Why Marketers Need to Think Carefully Before Using Local Delivery Services

The ability to fully understand how their customers feel about products and services is the hallmark of successful marketing organizations. To get to this point often means marketers need control over nearly all factors that will eventually impact customers’ satisfaction with their purchase. But “nearly all factors” means there are some the marketer cannot control. For instance, many external factors are outside of marketers’ control.

Certainly marketers do control the products they develop and the promotions they create, but they have less control on other marketing decisions. For instance, most companies selling consumer goods in retail stores cannot control how retailers price the product or where the product is placed in the stores.

Another area of marketing that may also be outside of marketers’ control is product shipment. When setting up transportation arrangements companies have two options: 1) handle their own delivery, or 2) deliver using third-party services (e.g., UPS, FedEx). Option #1 is primarily used for larger orders, such as full truckload shipments or bulky products, such as retail outlets shipping furniture, appliances and landscaping products (e.g., trees, mulch). Customers are more likely to experience option #2 when smaller items are purchased, especially if the company selling the product is not located nearby.

With either delivery option, customer satisfaction can be impacted if there are problems. However, for the selling company that handles their own delivery, if there are issues that negatively impact satisfaction they are in a better position to address it. For instance, if a package is damaged when it arrives at the customers’ location, those involved in the shipment, including the person delivering the product, can provide information to the company so they can gain insight into why the product was damaged. With this information, the company can direct attention to the issue with the goal of improving their shipping methods.

On the other hand, when third-party services are used, addressing issues that arise with shipping may be much more challenging. Under this shipping arrangement, there is not much incentive for those involved to alert the product manufacturer to delivery problems. In fact, such issues may only come to light from customer complaints and not from information shared by those involved in the shipment. In other words, the manufacturer has limited control over a key touch point with its customers when it uses third-party delivery.

With this in mind, this story from Re/code raises even more questions about the control of third-party delivery. The story reports that ride-hailing company Uber is testing out product delivery, dubbed UberRush, in three test markets New York, San Francisco and Chicago. They are joining several other companies in the burgeoning “local delivery” market. Yet unlike UPS and FedEx, which have their own employees in the delivery role, Uber is using the same driver model used in their people-delivery business meaning they are not Uber employees.

While UberRush may offer many advantages, marketers considering this service will need to think about the potential impact it may have on controlling how a product is delivered. If there is not a feedback chain, where those involved in shipping are encouraged to provide information to help improve the process, customer satisfaction may be at risk.