THE IMPORTANCE OF OFFERING MULTIPLE SHIPPING OPTIONS FOR YOUR E-COMMERCE BUSINESS
The importance of offering multiple shipping options for your eCommerce business: Why giving customers a choice of shipping options can increase...
17 min read
BUKU Marketing : Jul 21, 2022 11:56:49 AM
Hello everyone and welcome to another episode of dojo live. It’s July 13th of 2022, my name is Kim Lantis and it's my pleasure to be with you today. Co-hosting along with me is America Guerrero.
Hey everybody it's nice to be here!
Hi America, nice to see you again! And of course, the star of the show, today's guest Ken Muir who is the CEO of BUKU Ship. Thank you Ken for joining us.
Thanks for having me, I appreciate everybody being here.
Our pleasure, we really look forward to learning from you today. Our topic is going to be really exciting something that I think every company should be excited and focused on which is trust and brand loyalty.
But before we get into the specifics of today's topic, we'd really like to get to know you a lot better Ken. I know that you're airing here from a term which I feel like I should have known that I didn't know, Silicon Slopes in Salt Lake City Utah! What else can you tell us about yourself Ken? We'd like to get to know you a bit better.
Well, I’m an engineer at heart. I spent the early part of my career focused on building great software. Fingers on keyboards designing software for 16 years or so.
I am also a former Novel veteran and I’m proud of that! Novel is a great Utah company that established everything you see here. So, I spent quite a long time there and eventually moved more into the management and business side. I always joke with my engineers who I still have a nice kinship with that I got my managerial lobotomy and quit writing code.
It's my second time being a CEO and I was fortunate enough and proud to have led a company based in Montreal called “GWAVA”. We specialized in information security, information management, and archiving. I led that company for almost six years, and we had a fantastic exit back in 2016. I worked for a little bit longer for the company that we sold to and then took a little time off. And that timed right with the pandemic.
But I always knew I wanted to get back into a startup. I wanted to get back into a smaller company and the right opportunity came along when I was approached by the founders of BUKU. This company just had what I was looking for. Great culture, and a great problem set that we're solving. It had people who are deep industry experts in the shipping industry, and in the e-commerce shipping industry. My role is to come in and help us transform into being a true software player.
Nice! There definitely is a space, particularly with the pandemic. The e-commerce vertical grew a lot when people were working and doing everything from their home. So, in that sense I think the timing is great! But let's talk more about BUKU and what it is that you do. Specifically, that aha moment with the problem that your company solves.
It's a good question, so what we do at BUKU sits in between a brand (A brand is anyone who's selling online) the end buyer for all things related to shipping. We focus on the customer experience level. That's why we've built what we refer to as, an e-commerce shipping customer experience or cx platform. We break it down into two pieces. First, the experience the customer has with the brand as they're buying or as they're checking out. We call it our Checkout CX. So, we are the ones underneath. We make sure that the shopping cart is the source of truth for everything that happens. The first thing is we inject multiple shipping rates and the time frame in which that is going to arrive. If you're like me and forget your anniversary. All of a sudden, you're going to buy something, you get to that last step, and you’ve had the best experience. And there's one shipping option that doesn't tell me when they're going to get it. And you know what I do, I’m out. I got to know when that's going to come! I want multiple choices, so we help the brands provide those choices.
The other thing we do for the brand is we enable them to ship internationally. So, we calculate fully loaded duties and taxes all the way to the end point. Solving a big pain point there because a lot of e-commerce merchants are kind of afraid of going international. And we help them with their compliance and with the regulatory filings. We make international shipping very easy.
Those are the key tenets of our “in the cart customer experience” part of our platform and then what there's what we call Delivery CX. The delivery side is that experience that happens once the purchase has been made. We are building and will continue to build out our platform. But we don't believe it's the right experience to “Hey thanks for your order. I appreciate it. Here's your tracking number.” And at that point you click on the link, and you go off to some garbage website. The experience is just not that great.
We want to continue, in our platform, enabling the brand to provide a customer with a [great] shipping experience. From the point that the purchase is made, all the way through tracking it. Making sure it's guaranteed to get there. Providing the ability to chat with us and initiating a return if that's necessary. Including a lot of other features for what we're building.
Nice! So, even though companies are probably utilizing other companies to fill in some of these gaps in the shipping components, with BUKU it feels sort of streamlined, compatible or as if the company itself was continuing that process.
Exactly! It's an integrated experience instead of a chopped-up experience relying on other people.
I love it! That's an amazing space and an interesting approach to what we're actually focused on today which is… What's the topic of today's show America?
Today we're going to talk about building trust in e-commerce consumers. So, the question is, “how can online retailers create trust and increase brand loyalty?” Could you share with us why you choose this topic?
Yes, so the topic as you said is “building trust of e-commerce consumers” and we chose it because that's specifically the space that we're playing in. That is what we do. We enable and help our brands really establish that trust with the end consumer. When we think about this,
it starts with anyone selling online. I mean first you have to have a great product. That's pretty simple, but there are a lot of great products out there. You also have to have a market that has real pain points to sell that product. But third, the real differentiator, why we chose this is how do you build that trust in brand loyalty? Lots of people have products. Lots of people know there's an addressable market. But this is really what differentiates the haves from the have-nots. We thought that'd be a great topic to talk about.
Well let's start there. Why would you say that trust and brand loyalty are really the differentiators here? Why is that the thing that we should really be focusing on?
Of course, once we have a solid product, once we've learned how to market that product appropriately. What is so important about trust and brand loyalty?
(The steps to doing that you know those are the key pieces that where you can go and actually execute you know you can you know Your product can have a little bit of differentiation but you're all going into the same market. If you can serve that customer better, if you can do things and I’ll go through a couple of them so let me just kind of work through this for a sec so)
First, it's important for a brand to have a personality. Today with the internet and everything it's easy to find widget X. If you're an online brand and you're selling widget X, there's going to be 10 of those. That's a blessing, but it also can be a curse because your product might be a little bit better but at that point you haven't established that.
So given that it's easy for customers to find you, there are still lots of others. It's important to make the brand actually trust you. An easy way to do this is you have to let them know who you are and who your team is.
I like to use an example; we all see it out there, we’ve got a lot of these online influencers. I mean people who make crazy amounts of money endorsing brands and I even have someone here in our company who does very well at this.
One thing that's really interesting is you see a lot of these influencers opening up their own stores because people and sometimes millions and millions of followers they look at that and they say, “I trust anything that person endorses”. So that person now has a store and is selling, and that trust has already been established.
I'm going to point to our clients’ multiple times because that is our culture. We focus on our customers. One of our clients, has done an amazing job. It's the board game called “We're Not Really Strangers". They've done an amazing job developing a brand personality that really makes their consumers feel seen and makes them have a feeling of community. And while it's a simple card game, it's a great card game, but it's turned into a thriving e-commerce store. It's important to relate to your consumers and to make sure they understand who you are and what you stand for. So, that's really the first point is building a personality behind your brand.
I think it's a really great point. The personality that needs to be there. There's this adage and even a statistic like when somebody has a poor experience with that company, they're actually more likely to tell more people than when they have a good experience. I think that it's very important to A avoid bad experiences, and B increase the quantity of good experiences in order to you know protect and create trust and loyalty.
So how involved is shipping in creating trust and brand loyalty? Why, from your view, is this such a strong component of the e-commerce experience?
There are a couple things, so number one I kind of brought up a nice example of when you go to check out. For any brand who's selling online, the decision at that point should be nothing more than, how quick do I want it?
That's really important to have. If it's not clear when they're going to get it and not clear of the transparency of what's going to happen once they click purchase, that is going to lead to cart abandonment.
In addition to having that personality your brand has to have a mission. The reason behind why you're doing what you're doing. I had the opportunity to attend Pattern’s accelerate conference a while back and Kristen Bell was there talking about Hello Bello. Her mission is she wants to get premium products to mothers at a very affordable price. You look at their mission and you look at what they do and the way that they've created their trust. I think that's an absolute great example of having a mission and having a personality in a business. And then establishing that and staying true to what you're trying to solve and how you're trying to help people. When I translate that back to BUKU we have a simple mission. When I look at all our customers, our customers don't want to deal with shipping. Shipping is a necessary evil to them. So, our mission is to enable our customers to focus on their business and not on their shipping. And well it's very simple, it's a very powerful mission that we rally around as a company.
Cart abandonment. I'm curious about that. Do you have any point of references of companies’ cart abandonment rate if they’re using something like BUKU Ship to enhance this experience versus not utilizing something? How are you able to impact that particular number?
It's a good question. We have a whole set of use cases that we'll re-work through, but one really sticks out in mind. I’m not going to not going to give the company name. But they used to provide just the options that were provided from Shopify. With Shopify it was one rate and while it was free, which everybody likes, it still did not have an associated time for the delivery. Their cart abandonment rate prior to us coming in was running right between 35 and 40 percent. We point right to the fact that they weren't setting the expectation when the product would arrive. By working with us, we injected into their car three accurate lanes. One was still free (three to five days), one was expedited (two to three days), and one was an overnight type thing (one to two days).
By just simply providing those choices, nothing else, we took their abandonment rates from in that 35 to 40 percent down closer to 15 percent.
That's significant! If they don’t have those options, they’re going to abandon those carts.
Especially because I think you've got so much work that's led up to even get somebody in your cart and then to lose them at that point is the worst.
Exactly! Imagine that abandonment through peak season! This is why right now is such an important time. We're pounding everybody we talked to right now. Now is the time to make sure that you're doing these things. They're fairly simple to do so that when peak season comes along, you're not having that continued high rate of card abandon.
There was a word that you utilized when talking about this, and that word was accurate. I think it actually makes a nice segue into a a listener/watcher/dojo live fan who actually has a question for you.
This question is from Antonio Zona, and he says, “Hi, I used to work at a tortilla company that shipped from Massachusetts. Most of the extra costs and issues came from when product was loaded and unloaded how do you guarantee tracking and delivery?
So, we established trust. Not only are we in cart with the rates but we work with 3PLs, we work with fulfillment, and work with multiple carriers to make sure that we understand what's happening all the way down through fulfillment, all the way down to the carrier. We know what their SLAs are. All carriers have a specific SLA, but we have something that's strategically different. We have a massive amount of data; we have an artificial intelligence component that looks down into the data set and can actually override the rates that are being injected. We can go and actually look and say, “Hey I know that carrier X typically would deliver into Oklahoma in two to three days. But right now, carrier Y, for a lower price, is actually beating that SLA. So, what gets served up into the cart is a totally different shipping lane if you will. Our data plus our relationships all the way down through the carrier is what enables us to accurately predict all costs and the time that package will arrive.
Wow! Excuse my ignorance here but I'm going to ask you, what does SLA mean?
Service Level Agreement. So, like a carrier will say “Hey, this form of shipping we will get it there no later than 72 hours or no later in 24 hours depending on the price basically.”
Nice! So, what does this engagement look like for you from like a business standpoint. You've got the carriers that you work with, you're accessing their data and utilizing that with your own software and technical know-how to make this better experience for the ultimate e-commerce player. So, your clients are the e-commerce companies? Or are you also clients with the carriers? What does that partnership look like? My assumption here is you're also helping business for your carriers.
You're spot on so our end customer per se actually is the brand. I mean that is the tip of the spear. But our partnerships go down through the warehouses and the 3PLs. Their differentiator and the way that they serve their clients is by meeting their levels of agreement. When they get the orders, they get them picked and packed and put in a box and get a shipping label put on to it in a very quick manner. And that's part of their service. The other service that a lot of the warehouses offer is what the actual carrier rates are. When we talk to these carriers, they're looking for more ways to add value to their customers, which again is the brand. And so, we go to them, and they offer with conjunction with us, our platform. Which then helps them provide more value. It's the same philosophy we have we do with our brands; we make money when our brands make money. We don't charge upfront, we don't charge our brands anything up front. This is 100 percent dedicated to making your business better. Whether that's the brand or whether I’m talking about down through fulfillment and with a warehouse. We want to help them drive more business. And the way they drive business is serving their customer and the way that brands drive business is better serving their customers. It’s perfect.
So, I see how you really fit in what is the proactive side. Preventing shipping problems and more elements and everything before they even start. But we do live in the real world and crap happens. Snowstorms and flooding and flat tires and whatever else. Does BUKU Ship also help on the reactive side if I as a company am not able to fulfill that promise? Are you able to help make that a better experience as well?
Yeah, so there's some really important things here. Go all the way back to the end consumer. The end consumer also is aware that, as you put it, crap happens. They're aware you know there are some things that are on for unforeseeable. What they expect from the brand is they expect proactive outreach. They don't want to wait three weeks and then say oh yeah we did lose that package in that truck that had the fire by the side of the road. They want to hear it from the brand sometimes even before they know it. So, something happened to your package and to provide that superior customer experience, they want to have another package in route to them.
With our Delivery CX portion of our platform we have the ability to actually help our brands provide that better experience for when stuff does happen. We also have the ability to track and alert the warehouse as well.
And there can also be automated responses. Like what about a 15 percent off discount for your next order if something goes wrong? Are you also utilizing promotions in those kinds of reactive elements?
We do. But I’m straddling the line here and I want to be clear. A couple of these pieces our team of developers are still building out. We have the majority of what I've talked about already in our platform.
One thing about that in cart experience is something we talk to our brands about this all the time. If you want to do proactive outreach and if you want to offer those discounts, we provide that ability.
Because we have the actual data, brands can actually make an extra quarter and take what's an expense in their shipping and enable them to break even. Or even start to monetize their shipping if they want.
That then enables them to do more of those proactive outreaches. To say, “Hey look I know your package was delayed a day. Here's a 20 percent off coupon to for the hassle”.
Again, building loyalty with the end consumer all fits right within what BUKU provides
Sorry I just had a delay there because Antonio is really into your talk today and he actually has another question based off of what you just said. He says “That is so cool! Do you have open APIs or develop custom APIs to integrate your platform with other platforms? If we wanted to view order etc. If not do you have some sort of EDI?
Yes, we have the API integration and we do have a nice set of APIs, but it's never good enough. I sit there and push on these types of things all the time, but we'll continue to build upon it every single release to add to that.
Very cool! I can see that what you said sounds simple right? Like, this makes sense, but if you've ever worked in delivery or manufacturing or anything of the sort you know that it is anything but simple.
So, taking it back to BUKU Ship. We're actually in the final minutes of our show today. I wanted to talk about your company a little bit more and the company culture. What is the type of people who work for you to make this happen? Where do you focus your energies and what's the culture that you're building?
Well first of all, no one works for anyone. We work for BUKU. We work for our customers. I’ve been doing this for a long time, and I've been in this industry for almost 30 years. The one thing that's attracts me to BUKU and the one thing that has become so embedded into our culture is that concept of, the more we can help our customers make money, the more we can make money.
That's why we don't charge subscription rates. We don't do it that. A subscription means you're going to pay me 100 or 200 dollars for my service, and we hope your business does great. When you have a transactional percentage of the actual sales that your brand is making, it incentivizes us to make the brand sell more in any way. And again, we're focused on the shipping area, there's great companies like pattern, grove and others that actually help them with that online presence. We help them specifically in that way. We know that if we can help drive sales, it comes into our pocket.
Our AEs also handle all the account management even after the sales done. Why? Because they know if they go back in 30 days or 60 days later, they can see if there is an optimization we could make or add a lane here. And that's going to add x y and z to your customers experience. They're incentivized to do it and it helps the company. So, they remain very much engaged. I think that's just an absolute foundational piece to why BUKU’s has become the fastest growing platform in e-commerce shipping.
Nice! I think the model that you laid out of not being a subscription but a part of the fruit of your labor is really great. And it's interesting to me because there's that extension of trust and brand loyalty not only to their consumers but also your clients, the brands. You're so confident in your job well done that you're willing to bill it that way. I think that speaks a lot for you.
Let's talk a little bit about your people. What do you look for in the people who work for BUKU ship? What's your company culture like?
Our company culture on certain aspects it's not dissimilar to other small companies. I've been in billion-dollar companies, four and a half billion-dollar companies, and then two startups. The thing I love about a startup, and I always repeat this, I'll scrub toilets if it'll help us serve our customers or if it'll help us make another buck. You can't say I can’t do this job. You need to have the ability to either do multiple things at once or the desire to learn something else that may not be specifically in your job description. That's a big differentiator and that's why I love this team so much. Our head of product is an amazing salesperson and we onboarded last month we onboarded 56 new customers. So, we're clipping along at a pretty good rate. A lot of people had to jump in because we did 20 plus of those in the last week. Our CFO was onboarding people, our chief product officer, along with our support people. I'm almost the only one who didn't, and I plan on doing it next time! I felt left out.
I love that! I think you said, this willingness to be able to do something that's beyond what your immediate job description is. But also, the freedom to be able to do that. Which I think is beautiful to have your eyes open and look where can I help what needs to be done and I’m going to own that.
That's one thing we look for in our people. The other thing is a sales focused culture. Almost everybody in our office knows somebody who's selling online. I had a neighbor and they run an amazing athletic wear company here in Utah. I knew you just going up to them how much I could help them. And so, we have a lot of friends that are our customers. It's because our employees and our team go out and says hey. They have that confidence to go out to their neighbor or go out to someone that they really care a lot about. And it's not just a sales pitch, come talk to us, I know we can help you. That sales focused culture all the way through the entire body of the company is an important part and something I'm very proud of.
If you want to be one of your customers, do you need to be a specific size?
Are they Jan selling her jelly down at the corner or more corporate?
We have customers that range from 100,000 packages being shipped out each and every month to customers that might do ten. That doesn't matter. It's so easy to deploy our system that we don't have to have some minimal threshold and we don't charge onboarding or upfront fees. It’s, join up with the BUKU platform and as you sell a small percentage of that passes on to us. But it's realized 10x in the savings that a customer will have.
Yeah, and not just in their savings but in their sales if you're talking about a decrease of 20 in your car abandonment. That's amazing!
One other thing and I kind of missed earlier when I was going through things is the transparency element. Shipping is complicated with; shipping rates, what's happening, who's taking margin where along the chain. It is something that is complicated when people go to find the right person that they're working with to do their shipping. We're super transparent with that because we are a software company. And while we hold some of the best rates in the industry, we're not in this to make money on rates. We're in this to increase sales and make money on the actual software part of our business. We just flat out lay things out on the table for our customers and say look these are the rates we have if you have. If you have better rates let’s, use your rates. Otherwise, if you want our rates, you're going to get them at this cost because we don't have to make money there, we're making our money up here as you sell. And that's another way that we can establish better trust and differentiate ourselves of our customers. Just like an online brand would then do the same as they provide the offerings and the shipping cost to their customers.
Yes, little to no risk at all. I love it. Well thank you so much ken for teaching us your insight, allowing us to learn from you and your tech. As well as how we're able to make customer satisfaction, loyalty, and just the all-around experience a lot better focusing on shipping. We wish you and BUKU Ship nothing but success in the future.
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