How many times have you sent out a customer’s package and stayed eager to know their feedback, only to learn from them that it was damaged or didn’t make it to them at all?
Truly a haunting experience, given that all your efforts to convert the customer have now taken heavy ‘damage’, thanks to no fault of yours.
But if you think about the scale of these issues, you can clearly see that it is not something trivial. In fact, 7% to 11% of customers’ online orders arrive broken or damaged and close to 50% of Americans had claimed that at least one of their packages was lost.
Not just the scale. Even the intensity of lost and damaged packages is high for e-commerce merchants such as yourself. Let’s take a look at the consequences to better understand the issues at stake.
Problems a Retailer Faces Due to Damaged and Lost Packages
To understand the seriousness of packages getting lost and damaged, put yourself in the shoes of your customers. They’ve anticipated long enough to collect their order, only to discover that it’s arrived broken or is missing.
While this is frustrating enough, the situation can turn out to be worse if their purchase is a gift for their loved ones. Such instances can instantly escalate things and infuriate your customers, who might make hasty decisions that can prove to be costly for you.
The first action a frustrated customer would take in such situations is simply choosing to quit shopping with you, as a result of the bad experience they faced. This in turn can lead to unnecessary costs for your business in the form of:
- Low customer retention rate (CRR) – Your retention rate is a metric that shows whether your customers are happy doing business with you, to the extent of staying as your customer for an extended period. A good retention rate means to profit from repeat shopping, while a low rate is a harsh truth of you losing money to customer churn.
- Low customer lifetime value (CLV) – An extension of the retention rate is the customer lifetime value. It is the total amount of money a customer is expected to spend with you during the span of your relationship. When package delivery issues lead to customers dropping out, your CLV can become low or negative, implying that you are spending more on a customer than what you’re getting back from them.
- Increased damage to brand reputation – A customer who has decided to end ties with you might not always go unannounced. In most cases, they take their frustrations to social media and tarnish your brand’s online reputation, leading their friends and followers (who can be your potential customers) to avoid your business. On a related note, there are definitive ways to deal with such customer rants, that you can follow to mitigate their angst as well as paint a positive picture for others.
- Increased costs from order returns and cancellations – When a customer’s order is lost or damaged, it is absolutely fair that they expect you to refund them. But such returns and cancellations which happen due to no fault of yours can lead to severe costs that can lower your profit margin.
- Increased acquisition costs (CAC) – The last nail in this coffin is your pining over your efforts to convert the customer after they’ve simply dropped off. While you may briefly consider simply replacing one customer with another, keep in mind that acquiring customers is more expensive than retaining a customer.
It is natural to think why do you have to stand to lose so much, especially when such issues happen outside your control and cannot be directly linked to you. Know that each purchase made by your customer is for your brand and not for your shipping partner, who works in the background. This makes the onus on taking care of their deliveries, which plays a vital part in the overall customer experience, on you. Thus, you are inclined to take actions that can avoid all of the aforementioned problems.
5 Things to Do If a Package Gets Damaged or Lost
You don’t have to panic the instant the customer comes forward with a complaint of their package being broken, missing, or lost in transit. There are several approaches that you can take to mitigate their frustrations and attempt to change their bad delivery experience into a positive one.
1. Have an empathetic approach
As we mentioned before, these customers who may sound angry have been robbed of the opportunity to get delighted while opening their package. So, it is understandable that they are frustrated and want you, the retailer, to handle the situation before it gets worse.
In such cases, the first step is to always deal with the situation empathetically. Acknowledge the incident and apologize for it (despite there being no fault of yours).
Trust me, they don’t enjoy seeing you pointing your hands at the shipping carrier for delivery issues of any kind. Take ownership of the incident and assure them that things will be resolved at the earliest.
Personalize your conversations in such a way that your customers know that they’re being treated as important and not just as a random, faceless customer.
2. Ask the customer how would they like to get the issue resolved
Assuming what the customer wants might not be the best plan of action at all times. Especially, when the customers expect you to actively listen to their concerns.
In such cases, it is best to resolve the issue based on your customers’ requirements. Don’t hesitate to ask your customer how they would like you to rectify things.
Some customers who have still not been able to come out of the bad experience might settle for a refund on their purchase while customers who badly want the product so much, would like to replace their order.
The best ploy is to provide multiple options and let your customers choose what’s best for them. This way, your customers feel in control of their decisions and gain increased confidence while shopping with you.
3. Send out replacement packages via expedited shipping
A customer who is initiating a replacement for their damaged or lost product is someone who is giving a second chance to set things right. Thus, If a customer wants a replacement instead of a return — make sure you put maximum effort to convert their angst into delight.
You can do the same by offering free return on the damaged product and sending out a replacement via an expedited shipping option out of your own pockets.
This way you have a great opportunity to reverse the bad delivery experience and set customers on the path toward satisfaction.
4. Recover costs via shipping insurance and refunds
Focus on improving your customers’ delivery experience and leaving out the costs associated with them. Don’t worry about these out-of-pocket costs each time when there’s a delivery issue, there are ways for you to start saving on them.
One way is to insure your packages, especially the high-value ones with your shipping carriers or a third-party service provider to recover any unfortunate losses on a parcel that you shipped. To get the best out of shipping insurance, you need to get your hands dirty with all the relevant information such as product qualification, documentation required, rate comparison, etc.
The other way is to start claiming shipping refunds from your carriers for each delivery failure on their behalf. If you’ve not waived your rights to claim refunds, know that not only delays, lost and damaged packages but there are over 50 carrier errors that might be entitled to refunds.
Also, manually filing claims can be a tiresome task. Instead, you can make use of an automated parcel audit solution that takes care of auditing your shipping invoices and filing claims while saving you time, effort, and most importantly money.
BONUS: The damage is done but is the package really lost?
Damages to the package are visible. Either on the cover or on the inside, making it clear of an incident. But the case isn’t the same with lost packages.
There are instances where packages that turn up after being rerouted somewhere or the issue at hand might be due to either a wrong address or a weather-related one. Quite simply, it is not unheard of for a package to turn up a day or two late.
With customer disappointment inevitable in either case, there is a remote chance that their frustrations can be mitigated when the delivery arrives a couple of days late rather than getting lost. In such cases, you need to take a different approach and treat the incident as a late delivery.
There can also be instances where the package goes missing after getting delivered. In such cases, the issue needs to be treated as a stolen package incident.
Following these steps can definitely help you take control of the situation and handle it all. However, all of these are effective only when the issues have occurred. By the time then, it becomes a bit late to work on your CX efforts, given that your customers are now frustrated.
But what if there was a way to resolve such issues even before they’ve impacted the customer?
This is where you start taking a proactive approach to things rather than being reactive to not just lost and damaged packages but all the delivery issues.
Employ Proactive Techniques in Your ‘damage Control’ Measures with Lateshipment.com
With a post-purchase automation platform like LateShipment.com, you can track parcels in real-time and gain the ability to proactively step in to resolve issues when things seem like going wrong.
For example, with a complete view of your parcels in transit, you can:
- Stay aware of packages that are damaged at the loading or sorting facility (when it is about to be sent out for delivery).
- Set up alerts for specific parcels that seem to be facing an issue like lagging behind schedule or getting misrouted from the intended destination.
Once you have gained these insights, you can instantly get in touch with the carrier to resolve the issue or send a quick replacement in case of a time-sensitive delivery.
Even if you’re unable to resolve the issue completely, communicating the issue to your customer (and not the other way around) via automated and personalized notifications, helps in mitigating their anxiety, gives them the confidence that you’d resolve the issue, and ultimately revives customers’ trust in your brand.
Not just providing a great delivery experience, LateShipment.com also helps you go all out with our post-purchase excellence cloud. Provide stellar delivery experiences with easy, seamless returns – all while significantly reducing your shipping spend by auditing your invoices and recovering eligible refunds for late deliveries, lost and damaged packages, and much more from your carriers.
That’s all from us for now. It is time to grow your fanbase, savings, and business with LateShipment.com.
