The opinions expressed by Entrepreneur authors are their very own.
Brands spend a lot of cash on building positive relationships with customers. They look for touchpoints to build awareness, create personalized experiences and create emotional connections that drive engagement, sales and loyalty. And they know perfectly well that every interaction counts.
However, amidst this turmoil, there is one crucial relationship that brands can overlook that may make or break the entire customer connection: the partnership with their third party logistics (3PL) supplier.
As with any successful relationship, this connection is based on clear communication, mutual trust, compatibility and a deep understanding of each other’s needs and goals. The efficiency of the relationship does not depend only on 3PL – it is the path of cooperation that leads to its success.
Going far beyond contractual agreements, here are three essential strategies brands can employ to cultivate thriving 3PL partnerships and improve the customer experience:
1. Communicate openly and often
When a brand partners with a 3PL, establishing clear and consistent communication is key to its long-term success. It starts in the assessment phase, when brands define their requirements, and leads to the proposal phase, when 3PLs share their core competencies. Even before a partnership decision is made, 3PLs should have an implementation plan in place that takes into account brand systems integration, inventory management, packaging details and carrier preferences, among other aspects.
Open communication mustn’t end with a service contract. For partnerships to be truly successful, brands cannot take a “set it and forget it” approach to their 3PL services. They can visit warehouses, establish communication channels and share essential information usually. The same applies to 3PL. They cannot simply take over warehousing, inventory management, picking and packing, shipping and delivery without understanding all the nuances of a brand’s business, from its brand identity and SOPs to its specific success compliance requirements. Each partner have to be willing to engage in transparent communication, share forecast and sales data steadily, provide visibility into inventory levels, and discuss any emerging issues, performance metrics, and customer feedback.
By fostering a strong partnership with 3PLs, brands can achieve efficient operations, transparent pricing that meets expectations, and effective communications tailored to their unique needs. This alignment fosters a positive customer experience characterised by predictability and reliability.
2. Treat your 3PL as an extension of your brand
A successful 3PL brand partnership goes beyond easy transactions. For the most successful partnerships, brands see their 3PL as a true extension of their team. It is an intentional process that requires greater than easy cooperation. This requires each brands and their 3PLs to be willing to integrate into each other’s businesses.
3PLs are not typically experts in retail, but they are experts in delivering products to customers. By relegating 3PLs solely to operational tasks without integrating them into a broader strategic framework, brands may encounter inefficiencies and missed opportunities.
Take sales and promotions for example. Let’s assume that a brand invested a lot of time and resources in introducing a recent product with a high-impact promoting campaign, but didn’t inform its 3PL partner about the expected increase in inventory and sales. This will result in staff shortages, delays in order success and customer disappointment. By leaving its 3PLs in the dark and not giving them the opportunity to prepare, the brand failed to support a successful partnership.
Communicating discrepancies, whether it’s recent SKUs or expected volume fluctuations, is an easy way to take your 3PL with you. Brands and 3PLs can go further by establishing a point of contact that gives regular updates, discusses key performance indicators corresponding to dock-to-warehouse metrics or inventory and picking accuracy, and adapts their customer service programs to quickly resolve buyer issues.
Operating as an integral a part of a brand’s team gives 3PLs the flexibility needed to tailor their operations to meet partners’ needs, slightly than imposing rigid, one-size-fits-all solutions.
3. Take advantage of 3PL technology and the visibility it provides
While retailers look for ways to improve the customer experience, technology-enabled 3PLs are working to meet their needs.
However, just partnering with technologically advanced 3PL firms is not enough. Brands must take full advantage of the technology on offer to remain competitive and meet the ever-changing demands of their customers.
Various technology platforms corresponding to order management systems (OMS), warehouse management systems (WMS) and transportation management systems (TMS) offer brands real-time visibility into their 3PL operations, success and delivery, increasing efficiency and providing visibility throughout the process operation. Moreover, 3PL automation, robotics and artificial intelligence tools can increase productivity, reduce costs and improve worker experiences, leading to happier warehouse and delivery staff who drive higher results for brand partners.
Leveraging technology and the 3PLs that implement it increases operational efficiency and gives brands the visibility needed to make informed decisions and proactively respond to customer needs, ultimately leading to a more seamless and satisfying shopping experience.
Keeping lines of communication open, viewing 3PL firms as a strategic partner slightly than a service provider, and leveraging their technology are keys to creating successful partnerships.
With strong 3PL relationships, brands can elevate their customer experiences to increase brand loyalty and stay ahead of the competition in an increasingly competitive retail environment.