Customer service is not the first thing that most people think of when it comes to logistics, but it’s an integral part of the supply chain. After working with hundreds of companies over decades, you’d probably be surprised by how many are getting things wrong. Let’s look at my 7 truths of customer service that every business should consider.
1. Most Companies Don’t Truly Know Their Customers’ Service Needs
Most companies don’t truly know their customers’ service needs, though they think they do. This often stems from insufficient customer interaction, a lack of surveys, and limited performance measurement. Even after working with thousands of businesses over 30 years, this remains a persistent issue.
2. Companies Often Fail to Segment Customers by Service Needs
Not all customers require the same level of service. Some might need 2-hour delivery, others are fine with next-day service, and some are perfectly comfortable with 10-day delivery windows. This segmentation opportunity allows you to align supply chain costs with service levels — a significant competitive advantage when done well.
3. Some Customers Are Actually Satisfied With What You Might Consider “Poor” Service
Not everyone needs or wants same-day or next-day delivery. The key is setting clear expectations about delivery timeframes. Over-servicing can lead to unnecessary supply chain costs — and you may be spending money on a level of service your customers neither need nor value.
4. Most Companies Lack Sufficient Visibility Into Their Supply Chain Costs and Performance
This limited visibility leads to underperformance. You need clear cost visibility throughout the supply chain, especially in delivery. Without proper data visibility, effective management becomes impossible.
5. Unhappy Customers Often Won’t Tell You Directly
Happy customers might tell one or two friends about good service. Unhappy customers tell around ten people about bad experiences — and many will simply leave without providing any feedback at all. Customer complaints, especially on social media, can actually be opportunities for public problem-solving if handled well.
6. All Companies Have Non-Profitable Customers and Orders
Typically, around 10% of customers and orders are loss-makers. Some companies see up to 30% loss-making orders, and in extreme cases, 80% of orders can be unprofitable. This highlights the importance of cost-to-serve analysis.
7. All Companies Have Non-Profitable Products and Services
Sales teams often know about these unprofitable items. Sometimes they are strategic “loss leaders”, but the key is making these decisions based on data and cost visibility. It’s important to understand the relationship between profitable and unprofitable products — and to ensure that relationship is intentional rather than accidental.
