• by Chris Rebholz , November 12, 2009

When you're looking to buy a car, there are various places to turn for information. You can talk to someone at a dealership or to a neighbor, or you can scour online reviews.

All these approaches are reasonable, but if you really want to learn something, there is one person you should ask -- an experienced mechanic. The mechanic is the one who knows about the model's reliability and cost of maintenance; the one in the trenches, every day, with the insight to steer you straight.

What does this have to do with back-end fulfillment and marketing ROI? Here's what: Direct marketers often fail to seek in-the-trenches intelligence from the mechanics -- i.e., the fulfillment provider. This is an enormous oversight.

Let me illustrate how your fulfillment provider can help you boost ROI.

Example One:

We were handling fulfillment for a "weed-whacker" product, which was marketed as replacing the cumbersome nylon string on "90% of commercial weed trimmers."

Product sales grew to several thousand orders per week. However, we noticed that return rates were higher than anticipated, and our customer service center was learning that the returns were occurring because the product didn't retrofit to some popular brands of weed trimmers.

Our staff purchased the models that people most often said were not compatible and confirmed the problem. We discovered that making the advertised product compatible with the other brands was simply a matter of adding a couple of nuts and bolts, along with an addendum to the instructions.

The result was a dramatic drop in returns and corresponding increase in customer satisfaction, just as the product was about to go to retail.

Example Two:

A client ran a comprehensive media test on a product with three upsells. There was a corresponding Web-store supporting the DRTV test. The test indicated that the product had legs, but the revenue per order was not where it needed to be. We analyzed online sales results, among other things, and noticed that the Web visitors had a more pronounced interest in one of the upsells over the others. This up-sell was in position three on the telemarketing script. We suggested it be moved to position one. Conversion rates improved by more than 12% and provided an additional $1.35 per order to the bottom line.

Example Three:

One of our clients was enjoying presumed success with a campaign that was active for 16 months. Sales history reports, however, showed a subtle yet steady increase in the return rates on orders. Same campaign offer, same manufacturer, same upsells ... so what gives?

In order to shave a bit off the cost of goods, the marketer turned to a foreign-made shipping box. The box was made of recycled fiber and was less durable. In addition, duplication of an accompanying DVD was sent overseas, cutting 10 cents from per-unit production costs.

The problem was that the damaged boxes arriving at consumers' doors were causing them to assume damaged product inside. How did we know this? The "return refused" activity was soaring. The customers weren't even letting the boxes into their homes before sending them back. Also, those bargain DVDs were a problem. An increase in the "skipping and blank DVDs" reason codes was observed by our customer response center. When the DVD didn't work properly, some customers returned the entire order. Once the original boxes and DVDs were restored, the return rates jumped back up.

There are many marketers who believe the only thing coming out of a warehouse or fulfillment center is product. Those who feel this way are failing to capitalize on another very important moneymaker coming out of those facilities: marketing intelligence.