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Set the right priorities when you start improving your returns process

by Stef de Bont, on Apr 20, 2017 5:48:35 PM

Are you ready for the upcoming peak season? Are you ready for a potential increase in returns following the peak? Perhaps this is the moment to prepare your returns process for it. If you decide to start improving your returns process make sure that you set the right priorities. The world has not been built in one day, and so can’t your returns process.

Where to start

The operational returns process can roughly be divided in two main parts: Reverse Logistics (Transportation) and Returns Processing. Both impact the two main business drivers: Cost and Customer Satisfaction.

Before you make the call to improve your returns process you should first pick your main driver for improvement. Next you pick the part where improvements will contribute to that driver the most. Don’t make the mistake to do it all at once. Your probably don’t have the time and resources for it and likely you have many other priorities in other areas of business as well. Why not cherry pick the low hanging fruit in returns management first and take the next big step in a second run. Just cherry picking will have you running already.

Set your priority

Let’s say that customer satisfaction is your main driver. It directly impacts conversion and retention so it sounds like a good priority. Good choice.

Next ask the question: which part contributes the most to customer satisfaction? Improvements in transportation or in returns processing?

Transportation is more or less a given

If you think about it, transportation is pretty much a given. There are so many reputable carriers with great transportation services. Whether they ship from A to B or from B to A, the performance and costs are more or less a given. Returns transportation just works and there is likely little room for improvement to add to your customer satisfaction objective. On the cost side you can reduce costs by changing carrier but is this really giving you the big improvement you are looking for? In some cases, like in international returns, there likely is a bigger improvement opportunity but is it the first one on your list?

Returns processing is the real big opportunity

The majority of returns costs are in the returns processing area. Think about costs for administrative customer contact; upfront for returns authorization, during the process for status requests and at the end in administrative (refund) returns processing.

Next to administrative costs you deal with the costs of physical returns processing like receiving, checking, stocking and problem shelf handling. Finally there are hidden costs like product value erosion while returns are in the processing queue.

Customer satisfaction

But let’s go back to your main priority to improve customer satisfaction. It is fair to say that a reliable and fast “returns-to-refund” (or “return-to-exchange”) cycle not just impacts costs but also largely contributes to your customer satisfaction objective. At the end it is all about ease-of-use, reliability and speed for both you and your customer. Returns management should just be a process that runs and that doesn’t require too much attention. Impacting customer satisfaction should just be easy for anyone involved in the returns process.

Step by step improvements

Again, let’s take a step-by-step improvement approach. Here is a simple priority sequence for your improvement plan:

  • Integrate returns registration by the customer with the back-end returns processing; use a simple tool to make sure that all data is captured in one system. Having all data available during returns processing will contribute to the reduction of the overall cycle time. A returned box without information is a problem shelf item.
  • Integrate your (existing) carrier services to simplify the transport booking process. Enabling your customer to directly print the appropriate returns label will also contribute to the overall cycle time.
  • Integrate the new tool and process with your existing systems. A fast and accurate exchange of data between systems will contribute to the overall cycle time.

A clear result from a simple step-by-step implementation effort

The logic is simple. A shorter cycle time improves customer satisfaction. That is your priority, right? But less time likely also means less costs in returns processing. Isn’t that a nice spin-off? Start improving today.

Topics:returns managementreverse supply chainreverse logisticsproduct returns

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