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Shipping Cost Sticker Shock

Sure, folks perceive the Internet as an opportunity to shop more conveniently, but not at any price. Shipping costs are part of the total value proposition your customers are weighing as they decide whether to click on that Submit Order button. Listen! You can hear their brains working. "I really like those roller blades, but the shipping is going to cost me $14.95! Sheesh, I wouldn't have spent a quarter of that on gas to the sporting goods store! And look here. For just 25 cents more, these dudes would ship the same package internationally? Like because Iím in the next state, I'm next door to London? I don't think so."

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Best of 2000: WINNER -
Grok Dot Com



Yes, Iím from Mars, so maybe thatís why I find this so bizarre: "Right now, about a third of U.S. e-tailers use shipping as a profit center."1 Thatís a business model? And a way to keep customers? Some people out there clearly need to know, "60 percent of those who abandon their online shopping carts did so because shipping costs were higher than they had expected."2 And thereís no way to really know how many customers did complete their purchases, but were outraged when they discovered later they had been hit with outrageous shipping charges that were not disclosed A bunch of those folks won't be coming back, ever.

A friend of mine needed a special microphone line level adapter for a Macintosh and had to have it within two days. Nobody locally carried this $20 item, so she went cruising the Internet. She found several companies who would supply it, for roughly the same cost, within the two-day deadline. One company located only a state away wanted to charge her $30 for 2nd Day Delivery. The other company, on the opposite coast, offered to send the item for just $12.60, the amount the carrier would charge them for the service. Guess who got the sale? And guess who is never going to see my friend as a customer again?

Your customers aren't fools, and it's a rare customer who isn't going to scratch his head when confronted with a shipping charge that looks way out of line. Folks expect to get charged something for shipping - after all, it's a trade-off for the convenience of not having to drive anywhere or hassle with crowds. That's worth something, and customers, for the most part, are fair-minded. But theyíre not willing to get taken to the cleaners. When you pull this sort of sticker shock with your clients, your credibility isnít just weakened, itís destroyed.

What can you do? You certainly don't need to ship at a loss (although 50% of e-tailers lose money this way - another brilliant strategy). But you can charge at your cost, possibly with a nominal handling fee if absolutely necessary. You will make it up on more sales volume (assuming youíre selling your product or service at a fair profit, of course). Or, you can build your shipping charges into the price structure of your products. Another option is a "flat-rate" shipping fee, which represents the average of all your shipping costs. Naturally, you need some good historical data to set this fee wisely, but your prospects do perceive a lot of value in policies that promise "$3.99 shipping to anywhere in the U.S." (or wherever).

Equally, if not more important, donít make your customers wait or guess about shipping charges. Most of them wonít; theyíll bail. Make shipping charges (and any other extra charges) clear before you ask for credit card information, make sure the charges are fair, and make the bottom line worth the convenience of foregoing a trip to the store.

Whatever you do, don't abuse your customers with unreasonable (or hidden) shipping costs. Do so and they'll quickly become customers of someone who doesnít.

1 "Five Battle-Tested Rules of Online Retail." Paul Kaihla, eCompany, April 2001. <http://www.ecompany.com/articles/mag/0,1640,9599,00.html>.
2 Paul Kaihla.


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Another Out-Of-This-World (And Free) Source of Valuable Knowledge

In my never-ending search to bring you the very latest and best e-business info in the galaxy, I've come across a truly exceptional resource. MarketingProfs.com is a terrific site written by some really smart (and really great) people, and it has a ton of practical stuff you can use to increase your business right away. They also put out an excellent newsletter that I look forward to and read diligently (don't even THINK of interrupting me). To learn more and to subscribe, check out MarketingProfs.com.

The Grok

The Technology Gap: Part I

For someone who's green, I'm sure seeing a lot of red. Because I do so much online ordering, I'm bound to run into the odd problem. Normally, I'm really laid back about it (humans do make mistakes, after all), and as long as I feel I'm making progress and getting cooperation from the business in subsequent e-mail exchanges, I'm cool. But this one really rubbed me the wrong way.

I've just had an experience with a dot-com that has suggested some thoughts that fall under this general umbrella: know when to let your technology work for you and when to intercede and offer your customer the benefit of the human touch.

Here's the story: I decided to order a digital camera. I went to CNET.com and did my research, then did a little price-shopping. Based on website look and feel, product cost, availability and shipping charges, I decided to give my business to Computers4Sure.com, which happens to get a three-star rating in the Gomez Merchant Review and is prominently featured in CNET displays of product pricing. I figured that meant they probably did a good job.

Maybe they do, in general, get the whole sales equation right. But they blew it in my case. Pity, 'cause they did a decent job setting up the navigation, making it easy to find what I was looking for, presenting information well and leading me through the order process. I got the onscreen confirmation page (printed it out), got the immediately-generated e-mail confirmation and sat back to await delivery, thinking "Ain't this the life?"

I didn't have a spot of trouble until the day after I placed my order. That's when I learned my order was cancelled because my credit card had been declined:

Thank you for visiting Computers4SURE.com. Unfortunately, your credit card company has declined your intended purchase. Computers4SURE.com would like to successfully process and ship your order. Please contact your credit card company for assistance.

If approved, please visit Computers4SURE.com to reenter your order. <http://www.computers4sure.com/>. Where you always get more... 4LESS!

There was nothing wrong with my credit. And it was impossible I had botched the job when I placed the order (remember, I had the print-out!). Turns out, according to my credit card company, Computers4Sure manually mis-typed my expiration date when they processed the order, so it didn't agree with what was on record. But the email made the whole thing sound like it was my fault.

Here's where the human touch would have made all the difference. If someone there had simply proofed their data entry before it was submitted none of this would have happened at all! Or, those keen on the technological solution could have set things up so the system processed credit card information in real time (easy to do and lots of sites do it). Don't misunderstand me - I'm fine with manual entry of this stuff, as long as there are techniques in place that prevent mistakes like this from putting the burden for their mistake on my small green shoulders. Doesnít exactly make me feel warm and fuzzy about them.

And, dear reader, it got worse. I returned a reasonably nice e-mail in which I explained their problem. I asked if they would consider simply reprocessing the order. Nobody bothered replying. Nobody apologized. In fact, there was no acknowledgment I even existed! If they were trying to push me away they did a great job. And I donít have to tell you once you've pushed a customer away, you gotta move heaven and earth to set things right.

In my case, this is the sort of simple human touch that would have worked wonders:

Dear Grok.

Duh! It was our mistake and we sincerely apologize. We've set things right and are immediately reprocessing your original order.

As a gesture of apology we are not charging you for shipping.

Philomena Phairwhether

Customer Service Representative

But nobody at Computers4Sure was doing that.

Grok Caveats:

Cover your tail. Whenever there is a possibility for human error, make sure it wasn't yours before blaming your customer. Most folks don't look good with egg on their faces.

In a wonderful old movie called "The Go-Between", Edward Fox says something like "A woman is never at fault" Of course, sometimes customers are at fault, but don't start the exchange with that premise. It is guaranteed to backfire when you least want it to.

Even if it is the customerís fault, find a way to say it that doesnít push them away. Itís not hard to do if you try.

A problem-solving letter requires some personalization: "Dear Grok" will do nicely. Signed with a human name works for me too. If I need to respond, having to send my email to a department or a company hardly makes me feel secure that a real person is going to pay attention. And donít you just love having to repeat the whole story umpteen times because every letter gets handled by someone else.

Find a way to hold the order open pending resolution of the problem. Because I reeeeally wanted the item, I undertook the entire reordering process. But believe me, I wasn't happy about it. I felt I was being punished, and I didn't do anything wrong! And most customers wonít do what I did.

Listen to your customers - really HEAR them - then let them know you've heard them.

If all else failsÖpick up the freakiní phone!

We like to think technology is the well-spring of making this Brave New World run smoothly. But it's all for naught if you can't remember there's a human on the other end of the transaction who wants to be treated like a human. And there are times when nothing but the human touch will - or should - do.

P.S. Computers4Sure did acknowledge my second order - if not me - processed it accurately, and my product arrived fast. That's something, at least, sort of.

More Grok Caveats in

The Technology Gap: Part II


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GROK is taken from the landmark novel "Stranger in a Strange Land", by Robert A. Heinlein. It is a Martian word that implies the presence of intimate and exhaustive knowledge and understanding. Our "GROK" is a keen observer of the world around him and he takes a particular interest in the World Wide Web. The folks at Future Now like him a lot because he's taught them that "sometimes the price of clarity is the risk of insult."

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