Several customers message you one after another to say their order arrived late. The first thing that comes to mind is finding a faster courier, and a faster courier raises the cost of every order you send.
Before you sign anything with a new courier, read those messages again. Most of them are asking when their order will arrive, and only a few are actually complaining about the delay itself.
If the customer only wants to know when the order arrives, an automatic SMS with an estimated arrival time does the job. That fix costs you a few thousand toman a month, while a faster courier raises the cost of every single order.
Why is the first fix usually the most expensive one?
The first fix that comes to mind is an answer to the exact sentence you were told. The customer said the order arrived late, so you go looking for a way to make it arrive sooner. Fixes like that usually mean buying something or hiring someone, because you are paying to make something faster.
Big companies do the same thing. In 2017 Harvard Business Review asked 106 senior executives at 91 companies how well their organisation diagnoses problems, and 85 percent said their organisation is bad at it and that this costs them.
Write the problem down a second way
Before you spend any money, write the same problem down another way. You can write “orders arrive late” or you can write “customers don’t know when their order arrives”. Those are one problem written two ways, but their fixes, and the price of each fix, are very different.
If you still don’t know which part of your business the problem starts in, find it first with a few simple numbers.
Try the fix on a small scale first
Run the fix you picked on a small part of your business first. Send the arrival-time SMS for one city only for a month, and see whether the “where is my order” messages from that city drop.
Say you get 10,000 orders a month from 20 cities and each SMS costs you 300 toman. Switching it on for every order costs 3 million toman a month, while switching it on for one city with 2,000 orders costs 600,000. If the messages from that city drop, it worked, and you turn it on for the rest. If they don’t, it didn’t work, and you spent 600,000 toman instead of 3 million.
The cost that shows up months later
Any fix can create a new problem, and that problem rarely shows itself straight away. In systems thinking I wrote that today’s problems usually come from yesterday’s solutions.
Take the same SMS. If your estimated time is optimistic and the order turns up later than that, the customer now has a stronger reason to complain, because you promised them a time yourself. And if you pad the time heavily to stay on the safe side, some customers won’t order at all.
So a month after the full rollout, compare two numbers with what they were before. The number of “where is my order” messages should have dropped, and the number of complaints and cancelled orders should not have gone up.
Those few minutes of thinking before you spend are a large part of managing a small business. And if several problems are in front of you at once and you don’t know which to solve first, in a free diagnostic session we will work out where your main problem is.