With technology available to entrepreneurs these days, anyone can start a delivery company quite easily. Before we founded Swift, we started delivering beer on bikes for our first start up, www.liquorun.com. However, after the first month of hustle, we started to grow faster than expected. The demand for our service put our processes and systems (all manual at the time) under a lot of stress and we needed a clear strategy to scale our operation. The idea was to try and remove as many of the manual processes by implementing a delivery / fleet management systemised process.
Looking back, here are 9 things to consider that were incredibly important to scaling our delivery business
1. Dynamic Pricing
Paying a fixed fee per delivery did not always ensure reliability on our platform. Drivers would get picky over longer distanced jobs and it only works if you limit your delivery radius but then that limits your scale so we suggest a dynamic pricing structure to cover larger areas, compensate drivers and ensure reliability of deliveries to a larger audience.
This also applies with certain days or times of the day when you require driver supply and customer demand is outstripping driver supply, there needs to be the right compensation process in place otherwise customers might not come back if the platform is not reliable. So if you are looking to scale look at a pricing model that ensures drivers make a standard delivery wage per hour whilst covering them for longer distances travelled especially if they are contractors and not employees and then work on incentives based on performance, speed, and customer satisfaction ratings.
2. Driver Hiring
This can bog your team down looking through delivery driver applications if you don’t create an automated hiring process. Think about the questions you are asking your drivers when you interview them and see if these same questions can be answered via a digital form or sign up page on your website to save you hours interviewing candidates.
Use checkr for automated background screening if you are in the US
Allow first time couriers a chance to do 3 deliveries on trial after they pass all the initial screening. If they get a high delivery performance then allow them to work full time.
Ask your experienced drivers to train the new driver for 1 hour and compensate them with training incentives. By decentralising and outsourcing your human resources to your experienced driver fleet enables you to scale fast and something Lyft has been doing for years keeping their HQ a little leaner.
Always manage a balance between enough delivery drivers being needed for each shift and expected delivery demand otherwise driver churn or customer churn will increase if the balance is managed correctly. Our Swift software solved a lot of these problems
3. Automate Communication
Communication is the key to any successful business however with delivery it becomes even more important. Every customer wants to know where their delivery is at all times so they can plan their day around it. Gone are the days where they call an expensive call centre up to find out the status of delivery. Use delivery management software to communicate in real-time the status of your customers delivery so they never need to call your support team. This will save you thousands in customer support overheads
4. Become data driven
Don’t make decisions based on assumptions. Collect data for every part of your delivery business and then let that data tell you what decision to make. How many orders will be expected today and do you have enough drivers? How can you better position your drivers when there is high demand e.g. a pizza shop peak delivery window would be 5pm – 8pm and then you can plan to slowly send drivers home.
5. Have a backup plan when it gets busy
Planning and prioritising is not enough, you also need to think about your backup and emergency plans when all of your drivers are busy: Can you have a select number of drivers on call for a higher delivery fee on a Friday night? What about when your customer is not at home is there a quicker way for your driver to call your customer? Every driver will need a courier app on their phone so they can make quick actions to communicate with the customer and get smart routed directions during busy times. If you continue to use paper print outs for delivery jobs, then your drivers will waste significant time going through each sheet, then entering phone numbers and google map directions manually all while food might be getting cold.
6. Decide on best delivery vehicle for your product and city
Maximise driver efficiency you need to understand what is the quickest way to move your product through a city. How is parking in your chosen areas? How big are you parcels? Most messengers are on bikes in NYC, scooters or cars in parts of San Francisco and Sydney and cars or vans are ok in areas of Melbourne, Australia. Think again if your business is on-demand furniture in New York City because there will be limited parking, traffic will slow you down and dispatching large bulky items won’t make for a sustainable business model. Perhaps you deliver all sizes and shapes, well make sure the delivery software you build or choose to use can identify which drivers to dispatch which deliveries to.
7. Control performance
Your drivers are your brand and they need to be managed like an army corporal manages his troops. Every customer should be automatically sent an SMS or email to be asked to rate their experience. Drivers’ should be rated internally based on their response rates, speed, items per hour, customer rating, delivery issues and lateness.
8. Managing Customer Relations
A well-managed business should always give importance to their customers; their opinion, demand and enquiries should be considered valuable for your business to grow. Look to use a live chat tool like olark so customers can have access to a real human in case of emergencies. This gives them piece of mind and will remove their delivery anxiety. Allow customers to communicate directly with your driver to increase the chances of a fast delivery completion.
9. Manage Delivery Expectations
Can you deliver within 60 minutes or is it going to be a bit longer? How can you accurately quote an estimated time of arrival? Manage your customer expectations early with an SMS notification to outline a delivery window. As you collect more data this delivery window will become more accurate based on the parameters you set: time of day, weather, driver speed, parcel size, delivery pipeline, driver supply, traffic, previous routes, distance etc.