Shipping Insurance: The Post-Purchase Strategy That Improves Customer Experience

As a consumer, there is no greater disappointment than when something goes awry before you even get the product you ordered. Whether the package is lost, stolen, or damaged, it leaves a bad taste in your mouth for the company you ordered from.  

This is something to pay attention to. The #1 reason an ecommerce consumer will leave a bad review is as a result of a bad shipping experience.  

The post-purchase experience is often one of the most overlooked aspects of building long-term relationships with customers. Adding shipping insurance is one of the most effective ways to improve your customer’s post-purchase experiences. Below we break down what is included in the post purchase experience as well as specific ways that shipping insurance can help you build customer loyalty.

What is the post purchase experience?  

The post-purchase experience is simply any interaction a customer has with a business after they have placed their order with that company.  

Marketing campaigns often focus on attracting new customers and not on retaining those customers and building loyalty. Retaining customers is easier than acquiring new ones and the post-purchase experience is key.  

What does the post-purchase experience include?

The post-purchase experience can include a variety of activities including follow-up or thank you emails, updates about an order, and information about how to use their product.  

Guaranteeing the safe arrival of a customer’s products is also part of the post-purchase experience. During the pandemic there was a boom in the ecommerce market which, unfortunately, brought with it much higher instances of lost, broken, and stolen goods. Below are some stats on how this affects businesses:

• Porch piracy: There were 210 million reported instances of packages being stolen off recipient's porches in 2021. That equates to more than one package per household in that year alone.  
• Reputation: 72% SMBs have received negative reviews because of lost, damaged or stolen packages
• Retention: 37% of consumers will not buy from a SMB when a negative shipping experience happens

Shipping insurance can be the safety net an SMB can rely on to avoid negative impressions when shipping goes awry.  

How does shipping insurance help the post-purchase experience?  

Let’s start with a definition. Shipping insurance is a service which reimburses senders for parcels that are lost, damaged, or stolen. This is often an optional service provided by most carriers and reimbursements are based on the value of the goods within the parcel and the associated shipping costs.  

Shipping insurance can improve the post purchase experience in several ways. The most important benefit is peace of mind for an SMB. If a shipment does not arrive to the customer or is damaged along the way, the SMB knows that they can fix the problem without incurring a loss on that sale.  

The second biggest benefit of shipping insurance is the flexibility offered with some products. An industry leader in this flexibility is UPS Capital InsureShield. InsureShield offers extremely flexible products. Protection can be applied for all shipments, to certain high-value SKUs, or for certain carriers only. InsureShield covers the full value of the package and pays out 95% of claims, without hidden ‘gotchas’ that many companies use, like waiting periods before filing a claim or claims expiring. Knowing this, and the fact that InsureShield also covers the cost of shipping, allows you to respond quickly to customer feedback when they experience problems, sending out replacement packages without looming costs.  

Finally, shipping protection can sometimes be integrated directly into the WMS or ERP software your company already uses. ShipCaddie TWMS has partnered with UPS Capital to offer InsureShield protection directly through the ShipCaddie interface. Meaning, you don’t need additional software, and you don’t have to spend countless hours going through the disparate filing processes on each carrier’s website. You can even create custom business rules on ShipCaddie to automate which shipments you would like the insurance to be applied to, saving you big on time.  

No one wants to think about their customers having a bad impression of their company. Unfortunately, shipping woes happen-and those woes can damage your reputation. Adding shipping insurance to some or all your shipments is one of the most effective ways to create a safety net for yourself and your customers. We are proud to partner with UPS Capital InsureShield and applying protection to your packages is extremely easy to do through the ShipCaddie interface.  

If you would like to learn more about how shipping insurance can improve relationships with your customers, listen to industry experts Glenn Gooding, President of iDrive Logistics, and Eduardo Lopez-Soriano, Vice President of Marketing at UPS Capital on the latest episode of the Tee Up: Logistics Insights podcast. All statistics in this article were sourced from the insights provided by Mr. Lopez-Soriano on this episode. The podcast is available on Spotify, Apple Podcasts, and more.    

If you would like to speak to iDrive Logistics about InsureShield products, reach out here on LinkedIn or through our website.