Dealing with backorders and pre-orders 😵‍💫

Hi Readers!

It’s been a busy week, but a great one full of wonderful vibes!

We finally kicked off our JRB community after a whole lot of customer convos. We’re calling it JRB Roadies, and it’s in beta for now.

We’ve been getting closer to kicking off our surprise and delight initiative, which I am very eloquently and creatively calling JRB Moments.

I’ll be sure to share periodic updates as we build out these two programs. In more personal news, I’ve eaten more candy than any grown man ever should.

For all those that recently joined: Hi, and welcome!

Thank you for taking time out of your busy schedule to learn about CX and Retention, two topics near and dear to my heart.

It means the world, and I’m thrilled you are here. 💛

Now let’s get into it.

This week, I’ll be chatting about out-of-stocks, delays, pre-orders, and similar terms that make us operators break out in hives.

I’ll walk you through setting expectations, tips and tricks to address delays thoughtfully, and as extra credit, ways to get ahead of some of this.

I'll discuss:

This newsletter is brought to you by my friends at Cogsy, the extra Head of Operations for DTC brands used by folks like Caraway, Lalo, Doe Lashes, and more. More about Cogsy in a bit!

1. Luggage Laments - My foray into CX and how I dealt with it:

My first real job was at a Luggage brand that started on Kickstarter. When I joined in 2016, two years had passed since their 2014 campaign. They had 1,600+ backers in 64 countries, almost all of whom were very frustrated and angrily demanding a refund of their combined $433,684.

The kicker? All the funds were used for R&D and production, with the rest set aside for shipping.

Whether I agreed or disagreed with how this was being handled, I was hired to fix it.

As a novice who had never done any sort of CX before, my hypothesis was quite simple:

People do not come to Kickstarter to buy cool shit, they can visit their local mall—or Amazon—for that. Kickstarter customers are excited by the prospect of backing an idea from its inception. They want to feel like they are part of the creation of the product and brand.

To put it mildly, customer updates until I joined were murky and contradictory at best, untrue at worst. Customers smelled through the shadiness and were understandably nervous the project wouldn’t pull through to completion.

My proposed solution: Be overly straightforward. Like to the point where customers ask, “Did they really just share all of that?”.

Here is the first update I shared with customers.

Subsequent updates were consistently thorough and super transparent, so customers felt like they were getting an investor update, not a list of excuses.

Until the “production complete” email, we spared no details and added photos and videos to ensure customers were in the loop.

Granted, this is a pretty severe case, but here is what I learned about dealing with delays and pre-orders: 

a. Transparency: Earning a few extra bucks at the cost of a customer's negative experience is virtually never a win when you factor in a customer’s potential lifetime value (LTV). Being transparent about basic things like “is the product even in stock” is more important than you think.

I’ve seen brands do an outstanding job selling pre-orders by setting proper expectations.

Supply is an excellent example of selling on pre-order but setting expectations and delivering on what you’ve promised. They mark out-of-stock products as pre-order, in very large letters on the actual buy button, and disclose the shipping date right above it.

From what I’ve heard through the grapevine, they’ve hardly seen a decrease in conversion on that page, and I’d bet those customers will have a high LTV if Supply delivers on expectations.

The opposite of that is vague wording or small print in the corner of the product page. As you can imagine, it has the opposite results.

The more transparent and proactive you are, the better your chance of creating brand promoters, regardless of the product.

b. Over-communicate: My luggage saga is an excellent example of how you can turn around brand perception by over-communicating. Heck, some of the customers who hated us the most aggressively in 2015 ended up repurchasing the Fugu v2.0 in 2018.

Maintaining constant communication with customers while you hold their cash and they still haven’t received the product is just common decency.

One important caveat: Don’t send sales emails.

One more time for the folks in the back: NO SALES EMAILS.

I recently ordered an air freshener from a DTC brand many folks rave about. It was marked as a pre-order with 6 week lead time (separate discussion if that should even be a pre-order outside of Kickstarter).

Right after my order, they reached out, saying they would keep me in the loop. I received a weekly email from them checking in, and I kid you not, just about every week, they were selling something. Upselling, cross-selling, you name it.

It was brutal. 1/10, do not recommend.

c. Set Expectations: I’ve seen brands set wildly overoptimistic expectations far too often, especially given current supply chain snarls.

Is it exciting to tell customers you are “almost back in stock”? Certainly.

However, I bet you don’t want to be the one answering that email 4 months later when you are still OOS with no final back-in-stock date.

Instead of setting expectations very high and then failing to satisfy them, I’d advise brands to set moderate expectations and pleasantly surprise the customer by beating them.

2. Should you mark it as sold out or continue selling as a pre-order?

This question is almost as common as “should I outsource my CX,” but with a less definite answer. 😏

I’ve seen brands sell items as a pre-order and do it quite well, and have seen others fail miserably. The difference between the two is usually pretty straightforward.

One keeps the customer front and center. One doesn’t.

In simpler terms, are you selling an item that does not exist so you can book more revenue this month? Or are you trying to satisfy customer demand?

By properly setting expectations and keeping your customer in the loop, you can easily create a solid backorder experience.

I asked the hivemind on Twitter: “What was your fav pre-order experience?” Here is one response I got:

Communicate well, and a message from the CEO (!) never hurts. 😏

3. Tips and tricks to stay ahead of the curve on all things stock

Not going to lie even a bit; staying in stock has been a hurdle at Jones Road. Bobbi has famously gone viral on TikTok quite a bit this year, and we’ve sold a lot faster than anticipated… on almost all products!

We’ve hired out a solid supply chain team with a veteran COO and demand planner, and have slowly started getting better at staying in stock. 

One way brands can easily stay on top of their demand planning is by using Cogsy.

Cogsy tracks historical inventory levels from day one to forecast future demand to ensure you are not going out of stock and losing customers.

I highly recommend checking them out here. 

Many DTC brands of all sizes leverage Cogsy to keep track of inventory and predict both out-of-stock dates (keeping ops teams informed)  and back-in-stock dates (to share with their customers).

For example, a brand’s marketing team can add events like sales and promotions to get an accurate demand plan to avoid out-of-stocks. Their CX team has access to product scarcity and availability (whether backorder or not), allowing them to answer customer questions with much more specificity.

Put simply, Cogsy aligns functions across your brand around the status of your supply chain, allowing your teams to provide a seamless, frustration-free experience to your customers as you scale.

Brands like Caraway and Lalo have grown at a hectic pace while staying in stock, thanks to Cogsy. Lalo grew 400%, and Caraway a blistering 20x growth,  both while using Cogsy to manage their inventory.

Aside from demand planning, here are some tactical tips and tricks if you do sell out:

a. Mark the product as is: If you have not transitioned your product page to “backorder,” mark it as “sold out” as soon as possible. Whichever choice you make, make sure your customers are aware of what they are getting themselves into. Fun fact: Cogsy automates marking as OOS/Pre-order based on your own rules, and also is able to automatically set back in stock because it keeps track of how much stock is allocated to fulfilling backorders.

b. Back in stock notifications: If you mark it as sold out, keep track of folks who would love the product when it’s back!

We use an app called Back In Stock which is very cheap (even free for small stores) and straightforward.

We had a 20k person list for our Mascara which helped us sell out quickly when we finally brought it back. 🙃

It’s a great touch and can easily delight customers and get extra sales when you are back in stock.

c. Give your customers optionality: What happens if you (unfortunately don’t have Cogsy and) mistakenly oversell a product?

I’ve seen brands go ahead and refund all those orders.

I’ve seen others put them on a waitlist and let them know of that.

IMHO, both of these are wrong. Give your customers the option to choose. 

Send them a plain-text email explaining exactly how this happened, and write out their options.

Something like this (sweating writing this).

That wasn't too bad, was it, Eli?

Hmm, maybe it was because I was temporarily living out my dream as a cookie purveyor….

For installment three of CX Chronicles, I’m excited to feature Michelle Razavi, Founder and CEO of ELAVI.

ELAVI is a modern wellness brand that provides delicious, functional snacks infused with sustainably sourced collagen, plant protein, and antioxidant superfoods.

Let’s hop right on in.

1. What’s your philosophy on CX?

People buy from people. Humanize the experience as much as possible and take care of your customers like you would your friends. 

When we started out, a lot of our customers actually were our friends. And then their friends became our customers too. We wrote handwritten notes thanking customers for subscribing, made personal home deliveries if they lived nearby, responded to customers via Instagram dm's if they preferred that over email, responded on evenings and weekends if they needed urgent support, and prioritized a frictionless experience for them.

For instance, if they wanted an order changed and didn't want to log in to their portal, we would manually do it for them. Some of our older customers preferred to order over the phone (lol) and provide their credit card info, with us processing their order like a 90's mail-order company taking orders off its catalog.

Was it extra work on our end? Sure. Did they appreciate the white glove service and stay with us longer? Absolutely. 

We still do many of these things whenever possible, as it makes us stand out among other brands. Until recently, we would personally respond to support emails and customer dm’s.

It informed us on how to enhance the customer experience (e.g., areas to improve on our website, optimal fulfillment strategy, ideas for flavors/bundles, etc.). Also, it helped us build trust and empathy with them. 

2. What’s your fav Elavi CX story? 

A little while back, we got a pretty nasty message from a customer demanding a refund and threatening to do a chargeback if we don't. She was upset about the natural oil separation in our bars and wasn't a big fan of the taste. We list clearly on our website that we don't provide refunds, but we planned to make an exception.

Now, we could have just sent an email apologizing, quickly giving her a refund, and moved on. But I figured, "You know what? Let's offer her something more."

We emailed the customer back with extreme empathy, provided our personal phone number, and asked if she'd like to hop on a quick call as we'd love to understand her experience and make things right.

A few minutes later, the customer called us, and we took notes on her experience and offered her several options to ensure she felt taken care of. The tone immediately shifted, and over the course of 30 minutes, she asked about our founding story, loved that we were women-owned, and thanked us for taking the time to speak with her. I thought, "Hey, she might not like our products, and that's okay.” “At least her experience with us will be positive, and she'll tell her friends about it."

The call ended on such a lovely note, she said she didn't need a refund after all, and we earned ourselves a brand evangelist. 

This is my favorite story because it shows that there are humans on the other side of every transaction and that there's always an opportunity to turn things around. 

Discount: ELIFAM10 for 10% off sitewide.