eTail West 2018

February 26 - March 01, 2018

JW Marriott, Palm Springs, CA

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How Zappos Wins at Customer Service Every Day

The power of customer service as a sales strategy should never be overlooked. For customers shopping at Zappos – an online shoe and clothing retailer – it has to be said that there’s nothing particularly special about the prices, nor, perhaps, even the products. And yet, here is a retailer that managed to hit $1 billion in sales in its first 10 years of existence, and now produces in excess of $2 billion in revenues annually.

For a company that appears, on the surface at least, to be doing pretty average things, we must ask ourselves – what is it, then, that makes Zappos such a spectacularly special success?

Answer: a priority commitment to making customers happy.

The Zappos WOW Philosophy

Zappos’ approach to customer service is certainly unconventional – some have even described it as “insane” and “fanatical”. And such remarks, if a little extreme, are nonetheless hardly surprising. Call center employees endure 4 full weeks of training on how to make customers happy before they actually start handling calls. The agents never use scripts, and they never upsell. In fact, the only thing that’s important to Zappos is one simple thing: that the customer is happy – no matter what.

“We are not an average company, our service is not average, and we don’t want our people to be average. We expect every employee to deliver WOW”, the Zappos website states.

This is the key philosophy that Zappos employs – and goes at lengths to ensure that each member of its call center team shares. Job candidates are rigorously screened to ensure that their values match up with the retailer’s. Commitment is tested early on through a program which offers all trainees $2,000 to quit at the end of the first week of training – an offer that stands until the end of the fourth week. Zappos only wants people who really want to work for the company – everyone else can take the money and run.

The purpose is to create a culture of happy and committed individuals that believe in the Zappos customer service philosophy. In turn, a team whose happiness is taken seriously and is empowered to “do whatever they feel is the right thing to do” will result in producing equally happy and loyal customers.

Zappos founder and CEO Tony Hsieh explains:

“I think the main thing is just trust [the customer service reps] and let them make their own decisions. Most call centers are set up by policies and so the actual person that’s answering the phone doesn’t really have the ability to do anything. If you […] call most customer service places, if you ask for anything that’s not normal they have to talk to a supervisor or just say ‘oh our policy doesn’t allow that’ and whatever. So we generally try to stay away from policies, we just ask our reps to do whatever they feel is the right thing to do for the customer and the company. And that’s actually really uncomfortable for a lot of reps that come from other call centers. We kind of have to untrain their bad habits.”

Going at Lengths to Nurture Loyalty

Zappos doesn’t value the processing of high call volumes, nor of quick-time resolution. Nonetheless, each agent is expected to spend at least 80% of their time in customer-facing interactions. Whether this equates to 100 calls a day, or just 1, it doesn’t matter – however long it takes to make each customer happy is time well spent for Zappos.

Indeed, Zappos utilizes call center technology to track average call times per agent. However, the goal is not to reduce the average call times – only to ensure that aggregated interactions equate to above the overall 80% mark. Agents who achieve the target receive regular rewards – those that don’t receive additional training.

“It’s more important that we make an emotional connection with the customer, rather than just quickly getting them off the phone,” says Derek Carder, customer loyalty operations manager for Zappos.

This is a philosophy that has recently been taken to the extreme. Last June, a Zappos employee took a customer service call that lasted a record-breaking 10 hours and 43 minutes. Insane? Fanatical? Maybe, but such accusations perhaps miss the point of what Zappos is trying to achieve – loyalty.

75% of Zappos purchases come from returning customers. And it’s not surprising, considering the over-and-above lengths that the retailer has gone to pleasing those that have done business with the brand. In 2011, Zappos sent a bunch of flowers to a lady who’d ordered 6 pairs of shoes due to her feet being damaged by harsh medical treatments. In the same year, the company sent a free pair of shoes to a best man who had turned up to a wedding shoeless. And in 2015, Zappos decided to deliver a free gift to every household in Hanover, New Hampshire (a town reportedly heavy with customers particularly loyal to Zappos) – nearly 1,900 gift boxes were personally delivered by more than 30 Zappos employees. 

Such commitment makes Zappos a brand worth talking about, with customers becoming fans and advocates of the brand and telling their friends about the experience. Indeed, in 2009, a very impressive 44% of new Zappos customers heard about the retailer simply by word of mouth. 

Setting the Bar for Delivering Happiness

Zappos, it seems, is ahead of its time with its strikingly unconventional approach to customer experience. According to a Walker study, by 2020, customer experience will overtake price and product as the key brand differentiator.

(Image source: superoffice.com)

Zappos has set a standard that customers are happy to pay for. The last word goes to Tony Hsieh, author of Delivering Happiness and Zappos founder and CEO.

“Our whole philosophy became ‘let’s take most of the money we would’ve spent on paid advertising and paid marketing and instead of spending it on that, invest it in the customer experience/customer service and then let our customers do the marketing for us through word of mouth’, and that became the whole business model. […] If you really just think about how to make customers happy and how to make employees happy, that actually, in today’s world, ends up being good for business.”

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About John Waldron: John Waldron is a technology and business writer for markITwrite digital content agency, based in Cornwall, UK. He writes regularly across all aspects of marketing and tech, including SEO, social media, FinTech, IoT, apps and software development.