Product Fulfillment Problems and Solutions
By Barry Blumenfield
To most people, order fulfillment may appear to be a fairly straightforward process—take an order and ship out the product. But it actually is quite complex. Consistently fulfilling customers' expectations requires a seamless integration of the product development and production, creative and promotional efforts, telemarketing scripts, order processing, customer service and shipping.
For many mail-order businesses today, these tasks are handled by a combination of separate in-house departments and third-party suppliers. It is therefore exceedingly difficult to orchestrate a seamless integration of all involved parties.
We decided to take a look at the common fulfillment problems encountered by mail-order companies and the solutions that were implemented to solve them. We found that in nearly every case, most problems would have been caught sooner or completely avoided with better communication throughout the fulfillment team. However, since problems will inevitably occur, we recommend that businesses follow three steps to deal with them:
>Establish procedures to identify possible problems before they occur.
>Once you learn of a problem, find and correct any damage done with an emphasis on customer retention.
>After fixing the problem, take the necessary steps to avoid future occurrences.
Step #1: Identify Problems Before They Occur
This obviously is difficult to implement without a crystal ball, but it's a critical step in every project and should always be considered when launching a new offer or promotion.
Keep a checklist of all possible departments that could be impacted by fulfillment problems, and make sure that all have been adequately notified and given an opportunity to provide feedback. Typically, marketing decisions are made by marketing people, approved by financial people and implemented by creative people. However, the list should also include:
>Data Processing/IT: Can your system handle the project or are modifications required? Will the Web site support this offer?
>Telemarketing/Customer Service: Is the scripting in place? Have there been any recent suggestions for improvements to the order-taking process? Do the operators understand the offer?
>Shipping, Receiving and Returns Processing: Will these departments be impacted or need to do anything out of the ordinary to handle orders of these products?
Share as much information as possible with all parties. Too often, a company is so concerned about confidentiality that management doesn't share necessary information until it's too late. If you do not trust an individual or supplier to maintain confidentiality, perhaps they are not right for the job.
Example: Here's what I mean by good communication. The catalog company sends proofs of each catalog to the head of every department and/or vendor for proofreading. Telemarketing may suggest that the source code be relocated to help customers find it during the call. Shipping may see that there is a premium that will require special packaging that must be ordered. IT might notice that the premium offer is different from the last catalog and that the system must be modified. And everyone has a chance to check for typos.
Establish strict rules and proto-cols for communications between departments and/or vendors. Whenever possible, all communications should be in writing. The recipient should always confirm receipt of instructions. Verbal instructions should be confirmed in writing.
Constantly test your fulfillment process. Place orders frequently via telephone, mail and your Web site. Make payments by check and credit card. Call customer service with various complaints. Return orders and see how long it takes to get a refund or exchange. And repeat the same process with your competitors so you can learn how they operate.
Step #2: When you Learn of a Problem, Save the Customer
If customers have been adversely impacted by a fulfillment problem, contact them immediately. Explain what has happened and how you plan to fix it. Offer some sort of compensation such as a credit for their next order, free gift, upgraded shipping method, etc. When properly handled, we've found that a resolved problem actually can result in an increase in sales and retention.
Example: A common problem is that due to a mixup somewhere in the fulfillment process, the wrong product is shipped to customers. Some customers may be willing to keep the wrong item plus receive the new item (and pay for it)—especially if you offer even a token incentive, such as $5 off their next order or waiving the shipping and handling that had been paid for the incorrect "extra item" they received. Even if they don't accept your incentive offer, they will recognize that you're an honorable business that treats its customers with consideration.
Next, make sure that information about the problem is communicated to all parties inside your company and to vendors that may be involved. Add comments to customer records for customer service operators. Notify the inbound order takers of products that are different from the offer. Instruct the returns department that certain items should be exchanged for a different item rather than reshipped.
Example: A collectibles company received merchandise from an outside manufacturer and failed to properly inspect the shipment. One of the items was mislabeled by the manufacturer as the wrong SKU. Customer service learned of the problem from consumer complaints, contacted all of the buyers affected and notified them that the correct item was being shipped. The warehouse was instructed to re-label all remaining inventory. But nobody told the returns department. As the wrong items came back, the returns were given to the warehouse, restocked based on the wrong labels and shipped out once again.
Step #3: Don't Let Problems Repeat Themselves
Once a problem has been corrected, the next step is to create a plan of action to make sure it's not repeated. Don't just focus on how the problem occurred: Think about what could have been done to prevent it or to have caught it sooner.
Examples: You might want to require more people to sign off on new advertisements. Perhaps you need to hire a proofreader. Make a specific person responsible for monitoring the area where the problem occurred. Designate a substitute for the person who was responsible but was on vacation that day. Modify the computer systems as needed. Create a new report. Have a meeting with the entire fulfillment team, and ask each to submit a list of recommendations.
Finally, try to figure out what you might have missed (return to Step #1). We've found that customers will usually forgive you for an error if it is handled quickly and with concern for their expectations. But if you make the same mistake a second time, they won't come back.
Barry Blumenfield is CEO of BMI Fulfillment Services in Norwalk, CT. Reach him at (203) 663-6012 or by e-mail at email@example.com.