Owning customer relationships - Lessons and considerations from COVID-19
We’re inspired by many e-commerce businesses that have adapted their offerings to meet the needs of customers and provide value to people in all circumstances of this new environment. Whether any of these new habits are here to stay is anyone’s guess, but there’s no doubt COVID-19 has impacted e-commerce with unprecedented speed and scope.
During this timeframe, maintaining strong, direct customer relationships has emerged as one of the most common themes for success. While every business has different goals, these close relationships can be one of your most powerful assets — and the degree to which you own the relationship with your customers online is something to reconsider in this new online shopping environment.
What does it mean to “own” the relationship with your customers?
It’s the degree to which you are controlling your messaging and customer interactions directly instead of having your customers working with a third party. This is probably most common in your sales channels. Third-party marketplaces are a tantalizing option, but they come with advantages and disadvantages — which have been on full display recently.
J.D. Willcox is the co-founder of Qore Performance and a previous winner of the FedEx Small Business Grant Contest. For his company, J.D. and his business partner are very careful about how they work with third-party marketplaces, both to ensure they build high-quality relationships directly with Qore Performance customers and because they want to manage their risk closely.
As J.D. explains, “If we depend upon third-party marketplaces to drive the majority of sales, when something changes or disrupts those outlets or our products being marketed there, we are simply out of luck. It's much harder to manage pricing and give customers great service when you’re not selling directly,” he said.
As you reevaluate your use of third-party marketplaces, consider these pros and cons:
- OUTSOURCED OPERATIONAL RESOURCES: Free up time and resources by outsourcing logistics, fulfillment, shipping and delivery to businesses with deep expertise and extensive assets.
- GREATER POTENTIAL REACH: Find new customers you may not be able to reach on your own, be discovered more easily and build your brand recognition.
- OPTIMIZED SEARCH & CONVERSIONS: Large marketplaces often dominate the world of search, products are easy to find, and the purchase process is simple and easy, leading to more sales.
- INDIRECT CUSTOMER RELATIONSHIPS: Putting a middleman between you and your customers means less communication and data to inform your product development and other business decisions.
- LOWER QUALITY MANAGEMENT: When you lose control of pricing, fulfillment and quality control, you run the risk of a lower overall experience.
- LACK OF BUSINESS CONTROLS: The rules and policies of marketplaces can change without warning, leading to logistical issues such as delayed shipments.
- LOWER SALES MARGINS: Profit margins tend to shrink due to additional fees and fulfillment costs.
- MARKETPLACE COMPETITION: Some marketplaces use your sales and customer data to their own benefit by creating white-labeled products to compete with your most popular items.
- BRAND RECOGNITION BARRIERS: It can be hard to get your brand to stand out, not only is there a lot of competition from other brands, you’re also having to compete against the marketplace’s own white-labeled products.
- PATENT AND COUNTERFEIT ISSUES: Some marketplaces don’t adequately vet sellers resulting in counterfeit products and time-consuming patent infringement problems.
Many businesses that were relying on third-party marketplaces at the onset of the health crisis ran into problems when decisions were made outside their control to halt shipments. Because of this, some businesses are now rethinking their sales channel strategy to focus more on selling directly to customers.
Regardless of your sales channel strategy, there are a few widely accepted practices that can benefit any business looking to improve their relationships with their customers online:
- Direct and authentic communication
Communicating with your customers directly ensures your mission, vision and values are being delivered clearly, without third-party interference or interpretation. This can give customers a reason to feel good about doing business with you, building relationships before, during and after purchase.
All communication should be authentic to your business and provide value to your customers.
We all experienced it. During the onset of the health crisis, many complained about receiving unnecessary and unwanted generic “health messages” from a business you haven’t heard from in years. Some, maybe inadvertently, appearing to capitalize on the situation.
Just like any relationship, it’s just as important to listen as it is to talk. Having direct conversations with your customers can uncover insight and opportunities about your business and products directly from those driving its success while also providing additional opportunities to build on a relationship to drive additional sales. Use the data you have on your customers to personalize your communications.
- Humanize your business
It’s important to give customers a sense of the people behind your business and what you’re passionate about. This isn’t always easy when you’re transacting online, but there are creative ways to share the personality and passion behind your product such as on your product packaging, a handwritten thank-you note in the package or rewarding customers by interacting with your social media channels.
Your efforts to showcase the people behind your business will help build authenticity and credibility with your customers.
- Good old-fashioned customer service
This almost goes without saying, but we can’t not mention the value of customer service. No one knows your product better than you, and by being available and reachable, answering customer questions can show you are responsive and thorough. This direct connection to customers can be crucial when something goes wrong, allowing you to quickly address and correct the issue, while showing empathy and maybe even saving the sale. Creating a relationship of trust with your customers with quality customer service can help drive repeat shopping.
- Reward loyalty
Communicating directly with your customers also provides you with more opportunities to reward your most valuable customers with special offers, early access, product previews or other special insider access.
Showing genuine appreciation can help customers feel an added sense of trust that will bring them back.
Whether your business relies heavily on marketplaces or you’re looking for ways to ensure your brand is visible to a wide range of consumers in a post-COVID-19 world, make sure the choices you make, including where you sell, serve your long-term goals.
For example, you might consider continuing to utilize a marketplace for specific items or customer acquisition and then encourage those customers to buy directly from you via a more direct channel, such as your website. Even if you are selling on other channels, maintaining a strong, optimized e-commerce offering as your central hub will go a long way toward keeping your customer relationships healthy.
Stay on the lookout for special programs available to help small businesses post COVID-19. Some marketplaces like eBay are offering time-sensitive programs to help small-business owners during the recovery and rebuilding. Also, FedEx is working with BigCommerce to help small businesses get their operations up and running online quickly and affordably.
To dig in deeper to specific tactics small-business owners are taking to strengthen their customer relationships in this new environment, take a look at what these former FedEx Small Business Grant Contest winners are doing.
The information on this page and links provided are as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by FedEx of any of business, products, services, or opinions of any other corporation or organization or individual. FedEx bears no responsibility for the accuracy, legality, or content of any external site or for that of subsequent links. It is important to do your own analysis based on your business needs before using any third-party products or services. Any actions you take upon the information on this page is strictly at your own risk.