Measure Your Total Cost of Shipping for a Better Bottom Line
Your customers demand that their packages arrive on time (preferably early) and unscathed. But how are you measuring those results? Whether your company is large or small, understanding your performance can help you set benchmarks and ultimately improve your bottom line.
When was the last time you took a close look at your transit reports?
At OSM, we work closely with you to understand which metrics are most meaningful to your business. Once we start assessing transit reports, call center volumes, and other aspects, we can propose changes that can improve your results.
While there are dozens of potential metrics, those that help assess your total cost of shipping tend to be the most valuable, including:
On-time delivery – What percentage of your packages arrive when promised? The industry shift to 2-day shipping makes on-time delivery one of the most important metrics you can track and can become a strong differentiator for your business. At OSM, our Premium Network delivers a day faster than the national average, and 98% of our deliveries arrive within 1 to 5 days.
Reship rates – How many packages don’t arrive in time and must be re-shipped? Simply calculate the ratio of reships to total shipments to determine this rate. Decreasing your reship rate can pay off dramatically.
Customer service call volumes – When packages don’t arrive on time, customers tend to call, requiring more customer service representatives. We can help reduce customer service calls by up to 40%, enabling you to operate with a leaner staff.
Damage and accuracy claims – If packages arrive damaged or with incorrect items, you’ll entail both the costs of customer service and reshipping to make it right.
Choosing the most important metrics
Every business is different. That’s why you should think through the most relevant KPIs for your unique business. Rather than tracking dozens of minor, less important metrics, work with your shipping partner to determine 3 to 5 metrics that matter most. Focusing on these can help you:
Better understand how well your business is really performing. Narrowing your focus gives you a set of benchmarks to easily track from month to month to understand trends – and take proactive measures as needed.
Identify and resolve weak points in your process. If you notice an abrupt change in one metric, you may be able to determine the source. For example, an uptick in customer service calls could be linked to recent website updates that buried FAQs about shipping times. By monitoring your data and identifying these changes earlier, you can limit their damage – or amplify their positive impact.
Avoid “analysis paralysis.” – Amid all the talk about “big data,” more data may seem like a great idea. However, mountains of data may obscure what’s really happening with your business and distract you with irrelevant fluctuations. You can track additional metrics beyond your core KPIs, but don’t let them distract you from the big picture.
Plan for annual or long term trends. Maybe your product experiences higher demand around certain seasons – and customers are more sensitive to late deliveries around these times. With data to support these trends, you can adjust shipping schedules or better set customer expectations during these periods.
Start discovering measurable results
Whether you have a dedicated metrics team or have never looked closely at your transit reports, OSM can help you determine the right metrics for your needs. Our data-driven approach can help you assess your true total cost of shipping and identify where changes can improve your bottom line. Contact us to discuss your shipping needs and request a quote.