UPS or FedEx: Which Company Is Best at Keeping Its Customers Loyal? - Motley Fool
Why customer loyalty matters to the parcel delivery industry
Sectors that are a veritable duopoly, such as parcel delivery, may not seem like a business where a high emphasis on customer engagement and loyalty would come into play. However, with digital technologies weighing on the need to send mail and packages in the first place, both companies' margins are under constant pressure. There's pressure to "outgrow the other guy," while also maintaining margins through price increases. Unfortunately for FedEx and UPS, they can't simply raise their prices to their hearts' content because they would otherwise drive away their core customer. Thus is born the balancing act between going the extra mile for the customer and growing their business.
Therefore, both UPS and FedEx attempt to court customers with attractive but consistent pricing as well as instilling the "delivery guarantee," which is so important to the consumer. Through physical stores that are easily accessible and scattered throughout the world, these parcel delivery services have a better chance at proving their dependability and convenience to the customer and being able to pass along what are inevitable price increases in the future without losing this sorely needed source of cash flow.
In other words, without loyal customers, FedEx and UPS would be in big trouble.
Why customer loyalty matters to the parcel delivery industry
Sectors that are a veritable duopoly, such as parcel delivery, may not seem like a business where a high emphasis on customer engagement and loyalty would come into play. However, with digital technologies weighing on the need to send mail and packages in the first place, both companies' margins are under constant pressure. There's pressure to "outgrow the other guy," while also maintaining margins through price increases. Unfortunately for FedEx and UPS, they can't simply raise their prices to their hearts' content because they would otherwise drive away their core customer. Thus is born the balancing act between going the extra mile for the customer and growing their business.
Therefore, both UPS and FedEx attempt to court customers with attractive but consistent pricing as well as instilling the "delivery guarantee," which is so important to the consumer. Through physical stores that are easily accessible and scattered throughout the world, these parcel delivery services have a better chance at proving their dependability and convenience to the customer and being able to pass along what are inevitable price increases in the future without losing this sorely needed source of cash flow.
In other words, without loyal customers, FedEx and UPS would be in big trouble.
