Questions we will focus on.
How has route planning helped companies scale?
How will this affect my bottom line and profits?
There's a tremendous amount of data from enterprise companies like Amazon, FedEx, UPS, and UberEats that show the benefits and potential drawbacks of route planning. We're going to bring a few of those studies into this article in bite-sized portions. Let's dive in.
How has route planning helped companies scale?
There are a few factors to consider when operating a delivery company- one of which is how to scale effectively and how to care for customers while scaling. Both of these go hand in hand, the more you take care of your customers the more positive reviews via the internet and word of mouth happen.
A route planning software should not only plan effective routes for your drivers but also keep the customers in the loop and in control. Giving customers the option to update delivery notes on delivery day, receive text notifications, and receive shipping links during with accurate ETA's is a massive aspect to ensure they have a good experience with your brand. Your delivery process is an extension of your brand and product, in the consumers' minds it's all connected.
We worked with a client called MealShip which scaled quickly over the course of 6 months, growing 70%-97% each month. They didn't have the time to hire great employees who would take care of their business the same way they did. At the same time, they were spending 3-4 hours each day on the phone with customers asking about their orders and order status- and those hours were just increasing. It was scale or bust.
MealShip opted into route planning to solve the customer issue. From 3-4 hours a day to under 20 minutes. How? Customers receive texts on delivery day, get shipping links to be able to see their driver on the route and ETA's, and have communication with the driver (1 way texting to update delivery notes).
But more happened- drivers stopped calling in asking for delivery notes or addresses, and deliveries finished faster reducing the cost of hourly drivers and allowing more deliveries each day. MealShip saw a bump in customer retention by 17% by making 1 change.
Let's take a look at the Amazon, FedEx, and UberEats stories. Amazon and FedEx both spend hundreds of millions of dollars in research and development when it comes to delivery efficiency. Their areas of focus shifted year to year, in 2017 they focused on end-customer relations (i.e shipping links, ease of use, clear communication, etc.). 2020-2023 is focused on delivery speed and optimization. Amazon has seen growth rates of over 110% in cities they have implemented their new route planning technology.
Looking into UberEats and Uber. Uber is playful and feels more like a game than a service. It's fun to use. You can see the little car approaching your location, and that creates...? A little excitement. Research done by the University of Arizona shows a dopamine spike equivalent to hitting 4 green lights in a row. That's what your shipping links need to do for your customers! Let them be excited about your brand and delivery.
How will this affect my bottom line and profits?
Driver expenses can get out of control, the more you grow the more money leaks from the bucket. Some drivers can be dishonest about their location, how many breaks they take, and if they take the scenic route (not talking about your drivers of course).
But even with a great delivery team- routes can always be created to run faster. On a delivery day with 80 stops and 3 drivers, times can vary by 2-3 hours. Optimized routes matter. If you pay your drivers hourly, you save money. If you pay them a daily wage, they'll finish faster and be happier.
Happy drivers- that leads us to driver turnover rates. A few quick notes of why drivers leave companies. 93% of Male drivers say they would leave a delivery job if a competitor could pay more. 82% of Female drivers say they would leave if a competitor had a better company culture that met their lifestyle and personality. Giving your drivers faster routes and the tools to finish the routes without frustration will help driver retention.
Customers that are pleased with your entire operation of delivery, product, and customer service will stay with you longer in a world filled with mediocrity. On average our customers see a bump of 13% in customer retention the same month they join Fleet55. I'm not saying you need to use our software, just think of using some type of software.
Expect delivery expenses to reduce by 15-20% first month, and 17-22% in the second month.
Ending Thoughts
Chances are some of your competitors are using some type of route planning software and they are taking care of their customers with ease, and their customers are delighted.
Every software is different, find one that works for you. Just don't get bogged down with busy work when it can be automated.