Are Same-Day orders killing your sales?

When over-serving customers becomes a nightmare,

it’s everyone’s problem

You might find it hard to believe a salesperson has anything bad to say about customer service that goes above and beyond the call of duty.  But I am.  And here’s why. 

We’ve all heard the stories of a restaurant waiter that had a customer order a Coke but they only sold Pepsi products.  So, the waiter runs down the street and buys a Coke at a nearby store to provide the ultimate customer experience.  Or we hear about the cab driver who turns off his meter and drives an elderly passenger all over town including grocery shopping, picking up the tab, and even carrying her groceries into her home.

Great stories.  Tear jerkers for sure.  We applaud those employees at our company meetings.  We click “like” on social media and their story goes viral.

You’re probably asking, “What’s the problem, Greg?  Those are true workplace heroes.” 

Not so fast.

First, while our waiter is running down the street, standing in line shopping for a Coke, the rest of his customers aren’t getting served.  I don’t know if you have been to a restaurant lately, but there are no extra servers just walking around.  We have a labor shortage.  So, great customer service for that one person who can’t just drink a Pepsi has now turned into poor service for those that can. 

That’s just the start of our problems.  The person at the table next to our Coke drinker overheard this situation and now she wants a Dr. Pepper.  Bam! our super waiter goes on another trip down the street.  Two other tables overhear this going on and they now want pizza instead of what is on the menu.  Bam, our superhero waiter is now running store to store to pick up customer orders for everything but what is on the menu.

If you think this restaurant nightmare is ridiculous or doesn’t happen, then you should join me as I meet with managers in many agribusinesses.  The Same-Day order problem is primarily in the feed, agronomy, energy, and farm products businesses.  It can also be an issue for service providers like tractor parts & service departments, but it’s harder to determine in those situations. 

In all of these agribusiness examples, the problem started out innocently, just like our Coke order.  One customer forgot to order feed or didn’t include everything they needed on their order.  Now, their livestock will be out of feed soon.  Or, they won’t be able to get their baler up and running without the part.  They called their salesperson, who pulled some strings and got the customer service team to schedule a same-day delivery to this farm.  Problem solved.  Our customer was provided with exceptional service.  Livestock are eating and the baler is baling away.  Everyone high-fives each other as teamwork has provided the ultimate customer experience.

Perfect, until next week, on the same day, that same customer has that same problem.  You know where this is going.  Every Friday morning, Customer Bob “forgot” to order feed on Wed for Friday delivery.  He’s out of feed again and could we possibly do another one of those expedited same-day orders?  We did it once.  So, we must be able to do it again.

As you recall, we have a labor shortage on our hands, including drivers.  We don’t have extra drivers just waiting around to deliver last minute.  Their loads were scheduled the night before.  Their trucks are full and probably not going anywhere close to Customer Bob.  Now, what do we do? 

We might reconfigure all the loads so Bob gets his feed, which he knew he needed but simply didn’t take the time to order.  This causes extra office work as routes are changed.  Drivers are rerouted and not on the most efficient routes.  Frequently those customers that did order on time are penalized because of Bob.  Our good customer service is starting to go bad.

Maybe, we even push some of our loads off to the next day and deliver Bob’s today.  After all, they called us two days ago for that order, so they must not need it right away.  So, we push them off.  If we call and tell them, they might be upset or agree to the delayed delivery.  They also just figured out that they need to order their deliveries on “Rush order” status in order to get priority.  They want the same level of service that Bob is getting.  Our problem is growing.

In only a few short weeks, our same-day delivery has become the rule versus being the exceptional customer experience.  Our nightmare is growing.  With same-day orders increasing, our production crew and drivers know they can’t plan further than the morning of their delivery.  Order entry people will lay out a plan, but the delivery team sort of ignores it until the last minute.  Drivers, loading dock employees, and customer service people are some of the fastest ways customers find out information.  When a 2-day notice order is delivered late, customers will seek out the story of what happened by quizzing our drivers, operations staff, or our customer service person.  Again, our customers find out that short notice ordering is the way to get faster delivery. 

Let’s throw one last wrench into our situation before we talk about solving it.  Limited inventory.  Over the last 3 years, our inventories have had various shortages and outages.  In our short notice order scenario, Customer Bob gets the last 20 bags of that seed genetics because he got his delivery ahead of others, or the last 10 bags of hi-mag mineral in the warehouse because he squeezed his order in ahead of those that gave 2-day notice. 

Now our problem is a complete disaster.  We not only have to call our 2-day notice customer to tell them the delivery will be delayed.  We also have to tell them we don’t have the products we put on order for him when he called in. 

Full disclosure, in my early years, I was that salesperson described above and I had plenty of Customer Bobs.  I did make efforts to curb the same-day delivery problems, but I also created many of my own problems. 

What to Do?

It takes every single component of your business and your customer’s cooperation to solve this complex problem.  It was a simple nice gesture to one customer that got you in this situation, but it will take everyone to climb out.  It will take a balance between your inventory warehouse team, your trucking team, your order entry team, your production team, your ingredient buyers, you (salesperson), and your customer

I have seen companies try any number of single acts to solve it but fail time after time.

I’ve seen:

  • 48-hour notice policies and penalties
  • Early Order Discount incentive policies,
  • Demands by managers.  A policy email to the sales team or a snail mail letter to your customers will not solve this problem.
  • Threats by dispatch managers,
  • Warnings of mass customer losses by salespeople if we don’t do same-day.  Salespeople, please understand that the cost of short notice ordering is on everyone involved, except the customer who short notice ordered!
  • Threats from customers that they will leave, and some actually do if not given same-day delivery.
  • Bin management programs or regularly scheduled customer deliveries.
  • Route trucks

Some of these ideas work temporarily and some actually do improve the situation.  But none of them work if your whole team isn’t on board.  The minute a customer service person breaks the policy for one customer, it starts all the bad habits back up again.  One salesperson calling in and ranting at the truck scheduler to get his customer’s load delivered TODAY! And we start down the same old path.

All hope is not lost.  The challenge is surmountable.  It just takes a lot more effort than what got you into the problem.  It takes everyone on the team.

Tips to improve this situation:

  1.  The location manager, who oversees all aspects of ordering, manufacturing, delivering, and sales will need to be the leader of the change.  Without this one element, the problem will continue.
  2. Clear and reasonable expectations on delivery capability needs to be established and understood.  2-day notice has to be possible by our customers in their business.  We are in a seasonal and highly volatile industry.  Weather, markets, commodity pricing, and availability affect our customers, us, and our vendors.  If our customer’s business does not allow them to place the 2-day notice, then our challenge is to figure out how to accommodate.
  3. Over-communicating and measuring are the tools needed to make progress.
  4. There has to be a reasonable expectation of cost when a customer does not comply by ordering on time.  Maybe not the first time or once in a great while when they make a mistake and order late.  But talk with your order entry team and they will tell you exactly who the chronic offenders are. 
  • It’s crucial that your sales team understands and agrees with this cost.  Know what your competition is doing in this area. 
  • Give the sales team and customers plenty of warning that short-notice orders have a cost.
  • Walk them through the cost it causes within your company.
  • Lastly, as their salesperson, help your customer organize their ordering process so they can order on time.

Final thought.  As managers, we see the tremendous cost this problem has on our employees.  Our inclination might be to go out heavy-handed and charge a stiff penalty on short-notice orders.  Be very careful here.  We have a lot of moving parts in our own ability to meet the 2-day notice orders.  Trucks break down, mistakes happen, order entry forgets to put in an order, salespeople call in the wrong product, etc.  What will we expect our customers to say when this happens?  How will we want them to handle it?  Heavy-handed and demanding a discount because we didn’t deliver when we said we would? Or understanding as this was the first time in a while? 

Good luck on this customer service journey.  It’s important!

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