Big retailers like Amazon have trained customers to expect free shipping, or at least a low-cost economy shipping option. When choosing shipping providers for your own company, should you go with the lowest-cost provider? Probably not, and I’ll explain why.

In most cases, the cheapest shipping option will be the US Postal Service. But even if you pay for their delivery confirmation service or something else that sounds like tracking, every shipment with the USPS is basically a giant black hole until it either arrives or is declared lost. Third-party services that use the USPS for part of the delivery cycle (such as FedEx SmartPost) have the same problem. So if you ship packages with these USPS services, that means that customers won’t be able to get accurate tracking info.

Who cares about accurate, real-time tracking? A whole lot of customers and prospects. Whenever I buy something online, I try to avoid retailers who ship only with the USPS, and I’ll always choose UPS or FedEx for more expensive or fragile items. I’m sure some percentage of the overall online buying population feels the same way. And even if a customer doesn’t know any better before they place their order, and they choose the USPS option, they’ll be quite upset when they try to track it and get a bunch of nonsensical messages for days or weeks after the package was sent.

There’s a better way to deliver low-cost shipping without sacrificing customer acquisition and retention. Just pick the most affordable carrier that has real tracking data, like UPS or FedEx, while avoiding services like FedEx SmartPost that hand packages off to the USPS. Ship everything (or at least all your domestic shipments) with that carrier, and be aggressive about asking for discounts based on your growing shipping volume and loyalty. Over time, you should be able to get rates that rival the USPS. Meanwhile, make sure to let customers know that you’ve chosen a high-quality shipping option that lets them track their order every step of the way, rather than turning shipments into a guessing game like your competitors may be doing.

Suppose that you’re a typical online retailer, and your official policy is to ship orders in 24-48 hours. Sure, you try to get the product out the door as fast as you can, but you don’t guarantee any exact turnaround time for shipping a given order.

Now, what if a customer says they really, really need the product immediately, and they’re willing to fork over the money for overnight shipping and even a “rush” fee? Is this something you should consider doing on a one-time or even company-wide basis? There are several aspects to consider:

– Are you physically able to process the rush orders that much faster, e.g. all rush orders received by 2 pm will ship out that evening?
– Can you charge enough in rush fees to make up for the extra stress on your staff, along with the inevitable customer service calls from people demanding the latest status on their rush purchases?
– Will the benefits (to customers and your bottom line) make up for the small number of people who pay for the rush fee but don’t get the order on time, and then make it their personal mission to tell everyone how much you suck?

Given these complexities and pitfalls, most retailers are probably better off without a rush order option. In fact, the only company I can think of that offered rush orders was Newegg, though I don’t know if they still do it anymore. In general, you’re better off investing in good systems and practices that let you fulfill orders quickly and predictably for all customers, rather than trying to segment orders into two or more classes and dealing with all the resulting hassles.

For most customers, the whole point of a user forum is to provide a place where they can get questions answered and share tips with other users. There are several ways to make this happen:

– Get so many customers using the forums on a regular basis that virtually every question gets answered by the community.
– Have your staff participate in the forums at least two or three times a week, with the goal of answering all of the questions that others users could not.
– Employ a combination of the two approaches above.

It amazes me to see big, well-staffed companies pushing customers to use the forums, while refusing to dedicate the necessary resources to make the forums useful. There’s nothing more discouraging than finding that someone else has already posted the exact same issue that you’re experiencing, only to see it marked as an “Unanswered question”. When I see a forum riddled with threads like that, it’s a clear sign that I need to look elsewhere for assistance.

Earlier this week, the frame from my glasses snapped in two. Without a spare pair to use, I was forced to clumsily tape the frame back together while waiting for new glasses to arrive. My lack of proper planning aside, it’s really incredible how spectacularly a pair of eyeglasses can fail. In fact, I would bet that 75% or more of all glasses issues result in total failure. The frame snaps, the lenses won’t stay in, and the product is totally useless.

What if other products failed like this? The world would be riddled with disasters just waiting to happen. For instance:

– When your car broke down for something minor, the entire engine would go up in flames.
– After your cell phone dropped a call, it would delete all your contacts and then make expensive international calls without your consent.
– As soon as the filter in your air conditioner got filled up, it would blow all the collected dust and other nasty stuff right into your living room.

Granted, these are highly stylized and somewhat ridiculous examples. But why do we put up with total failure in eyeglasses? Seems like every pair ought to include a repair kit to fix broken frames, loose lenses, and more. Of course, if eyeglass makers rely on a steady stream of minor disasters to create a hefty amount of repeat business, they’ve got no incentive to make things any easier for customers.

Let’s say you sell a product that consumers usually buy in batches of two. Your store starts with five in stock. Someone comes in and buys two units, leaving you with three. Then someone else shows up and takes two more. Now you’re down to one unit left, and it sits there untouched for months.

Did customers suddenly become less interested in the product? Or, did they stop buying because one unit is useless by itself? In my hypothetical scenario, it’s obvious that the quantity — and not the product itself — is the issue. But what if you didn’t start with that key tidbit of information? Chances are you’d conclude that the product had become irrelevant, and never order more.

Clearly, this is a very simplified anecdote. But I bet this type of situation happens all the time. After all, how attractive is one little bag of “Coffee A” going to be when shoppers like to stock up on three or four at a time, and “Coffee B” is piled high on the next shelf? The whole point here is that the relationship between inventory and sales isn’t simply black and white. Just because something is in stock and not selling doesn’t mean that consumers aren’t interested in the product. Instead, they might just be looking for more of that item than you’re carrying at the moment — meaning that replenishing your inventory would be the best way to jump start your sales.

Whenever you add a feature or attribute to a product, there’s a good chance that the new addition creates an unintended consequence or cost. For example:

– Smaller gadgets are easier to carry in your pocket, but also easier to lose.
– Latex-based paint is water-soluble for quick clean up, but will show ugly streaks if you get water on the walls.
– Flat-packed furniture (think Ikea) is cheap to ship, but a lot more time-consuming to put together.

Arguably, the benefits of these features outweigh the costs. But that won’t be true of every possible feature. So the next time you’re thinking about adding a new feature to one of your own products, make sure you consider the hidden costs of that feature as well.

Returning holiday gifts can be a real drag. I ran into this problem first hand when I needed to exchange a few items from a small, online-only retailer. Without the option of going to a local store, I contacted the website to ask what the options were. They didn’t have any method for processing returns online or even a printable form for requesting the exchange, so I had to type up a letter explaining what I was returning and what I wanted instead, complete with a manual calculation of the amounts and shipping costs. In all, the process probably took me an hour longer than it should have.

Who buys gifts from this type of store? I don’t pretend to understand their whole customer base, but I’d guess that on average, their buyers aren’t very web-savvy. These individuals aren’t trained to think about the hassles of returns and exchanges — and the impact that their vendor choice has on the gift recipient. So, I thought I’d share a few tips for people who are fairly new to buying gifts online:

– Use a major retailer like Amazon.com that makes returns easy and painless.
– If you absolutely must choose a smaller retailer, be sure that they have an easy return process. Generally, this means you can request the return online, and the retailer provides a prepaid label that you just tape onto the box.
– When in doubt, buy from a company that has local stores in the area where your recipients live, as long as they allow for online purchases to be returned in the stores.

Come to think of it, these tips aren’t just useful for consumers who are trying to choose between several places to make a purchase. In addition, they’re a great way for retailers to attract more first-time online buyers. Even if novice buyers don’t come to the website with returns and exchanges in mind, it certainly can’t hurt to show them that your store makes those transactions easier than the rest.

Earlier this week, I went to get the long-awaited vaccination for the swine flu. I’m already a registered patient at the doctor’s office that I used, so I figured the paperwork would be minimal. Sure enough, I just had to fill out one form with my name, date, etc. But when I brought it to the counter, they couldn’t read what I wrote, and asked me to spell the name again.

For me, this experience was quite embarrassing. Suddenly I was “one of those people” who are too sloppy to write things clearly. What happened here? I assumed that since all my info was in the customer database, there would be no need for them to read and re-type my name. In other words, there was no logical reason why I needed to be extra careful with how I wrote out my name and birthdate.

As it turns out, the office takes the form and uses it to look up your info in the patient database. If there’s anything illegible on there, they can’t locate you. That last part gave me an insight: if you want people to print clearly, or double-check something, or whatever, just tell them why you need them to do so. For example, a form at the doctor’s office might say: “Please print clearly — if we can’t read your name, we won’t be able to locate your records in our system, and you’ll have to wait longer before seeing the doctor.” By giving a reason for the desired behavior — one that people can understand and relate to — you’ll be a lot more likely to get the result that you’re looking for.

If you’ve ever tried searching for something on Flickr, you may have been inundated with dozens or even hundreds of photos that were taken by the same person. In my experience, this happens when someone takes a ton of pictures at a concert, trade show or company gathering, and then tags them all with the same keywords. If your search matches those keywords but you aren’t interested in that person’s photos, it can be tricky to get past the virtual roadblock that the pictures create on the search results pages.

In Flickr’s case, the obvious solution is to limit how many results are shown from the same user. Most web search engines set this cap at two results per website, but maybe five or ten makes the most sense for image searches. Either way, common sense dictates that there ought to be a cap.

Generalizing this a bit, if you have enough information to be able to tell the origin or author of the documents in a given dataset, then you should set a hard limit on how many entries from the same source that you show at once. In doing so, you’ll make the search results more diverse, increase the chance that users find what they need, and reduce the frustration that comes from seeing nearly identical results over and over again.

I recently heard that something like 97% of bank robbers are caught within a week after the robbery. This makes me wonder: what percentage of would-be robbers are actually aware of this stat? If more of them knew how bad their odds are, would the number of robberies go down?

I’d be very curious to see what would happen if banks decided to put up theft deterrent signs. Just print up signs that say something like this: “Thinking of robbing this bank? There’s a 97% chance you’ll be caught and end up in jail.” Maybe this isn’t the traditional way of reducing crime. But perhaps that’s all the more reason to give it a try.