For over 5 years, and their strategies have played a significant role in their growth. To maintain focus on the customer, they laid a few initiatives to ensure customer service was central to what they did as they scaled. Indianapolis, IN 46204 To assure both current and potential customers you have their . Tony Hsieh is sporting a Mohawk, the first Ive encountered atop a gainfully employed billionaire. Zappo Case - Name 3 things that makes Zappos customer service so Here are our nine points to consider if you want your company to be customer-obsessed: If yes, is customer focus, service or obsession one of them? Or they can be achieved through the use of theright words in conversation, words that make an emotional connection that transcends the transactional. They display the customer care numbers easily visible on every page instead of burying several layers (or clicks) below the surface. 5 Customer Service Strategies from Zappos' Success Shit happens and c'est la vie. P.S - We'll be publishing a bi-weekly column here on Chattermill.com presenting a brief CX analysis of thought-provoking companies and events in tech. Photo Credit: Zappos. One of the most popular peer-to-peer programs at Zappos is the co-worker bonus. And unless he was talking her off a cliff, the 10-hour scenario isnt understandable by traditional call center logic. At Zappos, we encourage every employee to bring their whole self to work. When that one call comes in, Zappos will do anything to make sure its an engaging and personable experience for the customer, in the hope that a single great phone interaction will serve as a proxy in the customers mind for the overall personality of this companythat this company wants to be my friend, to put it rather elementarily. Merchant-focused Business & Growth Strategy of Shopify, Business, Growth & Acquisition Strategy of Salesforce, Strategy Ingredients that make Natural Ice Cream a King, Investing in Consumer Staples: Profiting from Caution, Storytelling: The best strategy for brands, How Acquisitions Drive the Business Strategy of New York Times. They would ask each employee to write in a few paragraphs, the answer to the question: What does Zappos culture mean to you? The last thing anyone wanted to do was to invest in an online shoe company. Zappos was started in 1999 as an online retailer for shoes in San Francisco, USA. He works for Robert Bosch, building new products in the Internet of Things (IoT) space, and consults companies on Digital Transformation topics. Arjun Vasudev is passionate about BITS (Business Innovation Technology Strategy & Products). One of the highlights of Zappos' Customer Service Strategy is their 365 days Return Policy. In the following three years, Zappos grew to achieve $840 million in gross sales and added additional products such as handbags, eyewear, clothing, watches, and kids merchandise. You should spread it around to everyone in your company. And thats actually really uncomfortable for a lot of reps that come from other call centers. Tony reached out to all Zappos employees, asking for their input on core values. And they offer employeesvaluable incentives, like: continued learning through Zappos University, the opportunity to find a new career path with internal Shadow Sessions, a network of life coaches, flexible work schedules, and volunteer opportunities. For example, Zappos offers free shipping both ways to make transaction as easy as possible and risk free for customers. Create fun and a little weirdness. As in a funnel, the number of customers passing on to the next steps keeps reducing in every step (refer above diagram). You must do something thats above and beyond whats expected. Each year, the team sends out 13,000 custom-illustrated greeting cards directly to customers, for weddings, birthdays, and other special occasions. Before Zappos, Tony Hsieh learnt a hard lesson. If you don't have established values, define them and make sure customer focus, service or obsession is one of them. One of the highlights of Zappos Customer Service Strategy is their 365 days Return Policy. A customer goes through several steps in the customer journey before purchasing a product/service (refer above diagram). Its vital you have the technology and text analytics systems capable of analysing customer feedback at scale. Do reach out to Arjun for discussing conversion of ideas to business, cross-mentoring, IoT topics, or random chats about anything and everything. Meet Zappos. It seems like every other conversation I have with my aunt, who has elegant, narrow feet like you, has centered on this. As you can imagine, soon the two of them were besties. Getting upper management invested in providing service directly to customers - by spending 6 weeks at Zappos's call center! People who study company culture come from all over the world to visit the Zappos offices to see how the company operates. 1. By 2004, Zappos gross sales had reached $184 million and had received an additional $35 million from Sequoia Capital. Heres Why. The sad story turned out to be that she had bought them for her father, who had since died. In essence, the customer is at the heart of every business. You have the customers undivided attention for five to ten minutes, and if you get the interaction right, what weve found is that the customer remembers the experience for a very long time and tells his or her friends about it. Opinions expressed by Entrepreneur contributors are their own. Business Case Study: Zappos, A Success Story of Customer Service 50% of the customers shopping from Zappos do return for further purchases. In the context of Zappos, a company whose stated purpose is To Live and Deliver WOW, wow is typically delivered over the phone, the humble vessel that Zappos considers to be its most important connection with customers. Amazon andZappos consistently claim some of the most satisfied customers in ecommerce. Either way, Zappos is depending on customer service as marketing, trusting that the intimate engagements they're having are enough to cement the loyalty of the customers on those calls and. To provide the best customer service, Tony Hsieh knew the culture was paramount to success. Zappos's Customer Loyalty Team is known for its big, customer-delighting gestures. And those agents thrive in a culture built on empowerment where theyre encouraged to make incredible connections with the people who reach out to them each day. Type above and press Enter to search. 1. You can reach us out at [emailprotected] .Disclaimer: The views and opinions expressed in any article on the website are solely those of the authors and do not necessarily reflect the official policy or position of companies in context. Furthermore, they believed that people who could not connect to their customers culturally might not deliver a WOW experience. Zappos is certainly one of those in this category we believe. In fact, Zappos has a dedicated space on their website where agents can share their customer stories. Build open and. Pursue growth and learning. A creative application that shows our fun culture and is the opposite of boring applications? Related: I'm Buying Your Customer Experience, Not Your Product. Why does Teslas Zero Dollar Budget Marketing Strategy work? Remember, they are not competing on having the lowest price, but 75% of customers are repeat customers - there is strong loyalty, based on customer . For extra credit, consider having all of your employees pitch in to support the customer service team during peak moments of the year, like the holiday season, July 4th weekend, etc. Customer Service In The Time Of COVID: 7 Strategies From - Forbes You can find this breathing space reflected in the metrics of the Zappos contact center. BlackRock, the story of the worlds largest shadow bank. N26 Business Model: Changing banking for the better, Sprinklr Business Model: Managing Unified Customer Experience, How does OpenTable make money | Business model, How does Paytm make money | Business Model, How does DoorDash make money | Business Model, Innovation focused business strategy of Godrej. Instead, they have everything to do with how satisfied a customer is at the end of a service interaction. Zappos is synonym of the best customer service in the world. The chalkboard has a second sector of hand-drawn stats that youll never see compiled at any other contact center, these telling how many flowers, cookies, postcards and unnamed wow gifts have been sent to customers in the previous month and previous year. A lot of customers will order five different pairs of shoes, try them on with five different outfits in the comfort of their living rooms, and then send back the ones that dont fit or they simply dont like - free of charge. There are concerns about fit, feel, colors, textures, and many such things. Broadly speaking, the telephone at Zappos represents human contact, and extending rather than contracting the amount of time and resources that the company wants to spend in human-on-human connect with customers, whether it is telephone to telephone, terminal to terminal, or even asymmetrically, like when the wildly engaging employees at Zappos create their signature video demos for any and all products they have for sale on their site. . The 5-Step Guide to Navigating Legal and Regulatory Changes in Business. I try to do one uncomfortable thing every day.. ", Related: The 4 Top Customer Service Screw-Ups You Must Avoid. But our lending agreements required us to hit projected revenue and profitability targets each month. AI-powered text analytics has allowed Zappos to better understand the customer experience from start to finish. It has grown sales year over year since 1999. However, once it starts to give fruits, you want it to reap the benefits year after year (and do not forget that the seeds from fruits can lead to further new trees word-of-mouth marketing). Embrace and drive change. Zappos developed a set of key values that lives at the heart of their company culture. Therefore, their move to Vegas (apart from the lower tax rates) was to hire top talent for their customer service team. 75% of the total revenues are through repeat customers. Thirty-seven beliefs were refined, and on February 14, 2006, Zappos 10 core values were born. Check. An Inside Look at Zappos Customer Service Metrics Zappos focused on providing an exceptional customer experience through fast and free shipping, a 365-day return policy, and 24/7 customer service. Starbucks prices products on value not cost. In a conversation with Zappos Executive, Fred Mossler, Tony was brainstorming ideas about the companys mission and purpose. All Zapponians know that delivering amazing customer service is what's at the heart of our organization. We expect every employee to deliver WOW. - Tony Hsieh, CEO @ Zappos. I and the rest of the Zappos recruiting team are constantly thinking of ways to wow new candidates while they're still in the hiring process. In fact, it's the Zappos company purpose: "To live and deliver 'WOW!'" Christa Foley. These insights can be used by the entire team to allocate resources more efficiently and hone in on the priorities behind logistical, product, and marketing strategies which drive the companys value generation. So, if telephone inquiries ever drop off from Zappos customerswhich seems likely as customer support trends continue to move toward messaging, chat, and social mediaI expect Zappos will find ways to have engaging conversations on those channels as well. Your customer service strategy should be informed by an underlying customer service philosophy. Dont Go Into Personal Debt, And Other Tips For Small Business Owners Just Starting Out, Do You Know Whats In That Gummy? Let us explore the importance of having a good customer service strategy. These will tell how Zappos managed to build such a solid customer base. He ordered a pair of shoes that we had in our warehouse, and we surprised him with a shipping upgrade, so he got his order in two days instead of our original promise of a week. Initially named shoesite.com, it soon adopted the name Zappos derived from the Spanish word for shoes (Zapatos). As customer service standards continue to dip, delivering outstanding customer care is a truly fantastic way to differentiate your company from the rest of the herd. Zappos Creates Crazy WOM By Focusing on Customer Service - ReferralCandy Chattermill partners with Five Guys to provide actionable customer insights across UK, France, Germany, and Spain. We have specially trained recruiters who conduct cultural alignment interviews, and if they sense a red flag -- if they sense the candidate doesn't care about customer service the way we do -- we will not move forward with said candidate. Our busiest time at Zappos is the holiday season; during that period, all employees take at least 10 hours of customer service calls -- myself included. Zappos was burning cash and running out of money, and they quickly needed to turn round their fortunes and find a way to get to profitability fast. We had a customer email us the other day. By Micah Solomon. From wrong to missed acquisitions, wrong CEOs, the list is endless. The cycle feeds itself - like a snowball that grows bigger and bigger. Because to understand Zappos, and in particular Zappos celebrated customer service methodology, Tony isnt the only place you can start. Now is the Best Time to Migrate From Avaya. So whats the story behind their rise to become the most loved e-commerce brand on the planet and whats their secret to delivering a brand powered by customer experience? 5. And after the call I felt moved to send her some flowersjust one of the 380 gifts of flowers you can see on the board that we sent out last year. Refund a customer for a defective product, and then send a replacement for free. This customer-centricity is extended throughout the Zappos website. Zappos has built a brand powered by customer experience. You may opt-out by. I'm Buying Your Customer Experience, Not Your Product. Being focused on customer service requires dedication. A full tour of the campus? The additional shipping costs are expensive for us, but really we view those costs as a marketing expense. - Tony Hsieh, CEO @ Zappos. Zappos doesnt make it hard for customers to get in contact. You have to hire people who have the same philosophy about customer service as you do. . Craziest part is that they would leave it completely unedited. Simply that your coworker went above and beyond for you. The Secrets to Zappos' Success - US News & World Report Imagine all the efforts required for a mango tree to grow from the beginning. Each Zappos employee needed to understand that customer experience is a priority for the whole company, not just a department. The company's entire strategy is to create loyalty through incentivizing 'wow' moments and emotional connections. Which means they can get orders out to customers in super quick time. '", Culture Adviser and Director of Insights at Zappos. 11 Great Customer Service Examples (2022) - Qualtrics Our goal for emails is to respond in an hour.. A true customer service mindset isn't something that gets turned on when talking to a paying customer. Moving to Vegas was also dictated by the fact that it is a 247 city, and the city never sleeps. By 2002, Zappos was running out of runway. Breathing space is an essential element leading up to that moment as well, the moment when the agent encounters and strives to wow a live customer on the line. Those values are set up to reflect everything Zappos does, including how they interact with customers, how they interact with each other, how they interact with vendors and business partners. Save my name, email, and website in this browser for the next time I comment. The 2 Types Of Wow Customer That Zappos, Ritz-Carlton Train - Forbes 3. They actually encourage customers to call their customer care numbers. Zappos.com (Zappos), the top online shoe retailer,1 is ranked 31 on Fortune magazine's 2013 "Best compa-nies to work for" list,2 on which it has been for five years. A lot of websites bury customer service numbers five links deep, and even when you find it, its a form or e-mail address that you can only contact once. He said he loved our customer service and would tell his family and friends about us. The pillars of technology that have helped Zappos blitzscale growth are advanced supply chain management, their social media strategy and the use of Chattermills customer insights. Its almost like the whole industry has conspired against people with narrow feet. Since its founding in 1999, Zappos has leveraged cutting-edge technology, social media presence, and excellent customer service practices to sell its products in a way that follows the ever-changing lifestyles of its consumers. In fact, some 75% of Zappos purchases come from returning customers. - Hubspot. ZAPPOS' Social Media Customer Service Performance - Juphy But that employee empowerment doesnt come naturally. In his letter, the CEO summed up his thoughts: We are excited about doing this for 3 main reasons: In hindsight, its logical to assume that Amazon bought Zappos customer-centricity flywheel, which displayed the companys growth potential and its legendary customer service culture, all built by Zappos exceptional talent base. It was later decided that the Zappos brand should be about the very best customer service. (Agent occupancy is the percentage of time that agents spendor are predicted to spendactually handling calls, as a percentage of the time they are on the clock.). Opinions expressed by Forbes Contributors are their own. Theyre even on the phone for two weeks in the call centre, taking calls from customers. Depending on where you live, your monthly mortgage payment can be as low as $1,700 or as high as $3,600. Zappos has taken numerous actions to ensure the best customer service, a couple of interesting ones are listed here. And, they rally every employee around those core values and shared purpose. Theres the story of an agents 10-hour phone call whereservice was put before metrics. Website Planning and Creation Customer Service Strategy- Theoretical Foundations: "Customer is King" is a timeless and worldwide business motto! Tony looks at me sourly, or as sourly as his essentially affectless demeanor would allow. Breathing space is necessary as well when youre hiring for wow; you need the time to find the people with an aptitude for make emotional connections with customers. When agents always have to ask for approval or squirm around policies, they dont feel trusted. The base commander told Kelli that people like her make such a difference in the soldiers lives. Surely you have heard many urban legends about Zappos. Hed ordered a pair of shoes to wear while hes in Afghanistan. Now you dont have to put those $90 Nikes on Craigslist. Apple A Unique Take on Social Media Strategy. We are not an average company, our service is not average, and we don't want our people to be average. Zappos designed a 4 week program, in which they go over company history, the importance of customer service, the long term vision of the company. As unsexy and low tech as it may sound, our belief is that the telephone is one of the best branding devices out there. Learn more about our vision,mission, and what makes us tick. The power behind the Zappos brand is the team of agents who deliver spectacular service to customers. Learn to build a culture rooted in purpose and rally your agents around that shared purpose, Use Sharpen Insights to improve your interactions (not just your metrics), 4 Ways Banks Can Hyperpersonalize Customer Experiences at Scale, How to Use Data (And Your Instincts) to Evaluate Your Next AI Project, 5 Ways to Prepare Your Contact Center for a Recession. Company-wide, it is a daily quest for every employee to WOW customers in new and wonderful ways. With online shopping growing by the day, Zappos is well-positioned as it begins its third decade. As if it could get much better than that, Tommy sent a thank you letter and pictures to Kelli, and so did his Colonel. The benefit of customer-centricity is that it creates a flywheel. It lets us have these in-depth, textured conversations with our customers. In fact, this is exactly what Zappos has delivered for more than two decades now, and it has WOW ed the customers in the USA with the famous Zappos customer service strategy! Yes you read that correctly. Who would want to buy shoes online people thought? Live Content: Micah Solomon Speaks on Customer, Live VideoMicah Solomon Speaks on Customer Service, Your Customer Is The Star: An eBook From Forbes. Chattermill uses deep learning AI to unify and analyse CX data to improve experiences, increase loyalty and retention. She talked to him for nearly two hours exchanging stories and learning of Tommys nickname, gummy bear. . Zappos wanted top quality and the best resources handling its customer service, and the high rents at San Francisco and competing ecosystem meant that they could not get the best talent for their budget. It takes tons of training and coaching (or untraining, according to Hsieh) to empower employees to make in-the-moment decisions that benefit customers AND the company. Ill get back to my visit with Tony in a minute, but first follow me upstairs to the call center. They dont hire like normal brands, they dont treat culture the same as most brands, and they go about delivering profits differently than most. We tell them: "You are the one with the PEC; you read their energy and their tone best; you should do what you think is best! 3. So how did they become the most customer-obsessed brand in the world? Even after four weeks of onboarding and training, focusing the entire time on how to make that personal, emotional connection we're so known for, the Zappos customer loyalty team still follows just one general rule: "Always do what's right for the customer!". They are confident that these are the touchpoints to create a positive experience for the customer leading to increased loyalty. The customer service strategies behind Zappos' success that you can implement today. Those who choose to stay on are immersed in a culture of caring and friendship with leadership teams who treat their employees well. Here are the four KPIs they use to monitor, track and improve performance: Measuring Call Quantities Zappos's longest call on record lasted more than eight hours, and guess what? It not only builds engagement but reaffirms your focus on delivering customer satisfaction. No need to check with anyone else. Create a program where every new hire -- regardless of level, position or department -- learns about customer service and has the chance to actually practice it. If my cousin Jenny buys shoes from Zappos and gets a hand-written note with a package of gummy bears in the mail from the agent she spoke to, shes going to expect that same level of service when she buys a vacuum cleaner from a different company next week. Related: 5 Ways to Make Your Customers Say 'WOW'. 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We think that there is a huge opportunity for us to really accelerate the growth of the Zappos brand and culture, and we believe that Amazon is the best partner to help us get there faster. This whole transaction set precedent of what a smart acquisition is for the rest of the market. But Zappos is different. Opinions expressed by Forbes Contributors are their own. In this piece, we connect Apples unique and successful take on social media to its core values. Don't force your customer service representatives to jump through multiple hoops before they can get approval to give their customers what they need -- give your employees the power to make executive decisions and watch your customers smile. An impressive44% of new customers heard about Zappos via word of mouth. The company understands how much speed and accuracy matter for customers, and are prepared to invest dearly to ensure that the customer experience is improved every day. They encourage a fun environment filled with co-creation. By launching a gated offer program, Zappos joins a host of other leading brands committed to deeper relationships with their customers. But what it does require is breathing space. By 2009 Zappos had grown revenue to over $1 billion in gross merchandise sales. By doing this, Zappos is able to ensure the best customer experience. Technology is starting to replace many conventional human interactions, but is that a good thing? And whatever you do must have an emotional impact on the receiver. Zappos agents pride themselves on delivering true happiness. To live and deliver WOW. They try to maximise for customer experience, which means getting orders out to their customers as quickly as possible. Either way, Zappos is depending on customer service as marketing, trusting that the intimate engagements theyre having are enough to cement the loyalty of the customers on those calls and ensure that word of the Zappos brand will spread. The volume of these customer inputs is heavily skewed toward telephone: 7,394 calls, answered in 25 seconds on average, as opposed to 1656 chats (sorry, chatz) answered in 31 seconds each, and 988 emails (sorry again: emailz) answered on average in 4 hours and 15 minutes. Today more than ever, customer service really matters. To conclude, when Amazon and Zappos union happened in 2009, some people thought it is a natural thing given the customer obsession of both these companies. Zappos loosens the reins and putsemployees closest to the customerin control of the customers fate.