In an ever-crowded market of supply chain solutions providers, any additional value-added services provided to your customers can go a long way towards either winning a new contract or keeping a current client happy.
One key value-add can be helping your clients transform their aftersales operations from reactionary and passive to one with active revenue streams. Along the way, you can find several cost-cutting solutions to implement, as well as several potential pitfalls to avoid.
Returns management (RM)—the process associated with managing a product after the point of sale—can play a critical role in your brand’s bottom line. While there are endless case studies on the topic of RM, let’s touch on a critical two:
- Cost containment. Like it or not, there are costs associated with the RM process that, if managed incorrectly, can quickly outweigh the positives, resulting in a net loss of revenue. Taking the time and initiative to enact continuous lean improvement protocols to your RM operations can pay off in the long run, as your staff continuously moves to identify and eliminate unnecessary costs.
- Unnecessary returns. The worst thing your RM operations can encounter is no-fault-found (NFF) returns. These are items that were returned to your facility, yet nothing can be found to be wrong with the item after it is tested. This is negative in three ways. First, it means you spent money on getting a product shipped back and tested unnecessarily. Second, your customer initiated the return because they believed there was a problem with your product and likely now has a negative view of your brand. Third, at the end of all of this, you still need to provide your customer with a new item at your cost. The easiest way to avoid these issues comes not in the testing and repair facility, but instead, in a call center. Having a well-trained staff that can clearly identify the problems your customers are having with a product—and work them through the proper instructions for use—can directly translate into a reduction of NFF returns.
While aftersales tends to focus mainly on the product, improper management of your brand’s customers during the aftersales process can leave them feeling alienated and, in turn, seek out your competitors. The following two areas are critical for allowing a brand to shine through an aftersales process:
- Customer satisfaction. When your customers are interacting with your brand in an aftersales capacity, they are more than likely to be unhappy with your brand’s performance and image right from the start. Remember, the only reason they engaged with your brand in an aftersales capacity is due to a problem they see with the performance of your product, be it broken, faulty or an NFF situation in which the customer needs guidance. Regardless of who is at fault or what happened with the product, ensuring that you have well-trained and compassionate call center staff either in house or with your supply chain solutions provider can help you win back the confidence of your customers. Proper mediation training and the ability to clearly understand the issues your customer is having—and present easy solutions to the problem—can go a long way.
- Customer data capture. In order to initiate a return or repair, your customer should have to interact with a member of either your in-house or partner-provided customer service team. This conversation can also yield a wealth of data if captured and converted correctly into actionable intelligence. It is important to identify and flag the cause of each return, and analyze this data to identify the trends driving your returns, so that you can act accordingly to get ahead of the issues before they snowball.
If it is customer error, make sure your staff is equipped and ready to train a customer on proper use. If the issue is caused by a supplier defect, make sure you have processes in place to halt production until the faulty pieces can be evaluated, and a solution or a new supplier can be found. Same goes for a fault that is caused by improper design; be sure your supply chain solutions provider has the ability to halt production and implement changes or part substitutions along the various stages of your supply chain to keep from it impacting delivery commitments. Whatever the cause of the return, the information you collect during the returns process is invaluable to the product’s—and, ultimately, your brand’s—success.
Repairs, Refurbishment and Resale
For too many years, the typical protocol for returns was to simply send out a new product and send the defective item off to a landfill. If your brand is still operating this way, you are missing out on both a potential revenue stream as well as a supply of spare parts.
Even if one or more pieces of your product failed or broke, it does not mean that the product is valueless to your organization. Instead, you should look at this item as a source of replacement parts for the rest of your aftersales operations. When cost-efficient, disassembling a product with the intent to mine for useful spare parts can be a low-cost way to source supplies for repair and refurbishment operations.
NFF returns, as well as products that can be economically repaired and refurbished, can instantly become a new revenue stream for your brand. While some brands may shy away from this—thinking that it could hurt their overall brand appearance—those who embrace it can use the new revenue stream to offset the costs of overall aftersales activities or even realize a profit when managed correctly through their aftersales partners.
My hope is that, after reading through these examples, you will take an in-depth look at your brand’s current aftersales activities and make adjustments to be sure you are not leaving potential sources of revenue or information on the table.
If you are, it may be time for you to re-evaluate things.