Thursday August 14, 2014

Lemons to Lemonade- UPS Edition

picture of a box that says free shipping on it.

The shipping industry is getting disrupted hardcore, led by the likes of Zappos and Amazon with their outrageous and much-loved free shipping policies. Amazon, in particular, has ground down it's shipping vendors to outlandish pricing and terms. 

As a consumer, I love it. Via Amazon Prime, I can get virtually anything I can think of tomorrow for $3.99 shipping. A couple years ago it was outrageous and awe-inspiring. Now I just expect it. 

For businesses though, it's creating quite a ruckus. Amazon has a huge [and growing] advantage over run of the mill retail operations. They're also having an impact on retail shipping businesses like UPS Stores, Postal Connections, The Shipping Annex, etc. 

Up until the last few years, if I bought something off a website and wanted to return it, I had to pony up for the return shipping- maybe as much as $8 or $10. Online returns and exchanges were a great additional source of new income for these little shipping stores. 

Now the online retailers cover the cost and simply provide the consumer with a pre-paid voucher. And as I understand it, simply pay the shipping store a $1 or $1.50 handling fee. And the volume of these kinds of drop-offs has increased by an order of magnitude. 

Some of these shipping retailers are pissed. Case in point: 

I bought my wife a HydroFlask water bottle recently- and picked the wrong color (of course). In my excitement, I threw away all the packing materials that Amazon shipped with it to keep it from bouncing around. 

I processed an exchange with Amazon, printed off the prepaid label and took everything down to my local shipping store. The box was open, needed to be taped and the label attached on top. 

When I walked up to the counter, I said, "I just need to ship off this pre-paid package". The guy kinda looked at me dismissively and said, " okay, well, it needs to be taped up and the label put on the box, and you're going to need some packing material so this doesn't bounce around". 

I waited for a second, not fully understanding his point- Isn't that part of what they're paid a handling fee for- the 15 seconds it takes to tape the lid, the 4 cents worth of tape needed to apply the label, and 2 cents worth of packaging peanuts? 

But he just looked at me blankly. So I kind of blurted out, "So do I need to pay you to do that?" My agitation wasn't lost him. He replied that it would be "Umm, $5". 

And, blah blah blah- he taped, packaged, labeled, and I walked out 90 seconds later, certain I'm now going to drive an extra 8 blocks next time to the other shipping store. 

Things change no matter what industry we're in, and we have one choice- embrace it, find a angle we can exploit to make the most of it, or we can bitch, moan and treat our customers with begrudging annoyance. 

Let's analyze my example above- 

If I'd come in and paid retail to send that water bottle back to Amazon, I'd have chosen the cheapest method- probably $6? And let's just say I took 1 minute at home to tape the lid and shove some newspaper inside to cushion it. What kind of margin do you think he would have made on the deal? If I had to guess, no more than $2. Probably less. 

The way it actually went down, how much did he make? The $1.50 for handling, and then $5 for packing things for me. he probably cleared 4+ bucks even if you factor his time on top of the materials. 

What the hell is there to be upset about? I mean, I get it. UPS and Fedex changed the rules. At first blush, they've eliminated much of the retail shipping transactions. But obviously if you stop there, you miss the opportunity in it. 

If this guy had right thinking, he intentionally promote the convenience layer they provide- "just throw your Amazon stuff in the box and we'll take care of the rest for cheap". I don't mind paying 4 or 5 bucks for convenience. 

Furthermore, what if that shipping store created an annual shipping club where the packaging materials and package prep was free and unlimited for an annual membership fee of $15? "Just drop your Amazon/Zappos/Best Buy/etc stuff and go!"

My guess is they'd have a new profit center for their business.

The whole "Make lemonade from your lemons" concept never ceases to offer transformation. There's an opportunity in every challenge.  

Chris Nordyke is an integrated marketer and strategy consultant. He works with owners and senior business leaders to transform and grow service companies via a unique holistic approach that drives referral business and client retention. Click here to schedule a complimentary consult with Chris.


Wednesday June 4, 2014

The Question That Will Close More Sales

I've been selling or leading sales teams for the last 12 or so years and without exception, sales are made or lost during discovery. 

picture of sherlock holmes statue

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Tuesday June 3, 2014

Micro-Impressions and The Home Remodeler

If a business goes to the extra effort and expense to show courtesy to those they aren't even doing business with, what does that tell me about what it's like to be there customer? 

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Tuesday May 20, 2014

Natural Grocers and Missed Opportunity

Natural Grocers (NG) opened a store near my home recently. They're kind of like a mini Whole Foods minus the high ceilings, hot deli and sushi bar. 

They had a pretty interesting launch strategy. Every couple weeks they sent out a large, bold postcard that could be redeemed for a *free* product. One time it was a 16oz bottle of Bronner's Hemp Soap, another week it was a lb of organic, grass-fed beef. Every time it was something of at least $8 or $10 in value. And I redeemed almost every one. 

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Tuesday April 1, 2014

Micro Disappointments and Starbucks

starbucks logo with mickey mouseI've had a couple experiences in the last few weeks that reflect an important, but subtle difference between the experience Starbucks offers, and that of a local coffee shop I've always frequented.



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Tuesday March 11, 2014

5 Questions for the "Local" Retailer

It used to be that the big box stores and online vendors purely offered superior price and convenience. The service was abysmal. A huge trade-off for many people.  

But that was 5 or 10 years ago. 

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Monday March 10, 2014

The $5 Discount "Gift"

I've gotten this exact same post card for the last probably 3 years running. So has my wife Cara. This small-town Chiropractor isn't alone though, I see this kind of "gift-giving" all the time, across all service and retail businesses. 

So I figure it's worth taking a few minutes and breaking this particular card down as a case study. I'll be excited to see your comments and insights below. 

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Thursday February 27, 2014

Sky High

Apologizing well is a key behavior for brand-builders to develop in their organization. When it comes to branding and marketing, it's no longer good enough to simply lure people through the door, brand-builders have to tightly manage the experience, clear through to fulfulliment and followup. 

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Tuesday February 25, 2014

Stoned Kale

A quick case study for you today: 

Stoned Kale

I met a colleague last week at a restaurant I love. One of those casual, but healthy dining concepts. He asked for a menu suggestion, so I recommended my favorite dish- one with lots of veggies, kale and local meat. 

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Monday February 17, 2014

Customer Experience No Longer Requires Entry-Level People

Great customer experience (CX) is a human event.

Great CX is rehearsed by people placing themselves in the same process or event and asking the question, "What do I feel, want, need, appreciate when I'm on the other side of the desk/phone? 

How do I create something special that I would appreciate?

Most companies though, settle for a more scripted, manageable approach.

The justifying self-talk that runs through manager's minds:"We have entry-level roles. It's too much to expect everyone to think on that level."

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