Last mile delivery is the most critical — and most expensive — part of the shipping process. It’s also vital to customer satisfaction and key to delivering strategic and financial impact. 

From building a better, more enjoyable customer experience that enables future growth to addressing operational challenges and improving efficiencies for bottom-line success, the last mile is rife with lucrative opportunities for shippers to lower costs and increase customer lifetime value (CLV).

“Often, the customer believes that if a delivery goes wrong, it’s likely the brand's fault,” said Rob Bernton, Senior Director of Client Success at Veho. “Brands that offer a better delivery experience will be better positioned to win market share going forward.”

By revamping last mile delivery and return strategies to give customers what they want, companies can turn pain points into differentiators, improve brand perception and loyalty, and make better use of their budgets.

According to a recent report from Veho and Incisiv, 92% of respondents agree that optimizing last mile delivery leads to significant operational cost savings — and they’re not wrong. Companies have already started turning to the last mile for improvement opportunities, and it’s paying off.

Optimizing last mile delivery for cost and performance

“When we first began working with an organic meal kit company, we were able to improve their on-time delivery (OTD) from 92% to 99%,” Bernton said. “This translated to a 40% reduction in delivery errors, a 61% reduction in total credit and refund costs and a 71% reduction in cost of refunds related to delivery issues. On the whole, we have seen countless times where clients are able to lower their customer support calls and their refunds or credits on orders, and they have been able to reduce their client churn.”

Getting a delivery wrong is costly — both immediately and in the long term — and may be as detrimental to the customer relationship as it is to your bottom line. Unhappy customers due to failed deliveries lead to inflated ancillary costs, such as increased customer calls, redelivery costs or replacement costs.

“Misplaced packages increase the likelihood of requests for refunds and reorders, and they ultimately lower customer lifetime value,” Bernton explained. “This has tremendous long-term impact on a brand’s growth and even has the potential to impact company valuation if the issue escalates.”

Enhancing your brand with customer-centric deliveries

Engaging a last mile expert with middle-mile and first-mile capabilities allows you to scale your business, streamline deliveries and meet sudden surge spikes. 

“At Veho, we continue to grow our coverage and density within the markets we operate, which allows our network to have greater density and lower cost. When you add our unique marketplace model that scales up and down based on seasonal demand and our consistently high OTD (on-time delivery) performance, we are continuously working to lower the total costs to our clients,” Bernton said.

By giving customers more control throughout the delivery process, businesses drive higher customer satisfaction and improve profitability. According to the INCISIV report, 80% of respondents believe a better delivery experience improves repurchase rates and brand loyalty. The report also estimates that last mile delivery has enabled, on average: 

• An 8.9% improvement in e-commerce conversion rates.
• A 10.6% increase in average order values (AOV).
• An 8.9% decrease in customer churn rate. 
• A 15.3% boost in Net Promoter Score (NPS).

Reduce costs while delighting consumers

Bernton said, “Anything the brand can do to capture better delivery instructions from the customer — such as access codes, drop-off location information (especially in apartments), and times that don’t work for drop off — these will significantly reduce delivery costs for the brand.”

For example, consider Veho’s new Perfect Placement feature. By enabling customers to upload or text a photo of their preferred placement, along with any additional delivery instructions, the new feature eliminates guesswork and ensures drivers know precisely where to leave packages, stopping potential issues before they happen.

Once the package is placed in the specified location, customers receive a confirmation, complete with a photo of the placed package, ensuring peace of mind. However, if a package is delayed, Veho can keep customers apprised via text or within the Veho app, a capability that has led to an average 4.9 customer satisfaction score improvement for luxury apparel brand clients.

Its customer-centric innovation hasn’t stopped there.

“We are working to launch our geo-coded pins to show our drivers exactly where to drop off a package,” Bernton shared. “We are also working on better address verification technology and real-time nudges that alert drivers when they are in the wrong location when dropping off a package. All of these will help our partners realize delivery savings.”

The last mile is especially high stakes, so getting it right is crucial. By meeting customer expectations, brands can enhance their reputation, decrease the cost associated with unhappy customers and safeguard their growth — all while fostering stronger customer relationships built on trust.

Connect with Veho to learn more about how your organization can build a better delivery experience.