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Ethan Cohen
VP, Ecosystem & Community @ Yotpo
November 29th, 2021

How to Communicate Supply Chain Limitations to Customers

The worst of the supply chain crisis is over, but brands will need to navigate lingering issues going into the holidays.

Table Of Contents

As we head into the holiday shopping season, there’s some good news for brands on the supply chain front: the worst of the crisis seems to be over. But, lingering issues like materials scarcity, rising freight prices, and port congestion are expected to still cause challenges for brands throughout the holidays.

Despite problems with the supply chain, consumers still have expectations about purchasing and receiving their holiday goods on time, and brands that fail to deliver on those expectations will lose customers. This presents a challenge for brands, as most stock and delivery issues are out of their control. The solution? Build and retain customer loyalty through transparent communication.

Using tools like email marketing, SMS communications, customer help desks, and loyalty programs, you can turn the odds in your favor and help ensure your loyal customers stay loyal, even when the supply chain is disrupted, and product availability is sparse.

Why transparent communication matters

If customers can’t get the products they want when they want them, why wouldn’t they just go somewhere else? The answer lies in customer loyalty and trust.

Building ethos and rapport with customers is key to ensuring satisfaction and retention. Transparent communication serves this purpose by reaching customers at a personal level, by signaling to them, “We appreciate your business, value your time, and don’t want to disrespect your needs.” In so many areas of life, people would rather interact with other people than faceless organizations.

By reaching consumers where they are most active, personalizing communication, telling them plainly what is going on, and offering alternatives to engage with your brand, you signal that your company is human — and that you value the presence and attention of your customers outside the point-of-purchase. Authenticity is important to consumers — being honest about issues boosts trust in your brand.

Conversely, if you don’t communicate with your customers, you risk implying that their needs and wants (and continued loyalty) do not matter. If products are out of stock or orders aren’t delivered when you say they will be, this can read to customers like a mix of apathy and incompetence on the part of your brand.

Again, it’s a matter of brand trust; according to a 2019 Edelman Survey, trust is necessary for 81% of customers planning a purchase. Moreover, the more “necessary” your product is, the more intense this effect (and its fallout) can be. To borrow a term from dating: don’t “ghost” on your customers.

How AVEC kept customers engaged through restocking issues

Better-for-you cocktail mixer brand AVEC — one of six brands in the Yotpo Grow incubator program — ran into a problem of getting too popular too quickly; they saw rapid exponential growth and promptly ran out of stock.

Being so in demand that you can’t keep up with sales is a problem many brands would love to have. Nonetheless, it is a problem that AVEC needed to solve, or else they would lose their momentum, along with would-be customers.

AVEC had no control over the restocking lead time, so instead, they focused on transparent communication with customers. They diversified communication methods, using social media, newsletters, email, and SMS to reach customers where they were. When products were back in stock, they sent notifications through these communication channels to patient shoppers, and AVEC only focused on selling what was actually available at the time.

The brand made the most of the “down-time” by developing relevant content that kept customers engaged, even when the products weren’t readily available to purchase. At the core of all of this, AVEC maintained transparency about what was happening and how they’re working to resolve stock issues, highlighting that real people with real limits run their brand.

4 tips for transparent communication this holiday season

So, how can you make sure you’re using transparent communication to retain your customers?

Here are a few tips.

1. Always strive for honesty

If you can’t meet a customer’s expectations, either because of issues with stock or shipping, let them know as soon as possible. This is especially important during a time-sensitive period like the holidays. And set those expectations realistically — don’t promise that your product will arrive within an unrealistic timeframe.

2. Use all of your relevant communication channels — especially SMS

Make sure you’re using all communication channels at your disposal. This includes email newsletters and back-in-stock messages, like AVEC used, but it also includes SMS. The reality of D2C sales in 2021 is that the traditional “linear” path to purchase no longer exists, and business-consumer communications need to keep up with the times.

SMS is ideal because it reaches consumers where they are most active. The average SMS open rate is 98%, with 90% of those messages being read within three minutes of being received. SMS provides a direct and immediate line of communication that allows brands to tell customers when products are in stock, communicate updates about shipping and delivery, and request feedback so you can gauge whether you’re meeting their expectations.

3. Offer something in return for customers’ patience

If you know that shipping or restocking is going to be delayed, offer customers a reward for their patience. Rewards could be extra loyalty points, free shipping, free gift wrapping, discounts on future purchases, or other incentives.

4. Keep customers engaged while they wait

If customers are waiting for items to come back in stock or for orders to be delivered, keep them engaged in the meantime with updates, relevant content, and loyalty points.

Loyalty programs are an effective tool for customer engagement and retention. In fact, 79% of consumers say loyalty programs make them more likely to continue doing business with brands, and this comes down to the sense of personal value customers feel through their interactions with brands.

Periods marked by supply chain challenges can be difficult and discouraging, but they don’t have to be disastrous. By leaning into transparent communication and connection with your customers, you can ensure your brand pulls through, and that your customers come along with you.

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