By Lauren Carter
Keeping in the Green: Managing Your Amazon Customer Metrics
Amazon has grown into a hugely successful multinational company by always putting their customers first. For Amazon, making sure their customers are happy has always been, and remains its number one priority. This means that if you choose to sell on the Amazon Marketplace you will be expected to hold the same standards of customer service, not just by Amazon but by the customer. As Amazon’s CEO Jeff Bezos said “We’re not competitor obsessed, we’re customer obsessed. We start with what the customer needs and we work backwards.”
To make sure your service is up to standard, Amazon measures you on a range of customer metrics. Amazon sets strict guidelines you need to stick to, if you fall below the accepted threshold your account may be suspended or even removed. These metrics combine to provide you with a seller rating. This rating needs to be at least 90 to allow you to win the buy box. You can also get a quick idea of how you’re doing by checking your overall “Account Health “metric which changes from green to yellow to red if your account is slipping.
There are five key customer metrics which Amazon uses to calculate your seller rating:
- Order Defect Rate (ODR)
- Cancellation Rate
- Late Dispatch Rate
- Policy Violations
- Contact Response Time
You can view your customer metrics through Seller Central on the performance tab.But to make life a little easier we’ve put together some information on each of these metrics along with some tips for keeping your account in the green.
Order Defect Rate (ODR)
What is it? Any order that has negative seller feedback, an A-to-Z claim, or a credit card chargeback is considered as having a ‘defect’ by Amazon. The ODR is calculated by dividing the number of ‘defect’ orders by the total number of orders over a variety of time ranges.
What is the target? Amazon have set a target of <1% failure for the ODR metric.
How do I keep on target? The ODR metric measures whether you are advertising the condition of your stock accurately and whether you are able to handle customer complaints before they escalate to more serious issues. A target of less than 1% seems harsh and perhaps a little daunting, however, if the product you sell is accurately described, well packaged and you always respond to customers quickly you shouldn’t have any difficulty meeting this target.
Pre-Fulfilment Cancellation Rate (PFCR)
What is it? The PFCR is the percentage of orders which are cancelled by the seller before shipment.
What is the target? Your cancellation rate needs to be less than 2.5% to meet Amazon’s target.
How do I keep on target? Managing stock is an essential for every seller. You need to know how many units of each product you have and you need to check this matches the number you have listed on Amazon. If a product becomes damaged or lost you need to remember to take the listing down. If you are going on holiday or are otherwise unable to fulfil orders you need to put your account into holiday mode; this will temporarily take down your listings so you don’t have to disappoint any customers.
Late Dispatch Rate (LDR)
What is it? The LDR metric is the percentage of your orders that have been dispatched late. This means any order which is dispatched after the expected date.
What is the target? The LDR should be less than 4% to meet Amazon’s target.
How do I keep on target? You can ship a product to a customer the second an order is placed but if you fail to update this information on your seller account and notify Amazon (and therefore the customer) then your LDR will increase. So remember to tell Amazon every time you ship out an order! Equally, you need to make sure you are ready to ship on time. Have packaging for each product line prepared and make sure you can easily access stock.
What is it? If you list a product on Amazon which violates one of its policies, either due to the nature of the item itself or due to the way the item is listed, you will receive a notification. If you fail to read these notifications and take any actions required, this metric will suffer.
What is the target? This metric is measured as a traffic light system, if you have unread messages you will see a yellow warning and if you have critical messages it will change to red. You need to keep it in the green by reading all your notifications, sometimes these notifications will just need to be read but sometimes they will include an action you need to take.
How do I keep on target? Quite simply you need to check for new unread notifications every time you log in to seller central.
Buyer-Seller Contact Response Time (CRT)
What is it? The CRT metric measures the number of customer messages you have responded to within the 24 hour time frame recommended by Amazon.
What is the target? As with the Policy Violations metric this is measured as a traffic light system. If your response times are over 24 hours this will change to yellow and then red. If this happens your account is in danger and you are risking suspension or worse.
How do I keep on target? It’s important that you check your Amazon messages regularly. It also doesn’t matter what day of the week a customer contacts you, even on weekends you have to reply to customers. Create a schedule that allows you to check your Seller Central account multiple times throughout the day.
If you adopt Amazon’s philosophy and always put the customer first then you should have no problems maintaining your account health. We’d love to hear what you do to make sure your customers are always happy, join the discussion on Twitter @ProfitSourcery or on Facebook.com/ProfitSourcery.