Almost everything that impact returns actually occurs before the sale. Marketers address return rates once the returns show up, but don’t focus enough attention where the return process starts.
Without question, the most critical thing you can do to keep returns low is reduce the amount of time between customer order and delivery. Backorders increase delivery time—and your return rate. Customers placing a second or third order may be patient, but new customers to your brand won’t be. The longer you take to get product into their hands, the more their desire will fade, increasing the possibility of a return.
Speed of order processing and method of delivery also matter. If you outsource telemarketing and Web services, ensure delivery of “clean” files to order processing. Manual review of errors slows the entire process down. And pick, pack and ship orders within 24 hours, or at most 48 hours.
Use the fastest delivery method you can afford. If you’re not sure if, for example, switching from ground delivery to 2-day or priority for basic deliveries makes sense, try a split test and read the results comparing the impact on returns to the increased delivery cost.
Two other factors impact returns before the sale is made:
1. Product Presentation vs Product Delivered – If what the customer receives is not perceived as equal to or better than what they saw on your Web site, in your catalog, package insert or print ad, disappointment will set in and products get returned. Make sure that what arrives is at least as impressive as what caused the order. Pay attention to packaging and presentation—it matters.
2. Overall Product Quality and Value — Your product must actually do what you promised.
Even when you offer great value, keep product in stock, deliver quickly, and provide great packaging, you may experience higher returns than anticipated. It’s time to analyze the details.
Have you tested new offers or creative presentation? Remember that everything you do to impact front-end response and sales has the potential to effect returns rates as well. The impact of offer changes isn’t always predictable. For example, price increases sometimes make returns more likely, but other times they attract a more qualified customer and returns are less likely. Don’t make assumptions—look at the data.
If a new offer or creative has caused an increase in returns, but is overall delivering more profits for you (net of returns), see if there aren’t other places to make improvements:
1. Read customer correspondence for clues to why products come back
2. Log returns based on standard reasons and review trends
3. Determine what could have been done to prevent the return
4. Clearer communication in the creative
5. Improved instructions in the package
6. Faster delivery or some other product change
The bottom line – increases in returns happen as a result of decisions and plans you make before the sale is made. Recognizing that puts you in the driver’s seat for increasing customer satisfaction and profits.
Shari Altman is president of Altman Dedicated Direct.