One of the biggest challenges in omnichannel retailing, and for any other industry where selling and delivering occurs through multiple channels, is measuring customer satisfaction. Customers have expectations based upon the company’s brand and they expect it to be consistent across all of the company’s delivery channels. Too often, companies measure customer service performance using internally focused supply chain metrics that mean little to the customer. If you offer omnichannel choices to your customers, this makes understanding the impact that the supply chain has on customer performance harder to grasp, because customers often don’t rate the buying and delivery experiences separately, but rather as a bundled experience. Leading companies are trying to simplify the issue by analyzing their supply chain performance based upon what the customer really says.
The following are two examples of retailers using customer-focused metrics.
The first retailer is considered a leader in omnichannel retailing with a good mix of online and in-store sales. They use just about every customer delivery channel possible: stores; click and collect; home delivery; and drop-shipping. They also use Net Promoter Score (NPS) to measure overall customer satisfaction and as a critical supply chain metric.
Recent customer analysis conducted by the retailer showed that they had better NPS results from customers who only shopped in single channels rather than across channels. As you can guess, this was quite alarming because they were fully committed to an omnichannel strategy. When they dug deeper into the issue, they found that delivery performance was inconsistent across all delivery channels and not in line with customers’ expectations of their high service brand. This doesn’t mean that customers were expecting the same performance (e.g., next-day delivery) across all of the channels, but rather that the customer experience was not uniform (e.g., delivery visibility and in-home service quality differed for similar products delivered through different channels).
The second retailer is enhancing its omnichannel strategy through more advanced home delivery capabilities, and was struggling with assessing its performance. Their traditional “all-day window” had a higher on-time delivery rating than the newly introduced 2- and 4-hour delivery windows. The retailer’s immediate thought was that they needed to focus on improving their on-time performance before moving forward. However, when they asked customers for feedback on delivery performance, their customer-focused metrics showed that the scores were higher for tighter time windows even though they weren’t as well executed as the all-day window. In the customer’s mind, they were happier sacrificing a little reliability to not have to wait at home all day for a delivery.
As you can see, it’s pretty easy to get caught up with traditional internally focused metrics and not understand what really matters to the customer. We can find ourselves wasting time on things that are insignificant to the customer or completely miss what is significant. This is why I am a big believer in the concept of the Customer Facing Supply Chain and what it takes to create one. These lessons apply to more than just the retail industry. How is your company using customer-focused metrics as part of your supply chain strategy? Let me know.