There's a lot to be said for the ingenuity behind recommendation engines and CRM software on an e-commerce site -- particularly when the suggestions are the kind that make your customers slap themselves in the forehead and say, "Great idea!" There's also a lot to be said for coordinating your efforts to satisfy the customer.
The shopping phenomenon, "instant gratification," is not new to e-tailers. Many try in vain to compete with local merchants in attempt to satisfy this natural craving by shipping ordered items as soon as they become available instead of the excruciatingly painful process (for the customer) of waiting until all items are ready before shipping. Unfortunately, these earnest attempts to satisfy the consumer often cause more headaches than convenience - especially when it involves buying and shipping gifts.
A Fast Food Mentality
I recently patronized Amazon.com to order a belated Christmas gift for my grandmother. I decided on a Casio CD player so my grandmother could listen to books on CDs and knit simultaneously. After I placed the CD player into the shopping cart, the recommendation engine smartly suggested that I also buy a 10-pack of D batteries. "Terrific idea," I mused, thinking I was saving my grandmother a trip to the local store. I placed the batteries in the shopping cart, dutifully ignoring the other recommendations for CD carriers, CDs, other books I'd like, etc. and placed my order. I selected the gift-wrap option for the CD player only, thinking (apparently with faulty logic) "well, why should I pay $5.00 to wrap batteries, especially when they'll arrive together in the same box?"
The next day I received an email notification from Amazon stating that they shipped the batteries portion of the order separately to give me quicker service and the remainder of the order would follow as soon as it was available.
I can see the expression on dear Nana's face as she gleefully opens the box and gets one package of Energizer E95FP-8 D batteries. I can hear her now: "Batteries? Come on! I know the economy hit the dot-coms kind of hard this past year, but... batteries?"
I should have learned my lesson from two weeks ago, when I placed an order for a textbook for a class I am taking, and was recommended a student solutions manual and special notebook to supplement the notes I'd take in class. I bought both. And sure enough, all three books arrived on three consecutive days -- in an attempt to satisfy my need for instant gratification.
A Chink in the Armor
I suppose the efficiency-minded order fulfillment software can't understand the mutually dependent relationship between a 10-pack of batteries and a Casio CD player the way a recommendation engine can. Then again, most e-commerce companies set up their order fulfillment to maximize customer satisfaction while keeping costs down.
The purpose of cross selling is to enhance customer experience and increase sales conversion with the reasoning that ultimately your customers will be more satisfied with your service, reinforcing their decision to buy from you again. By identifying sales opportunities, in my case, batteries for the CD player and a solutions manual for a textbook, the recommendation engine successfully identified which products could be bought together - or, which would complement the other. However, by shipping the batteries ahead of the CD player (a gift), Amazon not only has annoyed a loyal customer, but it incurred the added costs (that it will absorb) of its UPS bill by having UPS make not one, not two, but three deliveries to my house in three days. While I am always appreciative of any attempt to make my life easier and more cost effective, there is a lesson to be learned here.
Better integrating a recommendation/CRM solution with order fulfillment may prevent an e-tailer from aggravating customers, and it may save some money in the end.
Reprinted from ECommerce Guide.