Report on International Logistics

In today’s business environment, customer value proves to be among the most crucial aspects for successful businesses. Reputation depends on customers’ experience in most companies, and the logistic industry is not an exception. While it could be challenging for a logistic company to ensure customers’ value at every stage of the logistic process, it has to figure out how to provide the value because customers want a smooth experience. A company that wants to ensure customer value is intact needs to go more from product-oriented to customer-focused. This paper discusses the role of customer service in international logistics focusing on DHL Logistics Company. It will give an overview of the business’s services, explain the aspects of customer value in international logistics, and how improving customer value affects the company’s and customer’s performance.

Overview of DHL Logistics Company

It is a German Company providing logistic services such as package delivery, courier, and express mail services globally. Its shipping services include documents and parcels, air freight, road freight, rail freight, and ocean freight, while the logistics solutions include warehouse, transport and distribution, and contract logistics. It was founded in 1969 and has since provided logistics services across the globe. Regarding customer service, the company has a customer portal login on its website where customers can request any assistance they need regarding logistics. For example, a customer can ask for the shipping of a parcel and some documents through express courier (DHL, 2022). In that case, they need to send an email, read the FAQ, tips, and advice, manage their delivery and billing assistance. Managing the delivery means that the customer can reschedule the delivery, pay customs duties, and track the delivery status. While the company could be striving to satisfy its customers and improve customer value, here are certain aspects that it can apply to ensure enhanced customer value.

Aspects of Customer Value

Customer value refers to customers’ satisfaction in relation to their expected experiences. Often, it is measured in terms of the perceived benefits the customer gets versus the cost the customer has incurred. It could be challenging to satisfy every customer because they could have a different view of what they perceive as value. For example, one customer could perceive time while another could perceive the price. However, a company has to ensure that majority of the customers are satisfied by delivering the value they perceive. Companies need to be all-round when serving customers because if customers are not satisfied, companies lose the business. There are different aspects of customer value in international logistics that DHL and other companies should consider.

The first aspect is time. Time is a crucial factor, not only in the logistics industry but also in every industry. Customers are looking for businesses that can serve them quickly to save their time for other activities (Kotler et al., 2018). Time has always been precious in most situations, and it is not an exception in international logistics. It is even more vital in logistics because most people seek logistics services to save time on their end. For instance, a customer who wants to ship some documents from one city to another will want to seek DHL services because they believe it is fast and easier than them traveling to pick up the documents. In that case, they expect the company to deliver the documents on time so that they pick them up at the expected time to save some time. That means the customer value, in this case, is time, which DHL should meet to satisfy them.

Secondly, reliability is equally a vital aspect of customer value in international logistics. Given that the customer entrusts a company with their goods and services and their money, reliability is among the leading aspects (Cui et al., 2020). It is about a customer trusting the company that it will deliver the documents in due time and the expected condition. The central point is that the customer trusts the company, which is why they seek the services. In the logistics industry, reliability has proven to be one of the leading aspects that customers value the most. Studies have shown that reliable logistic companies make customers feel safer about the services they receive and the condition of the goods. For example, if a customer wants some delicate goods transported, they will feel safer with a reliable company or a company they trust to transport the goods. They will be confident that the goods will be handled with care and arrive in good condition. This adds to the customer’s loyalty, proving that reliability is a customer value aspect.

The next aspect is the price, where customers want prices that suits their needs. In most cases, customers want to be charged lower fees because most of them want to save on the cost of logistics (Cui et al., 2020). For instance, when a customer wants DHL to ship some goods, it is because they do not want to spend a lot of money traveling to pick the goods. Most of them want to save money because logistics companies’ prices may be lower. In that case, the company must ensure that customers get the value of their money. Besides, companies should not charge them too high than they expect. Studies show that customers look for companies that charge low but still provide the same or higher quality (Itani et al., 2019). If customers are charged more elevated prices than expected or the service they receive, they might not see value and are likely to seek the same services from a lower-priced company. However, the prices should reflect the services or goods the customers get. Some services could be worth higher prices while others could not. Customers need to see some value in their prices and the services they receive.

Lastly, flexibility is a vital aspect that drives customer value in logistics. This is in terms of a company being flexible to meet the changing needs of its customers. For example, DHL is flexible in its customer service because it allows customers to change the delivery needs depending on what they want. Customers can reschedule a requested delivery through the portal login, and the company adheres to that. This gives the customer some flexibility in that the company adjusts according to the customers’ needs. When customers receive a service in a manner they want, they find that interesting and of value because the company puts their needs in front. Customer value, in this case, is measured by how much a company can be flexible or customize a customer’s services. Different customers have different needs, and customizing the services adds value.

How improving Customer Value affects the Company’s and Customer’s Performance

Improving customer value through the discussed aspects is not in vain because it has some returns to the company’s performance and the customer. The first way it affects a company’s performance is that it increases revenue. Revenue increases with an increase in sales. When a company makes more sales, it increases its income because it gains more money from customers. Sales are increased by improving customer value, which enhances customer service. For example, when DHL delivers parcels to a customer on time, the customer becomes happy and sticks to the company for more services. Besides, some might recommend DHL to their friends, increasing the company’s sales. The customer service they receive adds value, expanding the company’s revenue. In the end, the company reaps more profits because customers are making more sales.

The second way is it builds the reputation of the company. Happy customers preach positivity about a company (Sözer, 2019). Improving customer value affects the happiness of the customer positively. The customer becomes satisfied because what they expect is fulfilled. For example, when DHL delivers a parcel on time and in good condition that the customer expects, the customer is likely to be happy because the company has fulfilled what they want; it has delivered the parcel on time and in good condition. Such customers are likely to preach positive things about DHL to their friends, colleagues, or family. When several more customers do that, the company’s positive news goes viral, and its reputation is built and improved positively. Studies have shown that organizations strive to satisfy their customers to help build a positive reputation (Teng et al., 2020). This is not an exception in the logistics industry as driving customer value by reaching the threshold they expect boosts a company’s reputation.

Another way is that it improves customer loyalty, which leads to retention. Customer loyalty is one of the top things most organizations strive to meet to retain customers. It means the extent to which customers are devoted to a company’s products and their likelihood to choose that company over its competitors. This does not come easily as a company has to win the hearts and trust of the customers through enhanced customer value. For instance, for DHL to win customer loyalty, it must deliver services on time, with the expected condition and price. With that, the customer will remain happy because the company has met its expectations. Consequently, they become loyal to the company in that they seek its services repeatedly, leading to retention. The company retains them, and this has some direct impact on the company. For example, the company enjoys a good share of the market, increased sales, revenue, and profits. 

The next way improving customer value affects the performance of a logistic company is that it reduces employee turnover. Studies have indicated that employee happiness correlates with customer happiness (Aburayya et al., 2020). Similarly, an organization’s happiness correlates with employee happiness. What it means is that when the customers and the company are happy, employees are happy, and their rate of turnover decreases. For instance, when a customer is happy, they reciprocate the happiness to the person who delivers the parcel on time, who is the employee. This makes the employee happy, especially those passionate and committed in their work. If they are happy, their likelihood of exiting the company is minimal because they are delighted to be there. Additionally, employees like working with companies that have positive reputations and that are making profits. If DHL has a positive reputation, its employees will be proud to work with it, reducing the turnover rate. Also, when a company is making profits from efficient customer service, employees get good pay, increasing their satisfaction and engagement and reducing turnover rate.

Lastly, the most vital way enhancing customer value affects customers is to improve customer satisfaction. While all other points have focused on the organization, this point focuses on the customers. It is every customer’s dream to be satisfied when seeking logistics services. Customers want to get the best experiences besides receiving their products. They want to have a novel experience because shopping and seeking services should be fun. No customer would want to pay more than what they receive or to receive broken or deformed goods. They all want to be satisfied by getting the value of what they expect. In that case, enhancing customer value increases their satisfaction, which is crucial in driving contentment.

To sum up, customer service and improved customer value are essential factors in international logistics. Some of the aspects or drivers of customer value are time, reliability, price, and flexibility. The benefits that companies and customers reap from improved customer value are increased revenue, positive reputation, customer retention, decreased employee turnover and increased customer satisfaction. DHL and other logistic companies need to be aware of the benefits or role of enhancing customer value in their businesses and to customers to reap such benefits. Customer value is not only vital in international logistics but also in every industry that strives to succeed in the current competitive business environment.

References

Aburayya, A., Marzouqi, A., Alawadhi, D., Abdouli, F., & Taryam, M. (2020). An empirical investigation of the effect of employees’ customer orientation on customer loyalty through the mediating role of customer satisfaction and service quality. Management Science Letters, 2147-2158. https://doi.org/10.5267/j.msl.2020.3.022

Cui, R., Li, M., & Li, Q. (2020). Value of High-Quality Logistics: Evidence from a Clash Between SF Express and Alibaba. Management Science, 66(9), 3879-3902. https://doi.org/10.1287/mnsc.2019.3411