aspects of customer service in international logistics and the impact of improving customer service on the company’s performance and its customers using UPS as a case study

 aspects of customer service in international logistics and the impact of improving customer service on the company’s performance and its customers using UPS as a case study

Introduction

In the current economy and recent globalization, location, unique product features, or even the ability to get exclusive contracts does not give a business a competitive advantage. According to McFarlane (2013), the birth of an information-based and service-led economy created equality on all levels. Knowledge and information are readily for organizations to access and share within their functional divisions and platforms, thus leveling competition ground. Trasorras, Weinstein, and Abratt (2009) argue that what differentiates the company and gives it a competitive advantage to be the market leader is how they deliver their value propositions. That is, how the company design and delivers its customer Service. Customers determine what is considered quality service or a good brand. In any business, a customer’s experience determines the reputation of the company, and the logistics industry is not an exception. The organization, therefore, need to be customer-centric and aim at meeting its customers’ needs to gain an advantage over its competitors. In this light, this essay critically discusses aspects of customer service in international logistics and the impact of improving customer service on the company’s performance and its customers using UPS as a case study.

2. Explanation of the aspects of customer service in international logistics (500 words)

2.1 Concept of customer service

According to Christopher, M. (2016), “Customer service is a series of activities involving all areas of the business which combine to deliver and invoice the company’s product in a way that is perceived as satisfactory by the customer and which advances the company’s objective.”

The main objective of customer service is to attain customer satisfaction. Customer satisfaction is met when the organization fulfills customers’ needs and exceed their expectation. In logistics, customer expectations are accurate and on-time delivery. When these are met, customers are less likely to leave, reducing churn; more likely to award the company with more business, increasing sales, prone to spread positive word of mouth, attracting new business, and they become easier to serve, reducing relationship maintenance cost. (MacGillavry and Wilson, 2014) thus giving the company a competitive advantage.

2.2 Aspects of customer service in international logistics at UPS.

logistics Customer Service is the aspect that focuses on the physical distribution of goods; that is, delivering the right product, in the right amount, in the right condition, at the right time, charging the right price and to the right client. (Matuszczak and Chrąchol-Barczyk, 2016)

Christopher, M. (2016) literature identified three components of customer service. First, there are the pre-transactional elements that create a favorable environment for customer services such the customer service policies and programs, the organizational structure necessary to implement the customer service policy, the flexibility of the system, or its ability to respond to customers needs.

Being Customer-centric and technology-driven, UPS has provided a website for its customers where they can find all UPS solutions. The website is very reliable and user friendly as anyone can be able to navigate through. In addition, its solution such as UPS My Choice is very flexible to the needs of their customers since members can choose to re-route their packages to a different Access point or addresses in case their plains changes and won’t be home to pick it up. (Ups.com. 2020)

Second, the components of the actual transaction, which are the main target for the logistics such as the time for placing an order, the preparation for delivery, ways to deliver the products, the schedule for delivery and complying it and continuous informing the clients regarding the status of their order. UPS continuously update their information concerning the delivery of the shipment on their website. According to a study conducted by Matuszczak and Chrąchol-Barczyk, (2016), it takes less than 5 mins to place a domestic order on the UPS website and a standard of 24-48 hours to have a package delivered. With the UPS Mobile, one gets text alerts about package deliveries or status changes. Access UPS My Choice to see and even modify the timing or location of home package deliveries. Create shipments and either schedule a pickup or locate the nearest UPS location. Anytime, anyplace, from your smartphone or tablet. (Ups.com. 2020.)

Lastly, the post-transactional elements of customer service which support the product in use, such as maintenance service, product replacement, client complaint resolution, and product reimbursement. UPS websites provide various solutions for Returns and contact information such as email address live chats, which customers can use while seeking after-sale support.

The elements described above are part of logistics and customer service, and their shape has a direct impact on customers’ decisions. By adjusting the web page to the needs of customers, the UPS gain a mean in the fight for customers. Matuszczak and Chrąchol-Barczyk (2016) argue that their proper conduct can win with the competition, and, as a result, help to build a group of loyal customers.

3.The role of improving customer service in international logistics in affecting the performance of UPS and its customers (1200 words)

3.1 The role of improving customer service in affecting the performance of UPS

UPS continuously adopts the latest technologies and innovation for enhancing customer service and sharpening their competitive advantage. The company has used various digital platforms that are very easy to use for its customers and make the experience worthwhile. In Late 2017, UPS embarked on a transformation journey designed to change the institution from a logistics company to a technology company with trucks and planes. The main aim is to achieve three principal goals: generate high-quality revenue growth; drive efficiencies and cost reductions that will improve their margins, and further develop their talent as they continue to foster a culture of innovation. (UPS, 2020).

To generate high-quality revenue growth, the company continues to listen to its customers and is taking action to develop new solutions to better serve their needs and strengthen their loyalty.

For instance, it launched a new international express offering, expanded its Saturday operations, and added new e-commerce services such as asset-light Ware 2 Go warehouse. Furthermore, they have simplified pricing for the Small and Medium Businesses (SMBs) customers and equipped their sales team with tools to provide customers with shipping quotes fast and on the spot. All these initiatives are met to increase the company portfolio and enhance its customers’ experience while working with UPS. UPS understands by enhancing its customer experience, create patronage. The customer becomes loyal to the brand, reducing churn, which means that the company’s baseline is maintained. More so, a happy client continues buying from the company. Zairi (2000), while analyzing customer satisfaction, indicates that not service users and customers depend on the company, but the company’s performance depends on its existing customers. Wirtz (2001) also emphasizes that customer satisfaction becomes the key element companies’ focus on seeking to promote repeated business relationships and increase long-term profitability.

The company involvement and investment in the digital platforms have enabled most of its B2B and B2C businesses that export to key e-commerce destinations around the world to have a more affordable way to ship with UPS Worldwide Economy. According to Gitman et al. (2020), distribution, when it provides the proper levels of service to meet customer needs, can lead directly to increased sales, increased market share, and ultimately to increased profit contribution and growth. UPS helps its customers distribute their products all over the world makes them loyal to the company hence increase in its profitability in the long run. According to Trasorras, Weinstein, and Abratt, (2009), the key to retention is customer satisfaction, and high customer satisfaction comes from delivering superior customer value. Highly satisfied customers stay loyal longer, talk favorably about the organization, pay less attention to the competition, are less price-sensitive, offer service ideas to the organization, and cost less to serve than new customers (Waari, 2018).

These initiatives seem to be paying off since their financial results have continued to grow year to year. Both top- and bottom-line results improved in 2019 due to increased demand for their services and new cost efficiencies in their network. According to David Abney, the company CEO, “the company, consolidated revenue grew 3.1% to $74 billion and adjusted operating profit grew 10.4% to $8.2 billion*. Globally, UPS delivered more than 5.5 billion packages, a nearly 6% increase over 2018, driven by B2B and B2C volume growth in the U.S.” (Investors.ups.com, 2020)

3.2 The role of improving customer service in affecting the customers of UPS

UPS is both a Third-Party Logistics (3PL) and a fourth-party logistics company. In addition to providing logistics services, the company also provides supply chain solutions such as logistics, warehousing and distribution, freight forwarding, customs brokerage, and consultation services. (Ling, Lee, and Ho, 2009). Through its continuous adoption of the latest technology and innovation, it continues to develop solutions and services that have, in turn, helped their customers grow in terms of revenue and reaching new markets both locally and internationally.

Their small- and medium-sized businesses (SMBs) customers, after partnering with UPS, generate total revenue because UPS helps them expand their operations by use of supply chain solutions. With its global transportation network already in place, including storage and distribution facilities around the world, UPS infrastructure helps its customers expand to new markets and move products quickly while meeting compliance regulations. (Ups.com,2020) More so, while expanding into new international markets, they are able to reduce time-in-transit by using UPS existing distribution centers, lower costs to cross the border into a new country, and save money in customs clearance costs.

Speed of delivery is quite important to consumers, especially on digital platforms such as e-commerce and is a critical competitive differentiator for many businesses, both large and small. In its effort to improve customer service UPS continue to develop solutions and initiatives which affect their customer in a positive way. In January 2020, UPS launched the seven-day delivery initiative, which will allow shippers to reach consumers faster with the products ordered over the weekend. (Investors.ups.com. 2020). Also, in 2019, UPS forged new paths to accelerate deliveries, creating innovative solutions for their healthcare customers. The company was able to use drones to move lab samples across the hospital, proving drone solutions can accelerate deliveries and provide shortened time-in-transit, thus helping healthcare professionals better serve their patients. (UPS Pressroom,2020)

UPS is also integrating its systems with its customers’ systems to give them newfound flexibility and capabilities. For example, in 2019, it launched UPS MY Choice for Business, which gives SMBs visibility and control over their shipments and help track the deliveries. SBMs can manage all their shipments from dashboards, receive estimated delivery widows and notification, make delivery changes such as date and address, proactively monitor outbound shipments to keep their own client in the know, and add multiple users within the company. (UPS, 2020). This translates to their customers being able to meet the needs of their own clients hence fostering trust and loyalty on their end.

All the above initiatives and solutions undertaken by UPS in an effort to improve its service to their customer have a positive impact on their customer. By being able to supply to their consumer worldwide using UPS infrastructure, their customers increase their sales and reduce costs such as transit cost and custom clearance cost, which results in profit and growth in the long run. The customer is also able to deliver his products within a short time, thus fostering trust with the consumers and build loyalty which yields repeated business. Bendle, Farris, Pfeifer, and Reibstein (2016) argue that the probability of selling to an existing customer is up to 14 times higher than the probability of selling to a new customer.

4. Conclusion (150 words)

From the analysis in this report, the role of customer service is very crucial to the operation of my logistics company. Improved customer service has a positive impact on both the company’s performance and its customers. UPS continues to grow and gain a competitive advantage and big market share over its rivals because by listening to its customers and using technology to develop solutions that meets their needs and retaining them. Their customers have also continued to grow both locally and internationally and in revenue due to the improvement of services given to them by UPS. This should remind organisations of the 80-20 rule; essentially that 80% of sales comes from 20% of customers, and that this 20% of customers represents repeat customers who are loyal because of the exceptional customer value they perceive in the business. Organizations must thrive on identifying their customer’s needs, meeting and exceeding their expectation to retain them, and gain a competitive advantage.