Marie Wiere's Blue Sky Management Blog

After college I participated in the Walt Disney World Cultural Representative program training new cast members on Disney’s guest service. It’s rare to find companies that deliver customer service at the level of Disney, however online shoe, clothing and accessory retailer Zappos may be that exception. In 2008 Zappos hit $1 billion in annual sales, a success they attribute to their customer focus. Here are some of the features of Zappos’ customer driven business strategy:

• Every customer contact is an opportunity: Zappos view every phone call and e-mail as an opportunity to make a lasting impression on their customers.
• Investment in customer service: The company allocates a large amount of the money that they would have spent on advertising on customer service. If the customer service is perfect, word of mouth will make up the difference.
• Keep core competencies in-house: At one point Zappos outsourced their warehouse and shipping. This sourcing strategy did not work as Zappos quickly learned that you couldn’t trust a third-party to care about your customers as much as you do.
• Make customer transactions as risk free as possible: U.S. Zappos customers benefit from free shipping both ways. Customers have 365 days to send back the items that don’t fit or they don’t like. Zappos returns run high (accounting for approximately a third of gross revenues) but they have learned that the lower the transaction risk, the happier the customer and the more likely they will buy more.
• Make contact information easy to find: Zappos list their 24 hour telephone number on every page of their website, so that customers can easily contact them if they need to.
• Evaluate customer interactions from a branding lens: Zappos evaluate their customer service staff on their ability to go above and beyond. Zappos do not require their staff to up sell as such a practice can irritate customers. They also do not measure call center staff on average call handle time as they don’t want them to rush through calls damaging customer service experience. One member of Zappos’ Customer Loyalty Team (the name of their staff) once spent 6 hours on a phone call helping a customer find the right pair of shoes. 
• The lifetime value of a customer can grow: In contrast to traditional marketing ROI calculations, Zappos believe that a customer’s lifetime value can grow if loyalty is developed and expectations are exceeded.
• Surprise your customers: Surprising customers goes hand in hand with exceeding expectations. One such example at Zappos is their surprise shipping upgrades for repeat customers.

What do you think? Have you ever ordered from Zappos? Share your thoughts in the comments section below.