The Magical ROI mix of a good last mile delivery solution

How to calculate the ROI of a software as a service (SaaS) and especially SaaS for last mile logistics

At the end of the day every investment, every decision, every change in a business comes down to the achievable returns. Do we actually know how to calculate the ROI of a software as a service (SaaS) and especially SaaS for last mile logistics? How can couriers, shippers and retailers evaluate the best choices? Which KPIs should we take into consideration?

Before going into the details of the ROI calculation we might have to take a step back and define what we actually mean for ‘’good delivery’’ and secondly what we mean for a ‘’good delivery solution’’.

A good delivery is a delivery that respects the customer’s preferences, that is profitable for the business, that has notifications available while delivery is on route, that allows tracking of the package, that gives the customer the possibility to reschedule according to their needs, that permits a two-way communication between the driver and the recipient to avoid confusion or inform of possible delays, that has green options and different prices tags to choose from and that, for certain kind of goods (grocery, furniture, bulky appliances) allows the end customer for selection of date and time at e-commerce check out to schedule the best or most convenient time for delivery.

In order to address all these different components that make a good delivery and a good delivery solution possible, it is important to find a solution that can cover all these different steps and integrate seamlessly with the e-shop. How can this happen?

ANT perspective: integrated check out/integrated experience

Let’s take it one by one. Your customers will appreciate it if you respect their schedule. So when placing an order customers would like to know when they’ll receive it. Making delivery promises in the eCommerce solution can be tricky.

First of all your eCommerce solution must have the inventory information up to date. Modern eCommerce solutions have their inventory component but if you are selling in multiple stores or if you have multiple warehouses you’ll need an Integration Solution that can sync inventory in real-time.

Regional warehouses solve a lot of problems for big stores but also make delivery scheduling more complicated. If you want to offer personalized delivery options to your customers, your shipping department will have to know where and where to pick up the order from and will have to predict how long it will take to reach each customer on the route.

So you need a real-time Integration Solution that connects your eCommerce solutions with the Warehouse Management solution and your Delivery Management solution to generate custom delivery options at an optimal cost for each customer and your customers to schedule or reschedule a delivery based on their specific needs.

The results of such integrations will be visible in the increased sales generated by satisfied customers but also in optimized delivery costs.

Another way to positively impact customer satisfaction is by keeping her/him about the status of the delivery. The Delivery Management solution should be able to send/show real-time updates about the delivery status but this information also needs to be integrated into your eCommerce solution so your customer can check the status of the order on your online store. Accurate and real-time delivery information must also be integrated into your Customer Care solution if you want the customer care department to be able to solve complaints quickly. Have you ever had to call a seller because your order didn’t arrive on time? By keeping your customers informed the costs of handling this type of complaint disappear.

By integrating professional solutions you’ll be able to implement the process optimizations and automation required to increase customer satisfaction, increase sales and, at the same time, reduce operational costs. That is why integration is a multiplier of the underlying value brought by the connected solutions. Integration ROI will be directly influenced by the quality of the solution being integrated.

We often hear about Last Mile delivery software, their routing optimization and their driver app but there is a lot more to consider. Milkman Technologies has developed a platform that contributes to the most important final results: cost efficiency and customer satisfaction.  The Milkman Platform is an all round solution that can oversee the whole delivery journey from orders intake to delivery at end-customer doorstep. With its Control Tower feature all the data around location and distribution are stored and collected to ensure the most precise tracking from both side: the retailer/shipper and the end recipient, on top of this the Smart Appointment allows the e-shop to offer the recipient the most convenient delivery slots in terms of times and price: catering for the customer’s need, offering a tailored experience and allowing the retailer to bundle deliveries, to forecast demand better and manage the whole experience in the most efficient way.

Once gone through the exercise of listing all the characteristics that need to be included in the software to define it as a ‘’good delivery solution’’ and possibly to justify the investment in it, the list of KPIs can then be formulated as:

  • % Reduction of cost per delivery
  • % Increase in Success rate of first-attempt delivery
  • % Increase in customer satisfaction/retention
  • % Decrease of cart abandonment at E-commerce checkout
  • % Reduction of customer complains
  • % Increased process automation

There we have it. The magical mix for a ‘’good delivery solution’’ on which its ROI can be calculated and that will ultimately come to:

  1. Lower costs 
  2. Improved service offerings
  3. Increased operational efficiencies
  4. Significant competitive advantage

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