Introduction

So you have decided you want to start offering delivery protection at checkout and generate more profit - congrats! Let's explore different options to help you make an informed decision on how to implement delivery protection

There are two types of delivery protection providers:

1. Insurance providers
2. Self protection

Insurance providers

Examples: Route, Order Protection, Shipped

These companies provide an insurance product. They keep the revenue generated through upselling delivery protection at checkout. When something goes wrong with a delivery they are responsible for dealing with your customer and accepting/refusing a claim. If a claim is successful they will pay you compensation

Pros

• Since the insurance providers are handling your claims, that reduces the amount of time your customer service team need to spend on that type of issue
• The cost of compensating for delivery issues like loss, damage or theft will dramatically reduce

Cons

• You giving these insurance providers a lot of money. We all know how profitable insurance is. Claims are rare compared to the revenue delivery protection generates. Some merchants we have spoken to are giving these companies over £1000 for every claim
• You loose control of your customer service experience. Delivery issues are some of the most delicate interactions you can have with customers. What happens if Order Protection refuses a claim and that customer writes a bad review?
• Inconsistent customer experience, as customers are redirected to third parties for delivery issues.

Self protection

Examples: ProtectMyOrder, Navidium, Ship Aid

Self protection is where the merchant keeps the revenue generated through upselling delivery protection at checkout and handles their own claims when something goes wrong. This is completely legal. As a merchant you are simply selling a service rather than insurance

Pros

• You keep the delivery protection revenue. This generates 3x - 10x more profit for you compared to insurance providers
• You maintain control of your customer experience

Cons

• You have to handle your own delivery claims which can take time

Conclusion

The winner has to be self protection. Yes - we are biased, but one the main reasons we created ProtectMyOrder is because the only merchants who would be better of using the insurance model, are those where their claims are higher than the amount the insurance provider is charging for delivery protection. This is a very rare scenario as the insurance provider will always make sure to charge more than they are having to payout in claims. We therefore believe 99.9% of merchants should be using self protection

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How should I implement self protection?

Here you have two options:

1. Use an app like ProtectMyOrder or Navidium
2. Build it yourself

How to decide which app to use?

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What is intelligent pricing?

Intelligent pricing is an algorithm that split tests different prices and widget designs automatically. The tests balance revenue, opt-in rates and conversion rate to make sure there is no money being left on the table, and that you aren’t charging so much that you are putting them off purchasing.

In order for this feature to work properly merchants need to be doing over £2m per year in revenue, otherwise there is not enough data on which to run tests

What is gradual roll out?

Gradual roll out enables you to show the widget to a certain percentage of your website visitors and hide it for the remaining visitors. You can then compare the conversion rate between both cohorts on Google Analytics

If you have any concerns about how your customers will react to delivery protection, or what proportion of website visitors will pay for it, gradual roll out allows you to test delivery protection in a risk free way so you can see the results for yourself

PS. Every time we have have done a gradual roll out with a merchant the conversion rate was higher when customers saw ProtectMyOrder at checkout. More on this here

Resolution portal

The resolution portal enables customers to file a claim with the merchant through a dedicated portal. Navidium enables merchants to set rules. For example, “if the parcel has not moved on tracking for 7 days, give the customer an instant refund”

Having spoken to multiple merchants about this feature, our verdict is most merchants don’t want to create extra customer service channels as it adds complexity. Delivery issues are pretty rare so it is easier to ask customers to contact you through your existing customer service channels

Should I just build this myself?

As we take 8.99% of the protection revenue, we only have to be 9% better than you and you will make more money letting us take care of everything. For example, if you build this yourself and set the price too low, you are leaving money on the table. If you set the price too high, then you may be causing checkout conversion to suffer.

Our intelligent pricing tool automatically finds the best design and price for your shipping protection policy. We can test hundreds of different prices and designs to find the optimal set up.

We are a team of 4 people who spend 10,000 hours a year optimising shipping protection offerings. We have 70+ brands using our technology with hundreds of thousands of orders processed per month. We're pretty good at this! There's also no upfront cost or headache of instructing your developers to build your own version.

You'll make more money, it'll take you 10 minutes, and there's zero hassle.

If you are a smaller merchant and intelligent pricing is not super important to you then you may want to consider building the widget yourself. Compare the cost of building the widget yourself to the expected fees you’ll have to pay a 3rd party app

Conclusion

If you are a smaller merchant who is happy to set a fixed price for delivery protection (not using intelligent pricing) then you will be best off building your own widget or using a company like Ship Aid or Navidium

Larger merchants, especially those with revenues exceeding £2m, might benefit more from services like ProtectMyOrder, leveraging intelligent pricing for maximum profitability.

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