centers to call for driver updates. The enhanced communication creates added transparency for your customers and can help fleets hit higher rates of on-time deliveries, which benefits your customer satisfaction.

Speaking of on-time deliveries, it’s a vital aspect of achieving great customer service. In fact, a survey from Software Advice revealed 67% of consumers would not do business with a company again if it’s just one hour late.

Fortunately, with fleet management software, a driver’s journey can be planned before they take off, allowing them to take the fastest and most efficient route. It also means they’re less likely to become lost. Along with route planning, GPS tracking software can also help you and your drivers make real-time adjustments to avoid things like traffic jams and bad weather that would slow down the delivery time.

By adopting a telematics solution, you also help lower your cost of ownership, such as reduce fuel costs with more efficient usage. In turn, this can lead to an increased profit margin that provides more capital to invest back into customer service resources to create a top-tier customer experience.

The Bottom Line

Customer service isn’t just nice to have; it is a business necessity. It allows you to expand your customer base, improve your company’s reputation, and increase your bottom line. To achieve this, carriers can use telematics to make data-driven decisions that improve fleet performance, a requirement to increasing overall customer satisfaction.

To find out more about how fleet management software can help your carrier fleet streamline operations and increase customer satisfaction, request our Fleet Complete demo.

Date published.   Apr 06, 2021  |  Author: Marketing FC