Tuesday, August 24, 2010

Smiling customers at Zappos.com

Zappos.com is a US based online retailer. Initially it started selling shoes online but now zappos.com offers a wider range of fashion items. The company was built from scratch and turned in just one decade into a huge succesful online retaler grossing $ 1,2 billion in revenues in 2009. What did zappos.com do to get from zero to a billion dollar venture and what can we learn from it?

The core value of the company is the "WOW effect" through excellent customer service. They want a customer to say: "That was the best customer service I've ever had". And that really paid off. The main reason zappos.com did grow so fast has been repeat customers and a lot of word of mouth recommendations, by satisfied customers.

What did Zappos offer? Obviously they were not the only online retailer in those days. But it survived the .com crash and successfully built the online brand. What did Zappos do to create loyal customers? In order to create loyal customers, Zappos makes it very easy and very safe to buy products. First Zappos offers free shipping both ways. So, there are no extra customer expenses when ordering or returning goods. Also zappos.com offers a 365 return policy. That removes the risk of shopping at Zappos. Customers will buy more, because the risk is low. The costs of these two policies are considerable. But they are considered to be marketing expenses.

And now the crucial part in the strategy: Zappos wants to be in touch with its customers. The call center is open 24/7, 365 days a year and the phone number has been put on the top of every page of the website. Needless to say, it takes a lot of training and devotion to get employees up to the high standard. But it works. Because of the effort, members of the Customer Loyalty Team, as Zappos calls it, won't have to use scripts. The company culture and core values are well known to them, so they will act accordingly.

Managers of Zappos' CLT do not use metrics like Average Handling Time, which focuses at how many calls a rep can take per day. In order to achieve these quantitative goals, reps will only worry about how quickly they can get a customer off the phone. And that is not the way creating a "WOW". For that reason reps also will not up sell. Zappos customers find that annoying.

Zappos also believes that, despite of sexy buzzes such as social media, the telephone is the best branding device there is. Customers will have Zappos' undivided attention for a few minutes to create a long lasting positive customer experience.

This approach is all about making it easy for customers to do business with you. Which means the effort a customer has to go through in finding your organization, contacting it or buying your products is as low as possible. And that can already be realized by a simple phone call.

Read the 10 steps to Zappos's succes.


  1. Good post - do you know what they do measure their team on?

  2. @ Chad H: From a stragtegical point of view I would say they measure their team on customer satisfaction, customer loyalty and (low) customer effort. For Zappos consideres the CLT as a marketing team.