Reverse Logistics as a Customer Satisfaction Tool
Reverse logistics - the business of returning, exchanging, repair, refurbishment and remarketing products – is a key part of doing business for many companies. In fact, in the U.S. alone, estimates put the cost of reverse logistics at $100 billion per year. That’s a lot of money for even the largest of companies. However, as much as businesses need to control reverse logistics costs, they can also turn it into a customer satisfaction tool.
Many top companies are already working to improve their reverse logistics and positively impact customer satisfaction. According to the Aberdeen Group’s report, Revisiting Reverse Logistics in the Customer-Centric Service Chain, 61 percent of companies surveyed said that effective reverse logistics management is very or extremely important to overall company performance.
According to the Aberdeen Group’s report, the top three market drivers pushing companies to improve their reverse logistics are:
- Customer service
- Profitability
- The increased cost of reverse logistics
Not surprisingly, there is a similarity between the market drivers and the benefits that top companies have seen after implementing reverse logistics improvements. According to the report, the top three benefits of improving reverse logistics management are:
- Improved customer satisfaction
- Reduced parts procurement costs
- Increased service profitability
As you see, the number one spot in each category is customer service/satisfaction. This shows that improving reverse logistics can help your company create a competitive advantage by improving your customer service. And, according to Aberdeen, you’ll be ahead of the pack. The Aberdeen report states that nearly 60 percent of respondents are only somewhat or not satisfied with their reverse logistics approach.
Best Practices in Reverse Logistics
So what’s the first step to make your reverse logistics operation one of your biggest assets? Try taking a note from some of Aberdeen’s “best-in-class” companies. According to Aberdeen, best-in-class companies have a similar approach to optimizing their reverse logistics, staring with executive-level sponsorship.
Many of the best-in-class companies also reported a dedicated team of people that oversee return, exchange, repair and refurbishment, which is led by a senior-level executive. This organizational separation can help your company concentrate on reverse logistics without pulling resources from your supply chain functions.
In addition to increasing customer satisfaction, improving your reverse logistics can bring numerous other benefits. To learn more about these benefits, and the steps to get there, you’ll want to download the full Aberdeen Group report. As a Metrix newsletter subscriber, we’d like to offer you the full report, a $399 value, free of charge. Click here to download the Aberdeen Group’s Reverse Logistics in the Customer-Centric Service Chain report (PDF).