Last Mile Delivery Optimization
Last Mile Customer Experience: It is no longer about reaching destinations, it is about reaching people
Jun 29, 2020
11 mins read
Globally, 71% of customers lose their trust forever in brands that place profits before people. – Edelman Trust Barometer report, March 2020, Special Report: Brand Trust and the Coronavirus Pandemic.
What would you choose if you had to choose between making more profits or making your customers happy?
The above question is not difficult, but it still makes you think. A decade ago, profits would have been the clear answer but that has changed. Businesses can give up neither profit nor customer experience; the truth is they need both.
Does this mean that businesses today no longer care about making money? No! But their approach towards making profit has changed. The boom of online shopping, new digital platforms and social media have improved global connectivity and strengthened customers’ voices. A small voice of dissent from customers on a brand can hamper the earnings of a business.
A strong customer voice has created a renewed focus towards customer experience. When customers are happy, they start trusting the business and do not hesitate to spend more. The more a customer spends, the more businesses profit.
Last-mile problem and customer experience
The approach of businesses prioritizing customer experience is a healthy one. It is, however, easier said than done in last-mile delivery, compared to other businesses. This is because of the last-mile problem.
Customers want their deliveries fast and free. Contributing to 53% of total shipping cost, final mile delivery is the most expensive and time-consuming delivery process. The issue of managing express delivery demands of customers in the midst of rising last-mile costs is called the last-mile problem.
Businesses find it difficult to deliver their goods efficiently and keep their customers happy at the same time. Even the smallest of inefficiencies can drive up last-mile delivery costs and reduce their earnings, making it challenging to provide an excellent customer experience.
Minimizing the last-mile inefficiencies improves speed of deliveries made to customers, thereby making them happy. Providing an exceptional customer experience determines who wins customers in the last-mile delivery.
What is last-mile customer experience?
Last-mile customer experience is the perception of consumers on their interaction with brands throughout the delivery process. Customer experience is the holistic perception of customers on their interaction with brands. It covers all forms of interactions that customers had with businesses, right from browsing a website to purchasing a product.
In the years 2020 and 2021, brick-and-mortar stores were either entirely shut or functioned with limited foot traffic. The coronavirus pandemic restrictions forced customers to order essentials and non-essentials from their homes. This sudden rise in online shopping has led customers to significantly factor delivery experiences when they purchase a product online.
What is the perfect last-mile delivery experience?
In a room of ten enterprise business decision-makers, if we ask who wants to give a perfect last-mile delivery experience, all of them would raise their hands.
A well-executed and seamless last-mile delivery create a strong and lasting impression on customers. Apart from receiving goods, customers start believing that the business values, appreciates, and respects them and their time. There are three crucial elements that define whether a business offers a perfect last-mile customer delivery experience.
Choice of delivery: When will delivery happen?
Not only are customers informed about their delivery but they also get to choose their delivery time window. This independence gives customers a sense of control. The sense of control makes them feel that the business values them.
Real-time visibility of delivery: What is the ongoing progress of the delivery?
Customers are informed via notifications on the updated delivery status. This gives a sense of security to your customers and a message that they need not worry about their orders.
Speed of delivery: Will the delivery reach customers on or before their preferred time window?
Delivering products on-time as promised to customers gives them a sense that the business values their time and preference.
Why do businesses fail in providing a positive last-mile customer experience?
Amazon, Zappos and Dominos, all have one thing in common: a great last-mile experience. For many years, price and quality of products and services were the prime differentiators of a brand. Now, the most valued quality for any company is the customer experience it provides in the last-mile delivery. Last-mile experience has turned out to be the most crucial brand differentiator today. Learn about the last-mile delivery challenges that businesses face while providing a positive final-mile experience.
High operating costs
While providing an exceptional customer delivery experience adds a huge competitive advantage, it is also difficult to carry out without hiking up operating costs.
Last-mile delivery costs increase as businesses provide same-day delivery and next-day delivery options to their customers. Freight businesses operate under a low profit margin. A small mistake or some inconsistencies in the final mile, like customers not being at home during deliveries, drive operating costs considerably. Increased operating costs make it further difficult for businesses to provide a delightful last-mile customer experience consistently.
High traffic restrictions, inability to plan accurate Expected Time of Arrival (ETA), inadequate route planning, reduced last-mile efficiency, and outdated technology are some of the reasons for delivery delays.
Regular delivery delays make customers frustrated and they start feeling that the business does not value them. Frustrated customers respond negatively to communications from business and exit their offerings. Their negative feedback can hamper the brand‘s reputation severely.
Lack of communication with customers
Whether you are a business delivering food, dropping off rental equipment or doing on-demand grocery delivery, customers want to be informed about their order status on a timely-basis. Inability of businesses to keep customers in the loop leads to failed delivery attempts.
One of the big reasons for businesses with a growing number of dissatisfied customers in the last-mile is lack of timely notifications. Better communication on delivery delays and feedback helps them win dissatisfied customers back.
Inability to maintain a smooth return process
Modern customers expect a free and fast return process for their online purchases. They have started to weigh in the returns policy of a product before making an e-commerce buying decision.
A business that has a no-return policy should send in a new package to compensate the complaining customers. The expenses incurred from reverse logistics processes like replacements result in overhead and resource wastage.
6 Ways last-mile delivery software helps enterprise businesses improve their customer experience
In a war, to acquire and retain customers, enterprise businesses are pushed to meet elevated customer expectations while operating cost effectively. The burden of managing customer experience and last-mile delivery costs have led them to invest in final mile delivery software to redefine their customer relationship. Find out the six ways last-mile delivery software helps enterprise businesses improve their last-mile experience.
Handles ad-hoc deliveries effectively
Traditional route planning provides shortest routes based on the distance. It guarantees the shortest route but not the fastest or most efficient route as it could lead drivers to roads with high traffic congestion.
Customer requirements change at any time and they might want an immediate delivery on high-priority. Fulfilling these ad-hoc delivery requests becomes difficult when businesses incorporate traditional route planning.
In times of ad-hoc delivery requests, last-mile delivery software helps fleet managers to spot a driver nearest to the customer who needs immediate delivery. It dynamically reroutes deliveries and provides optimal routes after accounting for the immediate delivery requests. Its dynamic rerouting ability helps businesses fulfill their high-priority orders and make customers happy.
Plans optimal routes accurately
Manual route planning cannot guarantee efficient and accurate delivery routes. It results in drivers being stuck in an area causing a waste of productivity, resources and time.
While planning routes, last-mile software factors real-world constraints such as
- Time windows
- Depot locations
- Vehicle type
- Order volumes
- Fuel consumption
- Cost per delivery
- Capacity constraints
- Travel time
- Driver schedules
- Hours of Service
- Traffic congestion
- Waiting time
- Delivery windows
- Order priority
After factoring the above real-world constraints, the last-mile solution uses its machine learning algorithms to generate the optimized routes accurately. It enables fleet managers to smartly assign deliveries in a way that minimizes distance, reduces travel time and improves delivery speed. Its efficient routes maximize on-time deliveries, thereby making customers happy and encouraging them to do more business with you.
Offers real-time delivery visibility
The best way to reduce the risk of a poor customer experience is by offering a real-time visibility of the delivery status. Clear communication can lead to a lasting customer relationship.
With its location-based fleet tracking, last-mile delivery software sends timely notifications to customers on the status of their orders. Its predictive alert frameworks provide alerts to fleet managers when there is an unexpected geofence and Service Line Agreement (SLA) breach. It enables them to proactively notify customers on the breaches, thereby improving transparency and communication when there are unexpected delivery delays.
Improves flexibility of deliveries
The delivery expectations of every customer varies and that is why businesses should provide them with customizable and flexible delivery options. Modern customers want to change their delivery preferences as they might not be available at a certain time or delivery location. Flexibility plays a major component in providing an exceptional last-mile service.
Last-mile delivery software enables customers to change their delivery location or time by contacting delivery staff through chat or call. It allows customers to give better instructions on the rescheduled time and new delivery location. By offering customers the option to change their delivery preferences, businesses receive great feedback and gain more trust.
Makes reverse logistics convenient
Simple and seamless returns process increases the likelihood of a customer to become loyal to a brand. Customers returning items is costly and time-consuming for all companies, but the speed at which they handle reverse logistics processes vary. Executing the return process quickly helps customers get what they are looking for and restores their trust in the brand.
Businesses are exploring new ways to streamline their return management process without causing any inconvenience to their customers. One among many ways they counter inconvenience in reverse logistics is by investing in a last-mile delivery software.
Last-mile solution factors real-world order-vehicle constraints, business and rider considerations to come up with an efficient reverse logistics plan. It enables businesses to manage returns and deliveries simultaneously using existing on-ground resources, thereby providing a seamless returns experience without driving up costs.
Generates delivery metrics
As a business, you cannot make customers happy without knowing where they went dissatisfied. Data on final mile delivery helps you know where you lack in providing an exceptional customer experience. Traditional route planning cannot assist you in making data-driven decisions for improving last-mile customer experience.
A final-mile delivery software analytics and reporting feature that provides information on past delivery performance.
Some delivery metrics that impact last-mile customer experience
- Actual versus planned routes
- Actual versus planned distance
- Actual versus planned time
- Planned and actual stops per day
- Routes per day
- Empty miles driven
- Time on site
- Average service time
- Fuel consumption rate
- Total mileage
- Time of delivery
- On-Time In-Full (OTIF)
- Cost per mile, per item, per vehicle
- Hours in motion
- Complaint details
- Damage claims
- Utilized vehicle capacity versus available capacity
- Unnecessary stoppages etc
You can use this data generated from the last-mile delivery software to provide feedback on delivery operations. Using the feedback drawn from the final mile delivery solution, you build a tight operational process that results in improving customer experience.
Providing an exceptional and positive last-mile customer experience is not a one-time feat. It demands meticulous final-mile delivery planning with end-to-end communication, seamless returns management and excellent customer service. Last-mile delivery software is the go-to-tech-tool for businesses to build and maintain a positive last-mile customer experience.
Locus’ last-mile delivery software accompanies businesses to build and manage a lasting customer experience without exponentially driving operational costs. Its enhanced visibility helps you provide exceptional and comprehensive delivery experience for end customers by using your resources efficiently. It automates and digitalizes last-mile services that help you make smart decisions to ensure customer satisfaction.
Meet your evolving last-mile customer expectations with an efficient delivery process.
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ABOUT THE AUTHOR
Lakshmi Narashimman is one of the senior writers at Locus. He is a voracious reader and a passionate writer who loves making complex aspects sound simple.Read other blogs by this author
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Last Mile Customer Experience: It is no longer about reaching destinations, it is about reaching people