Operations and Fulfillment: Using Fulfillment as a Customer Retention Tool

The warehouse is the last step in preparing a package before it lands in the hands of a customer. It's responsible for the last impression of the customer's overall buying experience. While this means it should be a key place to differentiate your brand's messaging, not many retailers recognize that order fulfillment represents an opportunity to capitalize on brand awareness. The fulfillment opportunity is responsible for the last impression of the customer's overall buying experience.

By 2015, the online retail industry is estimated to be worth $279 billion, according to order fulfillment provider Fifth Gear in its whitepaper titled Branding Beyond the Sale. This means that retailers will be communicating their brand message more frequently through order fulfillment, so don't make it an afterthought.

Here are six simple yet innovative branding techniques your brand can perform to strengthen its customer retention:

1. Pay for unique, eye-catching packaging. Online retailers are now making it personal. With customizable packaging and more attention to quality and detail, retailers are stepping it up with their product branding. Based in Iowa, Thelma's is a cookie delivery business run by Lana Lewis and her son Dereck. Their fresh, out-of-the-oven snickerdoodles and chocolate chip cookies are packaged into an oven-designed box. This unique presentation not only captures the essence of the brand's warm cookies, but also stands by its "made from scratch" motto.

The extra care that Thelma's gives its packaging goes a long way in making a strong and lasting impression on the brand's customers. Such effective and creative packaging excites the shopper and serves as a great promotional tool when customers share their experiences with their social circle of friends.

2. Keep your customers hooked with free samples. Increase your chances of converting your customers from one-time shoppers to retained customers by giving them complimentary samples with their purchases. Cosmetics retailer Bobbi Brown is known for offering three deluxe samples with any order of its cosmetic products. This is a great way for customers to test out a product before they commit to buying it, while at the same time encouraging repeat sales. Bobbi Brown is building its customer loyalty base by regularly "treating" their customers to a few special surprises with each purchase. Moreover, offering samples can be an effective way to introduce more products to customers, especially new products, and can ultimately lead to additional sales if customers end up liking the samples.

3. Show you care by sharing and advertising good deals. If you have extra space in your shipments, you might as well make the most of it by slipping in some flyers, newsletters or coupons. Hewlett-Packard (HP), for example, does a great job of advertising deals from Snapfish, a unit of HP that provides web-based photo-sharing and photo-printing services.

I recently purchased HP ink from Wal-Mart and was pleasantly surprised to find a coupon for one free 20-page, 5''x7" photo book by Snapfish. HP personalizes its customers' experiences by cross-selling other services and products that align to their interests. This is a win-win situation for both the retailer and the customer. Alternatively, you can tailor your flyers in accordance to the season or time of year. Integrating data analytics and carrying out customer segmentation will give you the added advantage of targeting specific customer segments with relevant promotional material.

4. Send a personalized note. A handwritten note goes a long way, especially from someone you just met for the first time. Sales associates from J.Crew are taking customer service to a whole new level. Jackie Huba visited her local J.Crew store one day to return some clothing and was greeted by Natalie, a not-so-ordinary worker. After assisting Jackie with her returns and engaging in a quick conversation over their shared love for the Pittsburgh Steelers, Natalie bid Jackie good-bye ... but not for long.

Weeks later, Jackie received a handwritten note in addition to a $10 gift card from Natalie. This simple touch converted Jackie from a regular shopper into a loyal patron. Retailers are finding new ways to personalize their customers’ experiences, and this may be one of the most personal and impactful ways yet. In fact, go a step further and send handwritten thank-you cards to every customer. In spending only a few minutes and a stamp, you not only win over a customer's heart, but also guarantee an everlasting relationship.

5. Promote a "try before you buy" campaign. The practice of allowing consumers to try a product before buying it is quickly becoming popular in the retail industry. For example, Warby Parker sends five pairs of vintage-inspired prescription eyeglasses to homes, absolutely free of charge, for a five-day trial. This home trial enables consumers to engage more with Warby Parker's products and the company itself.

Not only does the strategy promote excellent customer relationships, but it also serves to engage customers via social channels with relevant content. Warby Parker has received a collection of "Home Trial" reviews from its loyal fan base. This strategy allows for prospects to "sample" the product before deciding whether to purchase it. The strategy has helped to build brand credibility while moving prospects one step further into the sales cycle. Prospects have been converted from being mere eyeballs to actual users of the product.

6. Celebrate everyone's birthdays like they're your own. Don't miss out on the opportunity to show customers you care about them as individuals. Whether it be a free gift or a coupon for their next purchase, offer some incentive for your customers to purchase from your brand again. Birthday's are a chance for you to re-engage your customers as the right time with the right off. Starbucks thanks its customers by celebrating their birthdays with a free treat and a witty tagline. Your brand can use a similar birthday discount strategy to win back customers who may have lost interest in your business. This tactic also serves as a great way to thank your existing customer base for their loyalty.

Order fulfillment is fast becoming an integral part of e-commerce brand messaging and a way to differentiate your company from others, says Fifth Gear in its whitepaper. Start making order fulfillment a priority by working closely on sales projections to set proper expectations, being aware of any additional services your warehouse offers that you could leverage and asking if your fulfillment partner can source custom packaging on your behalf.

Jerry Jao is the CEO and co-founder of Retention Science, a company that leverages big data algorithms and statistical models to generate customer loyalty. Jerry can be reached at Jerry@retentionscience.com.