How Reverse Logistics Can Increase Customer Satisfaction

The term ‘reverse logistics’ has been in e-Commerce for a while. Reverse logistics refers to the process by which goods are moved to a particular area from their final destination in the sales cycle for maximum value.

In the digitized business environment, sophisticated purchase mechanisms dominate the e-Commerce world. The systems for the exchange and return of goods have been upgraded in recent years, ensuring maximum satisfaction for users. Reverse logistics strategies include restocking, managing damaged merchandise and seasonal inventory, recycling products, asset recovery, and other measures.

A source reveals that buyers in the US return holiday gifts worth $13.2 billion to retailers. This accounts for around one-third of the country’s reserve logistics market, which has an estimated value of $36 billion. Have you ever thought about what companies do with those products? Efficient management of reverse logistics ensures that companies will optimize the functional values of these products through various techniques to satisfy their customers.

Here are five ways you can leverage your customer satisfaction level through reverse logistics strategies.

Meeting customer expectations

Every business firm strives to live up to the expectations of its customers. Customers look out for personalized services, and want to make companies understand their preferences. With the rise in competition, customer satisfaction forms the core of a company’s marketing strategy.

A number of shipping firms who employ an external logistics provider incorporate effective reverse logistics management strategies to set themselves apart from their competitors. Their end goal is to keep customers happy with their products and services. During the delivery and post-delivery phases of marketing, they strive to maintain customer loyalty. They repurchase products and services over and over in order to meet the expectations of their customers.

A company can view customer satisfaction from two different perspectives. These are cumulative and event-centric. In event-centric customer satisfaction, analysis is done on the purchase of a particular product. In the former, the total customer experience with the brand is taken into account. It also includes buyers’ post-purchase experience.

Reducing overall costs

Successful implementation of reverse logistics mechanisms can reduce a company’s overall expenditures. For companies that have products that can be remanufactured or recycled, reverse logistics is highly prioritized. For instance, in the US motor vehicle industry, 70-90% of the goods that are sold in the aftermarket are remanufactured. In 2011, the remanufactured parts market stood at $43 billion.

It is important to get parts from a repair shop to a remanufacturer, ensuring that they can be resold. The incorporation of seamless reverse logistics techniques can reduce overall costs, contributing to company productivity.

Returning certain products for remanufacturing is a part of the marketing and production loop. Companies carry out a diverse range of practices for intelligent logistics management. Take the instance of the Memphis Distribution Centre, in the US. The warehouse has got a dedicated mechanism for managing reverse logistics. The company processes around 80,000 core parts in 400 trailers every month. This is one of the best examples of utilizing the product in the best possible manner, by recycling, to reduce costs.

Maximizing the returns on assets

In order to make greater profits, businesses often make small improvements in asset depreciation. Even if the company is unable to sell the product at the original cost, a large portion of that cost is recovered in this process. If customers keep an eye out for discounted products, these goods would meet their needs.

A reverse logistics management strategy often brings large opportunities to businesses. Over the years, many channels have been developed to dispose of goods that have been returned by customers. This creates a favourable impact on the profit-maximization process. At the same time, companies are able to cater to low-budget customers with these products. The electronic and automobile sectors often dispose of products at prices as high as 80% off of the retail value, even after the goods have been returned.

Logistics

Increasing productivity

Incorporating reverse logistics strategies can increase a firm’s productivity to a substantial degree. Consider the reduced transportation costs, increased production speed, lower administrative costs, and reduced costs for repair and replacement when you calculate your productivity. You can channel greater resources and efforts to optimizing customer satisfaction. You can provide your customers with swift services with a reduced cycle time.

Presently, around 60% of businesses are not satisfied with the existing reverse logistics techniques on their platforms. A lot of innovation and effort needs to be put into marketing strategy, and a lack of upgraded reverse logistics prevents a company from providing the desired standards of customer support to its clients.

Having agile adaptability and inventory management

Adaptability refers to an organization’s ability to respond to alterations in the demands of its customers. Integrating an intelligent reverse logistics mechanism enables companies to devise flexible approaches to customers.

After assessing customers’ needs, companies can manage their inventory more productively. They can also eliminate the chances of lost shipments or slow delivery of products. This will reduce the rates of shipment inconsistencies, improving profit margins for the company. Customers, too, will remain satisfied with these agile return and replacement strategies. The customer’s inventory carrying costs will come down with an effective reverse logistics policy.

A large section of e-Commerce companies acknowledge that efficient storage and redistribution of products streamlines their supply chain. A study reveals that personal computer returns amount to $1.5 billion a year, while the consumer electronics industry has to deal with $10 billion of returned merchandise annually.

Efficient management of reverse logistics enhances customer satisfaction to a substantial degree. With the increasing need to prioritize customer satisfaction in the digitized business platform, every business needs to come up with an intelligent reverse logistics strategy.

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