FedEx is looking to both operational and relationship touchpoints to drive customer loyalty.
Operational touchpoints like phone conversations, online interactions at FedEx.com and driver pick-ups are important, said Mark Colombo, vice president of strategic marketing and corporate strategy at the MIT Sloan CMO Summit in Cambridge, MA on Wednesday.
But relationship touchpoints are equally, if not more, vital. As an example, he cited the fact that many people don’t want any contact with the company other than their driver who picks up and drops off packages.
“They don’t want direct mail. They just want a one-to-one relationship with a human being,” he said, noting that some drivers become such a big part of their route’s culture they end up running football pools for their customers. “That drives customer satisfaction and the brand.”
What matters at the different touchpoints differs with every customer. As Colombo told a laughing audience, for some customers, good services means no tire tracks on their packages. “When you move six to eight million packages, stuff happens,” he said. “It’s how you react to that stuff that matters to the customer.”
FedEx currently has $27 billion in annual revenue, and faces increasing competition not only from its stalwart brown rival UPS but new kid on the block DHL as well. Increases in loyalty do lead to increases in revenue as well, said Colombo. A one point increase in loyalty translated to a 5.9% increase in express user revenue, a 7.6% increase in ground user revenue and a 3.3% increase in revenue for customers who use both services.
Of course, you can’t make everybody happy.
While doing a customer service phone “ridealong” one Monday morning early in his tenure at the delivery company, Colombo heard a rep deal with a customer upset that his packages had not been picked up. It turned out he had switched from air to ground service, after being told by his rep it would be more cost effective. It turned out the differences in pick-up procedures hadn’t been properly explained to the customer.
“No matter what the [representative] said, the customer was not satisfied,” he said. “It’s much easier to give birth to a customer than to raise one from the dead.”
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