In this day and age, logistics service providers who offer great last mile delivery experiences stand to increase their revenues. This critical phase of order fulfillment, driven by customer demands for shorter delivery times and real-time visibility, has become a focal point for businesses and the third-party logistics providers (3PLs) that support them to meet revenue demands.
Last mile delivery experience has a clear impact on sales. Capgemini research shows that 74% of customers who were satisfied with their delivery experience intended to increase purchase levels by 12% with their preferred seller. The same report shows that 55% of customers would switch to a competing brand if it offered a faster delivery service.
Given its correlation and relevance to customer happiness and satisfaction, last mile delivery has become central to the success of any logistics business. While it was already gaining some momentum before the pandemic, the need to improve last mile delivery has rapidly accelerated since 2020. However, most of the time, it can be incredibly difficult to get it right.
The explosion in e-commerce growth is closely tied to the safety concerns of customers. After the onset of the pandemic, overcrowded spaces became not just an inconvenience but a health hazard, driving customers further towards online shopping.
This surge in deliveries has sapped resources, putting a lot of pressure on fulfillment and centres and fanning last mile delivery costs. These expenses include fuel, maintenance, and the heightened labor costs of “contactless deliveries”.
Rising last mile delivery costs hurt logistics service providers (LSPs), retailers, and customers alike. Complex routes, failed deliveries, extra stops along the delivery route, staff pay, and fleet operations all add up.
In the case of a B2C model, higher shipping costs have a negative impact on margins and are often passed on to customers, damaging online sales relationships. In fact, 58% of customers report “high shipping costs” as their reason for online shopping cart abandonment.
Many manufacturing companies are now partnering with logistics companies, particularly in the direct-to-consumer model as a way to boost their sales.
Delivery and shipping experience have a significant impact on brand perception. Most businesses realize this and are striving hard to streamline their last mile logistics experience to cultivate brand loyalty, increase sales, and create a higher likelihood of repeat purchases.
B2C customers want flexibility with their purchases, including the ability to make last-minute changes to their orders. They are also vocal about their grievances and often share their experiences on social media and online review forums. To end that, it’s important for B2C companies to get things right the first time.
On the B2B side, there is an emerging need for faster, easier buying experience. Today’s B2B clients expect to identify a logistics provider quickly, receive instant quotes from the shipping company, and have access to advanced real-time tracking and express parcel services.
Autonomous deliveries, safety enhancements for vehicles, and AI-based sales and marketing tools like a logistics CRM, delivery management platforms, transport management software are all changing the face of the logistics industry.
One key area where technology is playing a big role is in visibility over the supply chain. Today, customers expect to know the exact status of their order, as well as its location. LSPs are now able to offer this using GPS real-time tracking and sensors embedded in packages, while equipping front office sales reps with all the information they need on a single platform.
Another crucial development is the rising popularity of autonomous delivery methods. The market for autonomous last mile delivery is growing rapidly, and is expected to have a 25% CAGR between 2021 and 2030, due to their potential to lower costs and increase efficiencies.
To fulfill omnichannel requirements, LSPs are reinventing their supply chain by streamlining their day-to-day operations. Since nearly half of global logistics companies say their technology is outdated, many still struggle with route planning — leading to shipping delays, higher costs and reduced lead-to-cash conversions.
Beyond technology like drones, self-driving trucks, and autonomous vehicles that take over human labour, innovation in sales and service automation has been significantly improving the productivity of reps in last-mile logistics. Many companies are now choosing to transition to cloud systems and integrated solutions, such as BPA, RPA and even a modern logistics CRM.
While customers are concerned about shipment updates, they also benefit from planning large-order consignments by understanding real-time freight rates. On the other hand, LSPs are able to absorb freight savings with full truckload (FTL) and less-than-truckload (LTL) freight options along with parcel shipments that may be severely impacted with changes in the socio-economic space.
Logistics companies can leverage customer data (such as customer location, order volumes, and buying patterns) in many ways by analyzing real-time information from various channels. This allows them to minimize the likelihood of delays and streamline operational efficiencies. For example, predictive intelligence through AI can help customer service take proactive action, instead of waiting for a customer to raise a complaint.
In B2B scenarios or international logistics, where volume of orders and costs are higher, reps can use AI embedded in sales tools like a logistics CRM to gauge the probability of a deal closure and get suggestions on the best action in the deal cycle. This data can be shared with dispatchers, who will focus on allotting the right amount of last mile staff to prioritize accordingly.
By centralizing customer data from sales, marketing, and customer service functions, logistics professionals will have access to information on the entire customer journey: sales, user journeys, and conversational chat histories, integrated with telephony services. This will help avoid misalignment between teams and miscommunications, and automate workflows for increased operational speed and sales efficiency.
Sales teams will benefit from access to revenue history, contract renewal information, average deal sizes, and past account issues to structure their approach to an account or an ongoing deal. In addition, marketing teams can understand individual customer needs and interactions across primary and secondary markets to attract, onboard and retain shippers.
With sales and marketing teams aligned on revenue and growth goals, customer service representatives will be able to provide better service. They’ll benefit from insights into current and completed sales transactions, cargo shipment status, sales order estimation, and vehicle, shipping/trucking, and customs documentation.
In the area of last mile delivery, many logistics companies try to unlock insights throughout the supply chain to improve efficiency across their sales operations. All customer information needs to be brought together on a single platform to shorten the sales cycle, lower the time between order placing and order delivery, and understand the reasons for won and lost deals.
With modern sales technologies, LSPs will be able to gain insights on the below metrics that are critical to optimize last-mile logistics:
Businesses will be able to offer better service by using this data to make top-level revenue-driven decisions. They’ll also be able to better handle difficult and unpredictable issues, keep customers informed on supply chain bottlenecks, and handle these issues sensitively based on the customer’s past purchase history with the company.
A customer should immediately be able to access automated shipping updates on their own, without needing to speak to a customer service representative. This will lead to increased customer satisfaction and reduced demand on your service teams.
For logistics companies looking to build a connected supply chain network, consider deploying chatbots that integrate with your logistics CRM, to help customers stay up to date on their shipments and offer them conversational self-service.
Beyond a logistics CRM, delivery management tools can enable both dispatchers and sales-ops teams to schedule and dispatch delivery jobs automatically, based on business needs and capabilities.
In today’s competitive market for logistics, last mile delivery experiences are key. Customers now care deeply about delivery time, speed, and efficiency—factors that can make or break sales for brands. More than ever, LSPs need to offer a competitive service in order to be attractive to partners and satisfy their customers.
However, optimizing last mile delivery can be challenging and expensive. To solve key issues in logistics sales, consider developing a dynamic sales strategy to fit the ever-changing logistics industry, external environment, context, and competition. Ask yourself what your competitors are doing, and how you can use these new advances to improve your last mile delivery logistics. You can also consider increasing efficiency in your processes through solutions such as a logistics CRM that can natively integrate with your marketing automation or service management tool.
The logistics industry will continue to evolve rapidly in the years to come, making accurate planning for top-line and bottom-line growth more important than ever.
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