Trust is one of the largest barriers to success in the eCommerce space. Because many customers have been duped previously by ill-intentioned eCommerce sellers and/or can’t physically experience the authenticity of a new shop or product, it may be difficult for them to determine whether or not a business is trustworthy absent a well-known brand. If you are doing your best to instill confidence in your customers and are following the fundamentals of establishing trust, then you are already well on your way to earning and keeping customers. What happens, however, when the exigencies of day-to-day operations put your business’ interests in conflict with those of your customers? Though the simple answer is to always do what is “right,” reality — punctuated as it so often is by cash flow and profitability concerns, third-party errors, and other material issues — is generally more nuanced than that. In this article, we explore an array of trust-oriented conflicts related to order delays and errors along with strategies for mitigation.
Error #1: A Sudden Surge
The Problem: A sudden surge in orders — perhaps due to a viral social media story or a scaled ad campaign — can quickly overwhelm a business. Atoms, for example, became inundated with orders after it was profiled by the viral photojournalist outlet Humans of New York — within twelve hours they had topped their prior same-day sales record by 500%. Promises which may have been easy to keep under normal operating conditions (orders ship same day, inquiries are responded to same day, etc.), may suddenly become untenable in the midst of an unexpected surge such as this.
The Consequences: If not properly handled, surges can do as much (or more) damage than good to a business. Imagine, for example, that your store was set to continue selling items that are out of stock — in just a few hours, you could have an operational nightmare on your hands with hundreds or even thousands of backorders having been generated. Further, if customer support bogs down (which is inevitable), you’ll likely see an increase in negative reviews, demands for refunds, and/or chargebacks.Also, if the surge corresponds with a major holiday (especially Christmas), you have an especially concerning problem. Consumers have next to no tolerance for the late shipments of gifts — regardless of the underlying reason for the delay.
Transparency: If the situation cannot be resolved within two to three days, consider being honest with your customers. A word of caution, though: blanket emails can backfire, leading to a wave of refund requests and chargebacks that otherwise might have been avoidable. Customers don’t always notice a delay, but they will if you tell them about it.
Triage: As an alternative to full transparency, we have seen customers with a backlog of orders handle customer support inquiries one-by-one, prioritizing the orders of those who have reached out to ensure same-day resolution. This is a bit underhanded; however, it avoids the issue outlined above.
Timing: Surges during peak periods must be avoided at all costs. If one is thrust upon you, shifting to pre-orders is likely the only useful solution short of temporarily taking the store offline.
Planning Ahead: Experienced product sellers can often generate surges more-or-less on demand by scaling high-performing ads or dropping a new line to an enthusiastic customer base. Pre-surge preparations should include building out the necessary capacity — and setting legitimate expectations with customers — to comfortably meet demand on a timely basis.
Shipping Options: If a business has promised same day shipping because management knows this is the highest performing shipping option, a surge in orders may physically prevent the fulfillment team from keeping this promise. If your company is expecting growth, but you know your same-day shipping policy may not be able to keep up, it may make sense to offer both premium and low-price (maybe even free) processing and shipping options to split volume and reduce pressure.
Error #2: Supply Chain Issues
The Problem: Frequently, supply chain issues that are outside of your control cause delays. A few possibilities to consider:
Manufacturers are late in shipping inventory to you
Inventory arrives damaged or manufacturers sent the wrong thing
Third-party carriers (USPS, UPS, FedEx, DHL, etc.) are delayed in delivering to your warehouse
Product shipped to your customer arrives damaged
A package is lost in transit to your customer (or stolen from the front porch)
The fulfillment provider makes a mistake and/or ships the wrong item(s) to your customer
The Consequences: Fair or not, consumers generally do not distinguish between mistakes made by the seller and those made by third parties like fulfillment providers or parcel carriers. Expect to be blamed for anything that goes wrong.
Don’t Push the Envelope: One-off issues are going to happen, but severe mistakes can generally be avoided by not overselling. Wait until something is received, examined, and ready for shipment before selling it.
Shipping Options: If your business is facing routine shipping delays that are outside of your control, investigate other options that may be available to you. In recent months, bottlenecks at USPS regional hubs have materially impacted delivery times for many shipments, but parcel select services like UPS Mail Innovations have performed quite a bit better.
Transparency:Being honest with angry customers may help them feel better about your business and realize that certain things are outside of your control. You may also choose to provide them with a bonus, such as a gift card or credit, so they feel compensated for this point of pain.
Planning Ahead:Adjusting customer expectations about shipping delays ahead of time may help them understand that their order may be delayed. This, however, should be handled carefully — a downside of radical transparency is that it may result in customers shifting to less-forthcoming competitors.
Error #3: Calculated Risks
The Problem: Though consumers get a bad rap, they are actually more flexible than many realize — at least, in the aggregate. As such, many sellers choose to take calculated risks from time-to-time (an understatement for some). Consider:
Customer Goodwill: Consumers will often forgive a company a day or two if an order is late (if they even notice). If a company knows this, they may choose to take advantage of the opportunity to pre-sell and/or oversell in order to lock in sales and profits.
Cash Flow: Because cash receipts often arrive in a company’s bank account within 1-2 days, pre-selling and overselling can be utilized to finance product purchases, growth needs, etc. Dropshippers take this to an extreme, but many traditional eCommerce sellers are aware of the financial benefits of selling ahead.
Timing: Sometimes the market is simply just right for sales. Maybe a paid campaign, for instance, has optimized unusually well around a particular product. If the copy, creative, and targeting are delivering, it can be hard to switch off that winning ad or take down (“sell out”) that winning product.
The Consequences: If everything goes to plan, occasional overselling shouldn’t cause too many problems; however, if mistakes then occur, the compound effect can be devastating. Things to worry about:
Delays in product arrival
Any other delays or errors outside of your control
While many consumers are forgiving, compound delays can significantly damage your reputation. Under such circumstances, customers may vocalize their displeasure with your business in very public ways (social media, review pages, ad comments, etc).
Don’t Overdo It: There may be times when it makes sense to oversell; however, if you go too far, the damage can be irreparable. Pick your spots carefully, understand the risks, and remember Murphy’s Law: anything that can go wrong, will go wrong.
Build Trust Ahead of Time:Earning flexibility from your customers (not to mention your vendors) is similar to putting funds into a savings account. If you spend time and effort banking trust with your stakeholders, they may afford you some grace and understanding when something goes wrong. If, however, you have always put negative pressure on those relationships and withdrawn too much goodwill, it may be far more difficult to maintain a positive reputation.
What’s at Stake?
In the end, trust problems lead to a number of troubling outcomes:
Existing customers will not buy your products anymore.
Reputational damage will limit customer growth. Negative social proof, disparaging Better Business Bureau reports, and other unflattering customer-facing information makes it harder to convert new sales.
Returns and chargebacks will increase.
Merchant services providers may freeze or terminate your account. Because merchant services providers are acting as an intermediary between your business and your customers, they too need to be able to trust you. If they don’t trust you, they may hold your funds for an extended period of time to verify that your business is legitimate. If your chargebacks are excessively high or if you have violated credit terms, they may even add you to the Terminated Merchant Files, which will make it difficult for you to do business in the future — even with a different company.
Understanding how to anticipate and mitigate trust-oriented conflicts in eCommerce is a critical element of success and longevity. As with most things in life, the answers aren’t always simple; recognize and embrace the nuance inherent to product selling to find that perfect balance for your business.