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Zappos is a massive online clothes and shoes retailer that started as a small online store in 1999. In 2009, it was acquired by Amazon for US$928m. In 2014, its profits added up to an impressive US$54.5m.
Zappos is doing extremely well –and it’s gotten to where it is NOT with snazzy TV commercials or massive billboards, but through good ol’ word-of-mouth.
In particular, Zappos’ success has been attributed to its reputation as a company with excellent customer service. Its ability to please its customers has ensured that they repeatedly return – and drive up Zappos’ profits.
How exactly did Zappos come to be known for its reputation as the nice guy of the ecommerce world?
1. Always providing 110% service; even when it wasn’t expected of them
Zappos makes sure that its service is exceptional: its employees seemingly go to any lengths to keep customers happy.
This perception is crucial in an era where most customers’ interaction with customer service involves lengthy hold times before connecting to a contract staff member in an entirely different continent.
Here are a few examples of Zappos' legendary customer service:
- Upon learning that a customer's feet were damaged after harsh medical treatment, Zappos sent a bouquet of lilies and roses to her and upgraded her to VIP status.
- When a tourist wanted a pair of shoes that were out of stock, a Zappos employee bought the shoes from a physical store nearby, and hand-delivered them to her hotel, for no extra charge.
- When UPS messed up and threatened to leave a best man shoeless at the wedding he was attending, Zappos shipped another pair of shoes overnight so that he'd have them in time, and refunded his money.
What makes Zappos' customer service truly exceptional is its treatment of customers as human beings.
Corporations are often guilty of treating their customers as mere commercial actors and forgetting that they too have their own stories to tell.
Zappos' customer service is acutely aware of the difference that a personal touch can make to its reputation, and it has exploited this knowledge to great effect.
2. Getting upper management invested in providing service directly to customers – by spending 6 weeks at Zappos's call center!
Zappos' culture of customer service isn't just restricted to the call center.
In a corporate world where companies draw a clear line between the secretaries and the big shots, Zappos makes every new employee spend 6 weeks at its call center.
According to its founder, Tony Hsieh, 4 weeks at the call center are dedicated to training, and the last two weeks are spent answering customer calls.
The inclusion of upper management is crucial to Zappos’ success: it ensures that white-collar management personnel whose jobs have little access to consumers, but who hold immense decision-making power, remain invested in Zappos’ consumer-centric core. It prevents upper-level management from reverting to traditional analyses of customer service as a money drain.
Most importantly, the presence of upper management in Zappos’ call center training sends a clear message to the call center workers about the importance of their jobs to the company – it shows them that they form the backbone of the company. This can only have a positive effect on their standard of service and customer satisfaction.
3. Making exceptional service a critical part of the culture of the company itself
Zappos' excellent customer service was never conceptualised as an add-on to their main business of selling shoes. Instead, Zappos management has consistently emphasised that their customer service forms the core of their business.
Zappos' then-senior Brand Marketing Manager even stated that Zappos is a service company that happens to sell whatever it does.
An excellent example of how customer service forms the core of Zappos' business is its return policy.
Retailers, both traditional and online, traditionally view returns as a drain on their bottom line - free returns essentially involve the company paying to transport a product around the country that ultimately remains unsold. However, Zappos, according to then-Director of Customer Loyalty, has built returns into its profit-loss model. In fact, it encourages customers to order multiple pairs of shoes and return those that they do not like.
The decision to provide free returns may seem irrational on a conventional cost-benefit analysis. However, Zappos' goal of selling its service means that such a decision makes perfect sense.
So, let's recap: How did Zappos achieve such success?
Zappos’ incredibly effective word-of-mouth strategy is not simply the accidental creation of a friendly guy. It is engineered purposefully to cultivate the impression of the company as a friend – a friend whom customers would return to over and over again.
These strategies are definitely worth studying for any company which seeks to improve its sales by cultivating a positive image.
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