Support Services: The Art of Continuity Fulfillment1 Feb, 2009 By: Tony Sziklai Response
Most direct response marketers will tell you that continuity programs are an excellent way to generate additional revenue. For some, continuity is not only a long-tail strategy, but also an essential strategy for making costly initial sales profitable. In fact, some campaigns are not profitable until the second — or even third — cycle of continuity, making them entirely dependent on a "sticky" continuity program.
Despite this, many marketers have a hard time implementing successful continuity programs. For some, this is due to bad offers or poor telemarketing. For the majority, the problem lies with poor continuity execution. How can you get the most out of your back-end information systems and fulfillment operations to increase continuity stick rates, reduce costs and maximize revenue and profits? Here are eight ideas to start with:
"Sticky" continuity design: Make sure you design your continuity programs to be as "sticky" as possible. For example, incentivize subsequent shipments by offering discounts, gifts or free shipping-and-handling. Also, make sure your fulfillment vendor's system can support your marketing ideas.
Continuity inventory projection: Inventory stock outs can seriously impact continuity programs, leading to unhappy customers, increased customer service calls and cancellations. Make sure your fulfillment vendor provides you with inventory forecasting tools that allow you to factor in past continuity shipments, stick rates, media schedules and other variables to determine how much inventory you will need over time.
Continuity reporting: Make sure your fulfillment vendor provides you with in-depth continuity reporting, including stick, decline, cancellation and return rate by cycle. Further, make sure that you can sort the data according to media, campaign, sales center, product SKU, offer, promotion and other filters.
Save-the-continuity: No matter how well designed your continuity program is, customers will still attempt to cancel. One way to reduce cancellations is to have an aggressive save-the-sale program as part of your customer service. Offer free shipping-and-handling for life, discounts on subsequent shipments, and other "downsells" to keep the customer from abandoning.
Shipping interval and payment optimization: Come up with shipping intervals and quantities that don't allow customers to accumulate surpluses. This can lead to cancellations. It is also smart to charge every 30 days while shipping a two-month supply every 60 days. You don't overload the customer with product, and you save money on freight. Monthly charges should be low and consistent to avoid standing out on a customer's credit card bill.
Staying engaged with the customer: Sending the customer an E-mail with advance notice of an upcoming continuity shipment can create goodwill and eliminate potential chargebacks. It is also helpful to call continuity clients that have credit cards that are declining or about to expire to make sure that a good card is available. This can actually lead to greater loyalty and buy-in to the program.
Flexible or "variable" continuity: Not all continuity systems are created equal. Make sure that your fulfillment vendor provides a robust, rules-driven system that can accommodate on-the-fly changes to continuity orders. Make sure that customers can change the items that they ordered, payment plans, shipment intervals and other variables whenever they wish. A self-service Web application that enables customers to make their own changes (versus dictating them to a call center agent) can be cost effective.
Return/refund policies: While you want to give the customer the ability to cancel at any time (to avoid chargebacks), you should make sure that your return/refund policy is strict about when and what they can return. For example, do not allow a customer to return multiple continuity shipments. If you do, your refunds will go through the roof.
Tony Sziklai is president of Moulton Logistics Management in Van Nuys, Calif. He can be reached at (818) 997-1800, or via E-mail at [email protected].