‘Bricks & Mortars’ retailers when compared with online retailer, always have an edge as the customers always prefer to try and feel the product/service and then go-ahead with the purchase. Thus, company like Zappos had to provide an exceptional customer service to its customers to differentiate itself from other stores. Zappos, was providing two- service and selection- of the three areas- service, selection and price.
The customer service initiatives followed by Zappos were as follows:
1. Free Shipping- In case of online shoes retail industry like Zappos, customers are unable to see and feel the products and thus if he/she purchases the product online which might not be of the required colour or required size have to return the product. Thus, Zappos offered free shipping as well as the facility to return the shoes if not satisfied. In such case, the return expenses were borne by the company.
2. 365-day return policy: Zappos gave the option of returning the product within a period of one year.
3. Delivery in 4-5 business days: Zappos promised its customers to deliver the products in a period of 4-5 business days.
4. Surprise upgrade to overnight shipping: To delight the customers, it sometimes delivered the product overnight by a surprise upgrade.
5. Lowest prices: Zappos claimed to offer lowest prices to its customers for the products sold by Zappos. It guaranteed a 110% refund policy of the difference between its prices and the lower price offered by a competitor.
6. Merchandising Policy: Zappos also had pictures of the products it sold, in different colours it offered and from six different angles.
7. 24X7 toll free numbers: Zappos provided a 24X7 toll free number to answer customer enquiries. A special customer service team was formed to answer every e-mail received by the customer.
8. No-limit Customer care calls: The customer representative’s responses were not scripted and there were no time limits on the length of calls.
9. Customer representatives or website links could even redirect customers to other websites of the competitors in case Zappos was out of stock for a specified pair of shoes.
Most of the services offered by the company had a high impact on the expenses of the company but Zappos followed these customer services as they were basically considered as a long term investment. They helped the company develop long term relationships with the customers. The services were kept up to mark with the company’s standards and such delighted customers helped Zappos improve its brand image through Word-of –Mouth.
Also, the above mentioned services like free shipping and merchandising policy helped Zappos compete with ‘Brick & Mortar’ shoe retailers. By offering these services narrowed the convenience gap between buying shoes online and buying them at a store.
According to Zappos , the best way to offer best customer experiences was by making it part of company’s culture with main focus on customer service. Also, Zappos being a service company, it’s easier to copy services but very difficult to imitate the culture of the company which proved to be the competitive advantage for Zappos. The measures taken by Zappos to make customer service an integral part of company’s culture were:
1) Zappos listed ten core values for building a customer service focused culture-
i) Deliver ‘WOW’ through service.
ii) Embrace and drive change.
iii) Create fun and a little weirdness.
iv) Be adventurous, creative, and open minded.
v) Pursue growth and learning.
vi) Build open and honest relationships with communication.
vii) Build a positive team and family spirit.
viii) Do more with less.
ix) Be passionate and determined.
x) Be humble.
2.) HR Practices followed by Zappos-
Firing, hiring and performance evaluation- was performed with main focus on customer service culture of the company.
The selection procedure adopted by Zappos consisted of a tough two part interview to discern if their skills were up to the mark and if they fit the culture of the company or not. The prospects were carefully screened to ensure that their core values matched with those of the company.
A special five weeks ‘Customer Loyalty’ training program was conducted for new hires. During this period, the new recruits had to work in the company’s call center and the warehouse to gain knowledge about the shipping process being followed.
After first week of training, the new hires were offered USD 1000 to leave the company in case they felt they did not fit in with the company culture. This was an easy and inexpensive way to get rid of people who were not committed to work with company. This ‘Offer’ showed that company believes that if you really want to amaze customers, best way to start is to amaze the company employees and inspire them to amaze everyone who comes in contact with the enterprise.
The policy of HR at Zappos was to ensure that each employee thought that he/she had a stake in the company culture.
Zappos also encouraged the managers to spend time with his/her team outside office in order to improve communication and trust at office. Other practices included birthday parades and nap times. Also, a 300-page book is released annually that carries the stories and testimonials from the employees and other partners.
The possible disadvantages of such a strategy are as follows:
1. First and foremost disadvantage was the ‘Offer’ made by the company. Offering USD 1000 to employees after one week training was affecting the revenues of the company, might be to some small extent.
2. The ‘Offer’ was also harmed in the sense that first week of training for the employees went in vain in case any of the employees went on to accepts this ‘Offer’.
3. The policy of HR actions- hiring, firing and performance was mainly focused on customer service without considering other factors or any such action to determine the reason for the employees’ low performance.
Employees-Generated Media: The major part of Zappos sales comes from ‘Word-of-Mouth’ and the way employees dealt with customers was a major factor in creating a positive brand image. The major planning was focused more on training employees instead of media as was the case in other companies. In this way every single employee became a direct contact with the customer. Also, the positive brand image and the customer service provided by the employees ensured that each person/customer becomes an advertising vehicle for Zappos.
The corporate culture centric to customer service emphasized that their customer representatives are more friendly and helpful to the customers. The HR policies- hiring, firing and performance evaluation- focused mainly on customer service. The initial training for a period of five weeks focused mainly on customer service as was visible from training at company’s customer care.
Social Media
Zappos was one of the first companies in the US to use social media extensively for communication with its customers. Social media was the media which helped Zappos get connected to its customers permanently. It mainly constituted of blogs and social networking sites. In 2007, Hsieh- Co CEO, Zappos- started using Twitter, the social networking and micro-blogging website where users could send text messages called ‘tweets’. By late 2007, Hsieh had 10,000 followers who regularly read his messages due to which he encouraged his employees to use Twitter which will help in direct interactions between employees and customers.
Also the sub-domain, Twitter.Zappos.com, was added to the Zappos website and linked to other web pages on the website with phrase “What are Zappos employees doing right now?”
The tweeks available on the Twitter website contained full information about the company with the list of all Zappos Twitterers and the ranking of employees at Zappos according to the number of their followers. It was used as a means to promote transparency and to reach out to the customers in a friendly way. Also, it enabled Zappos employees to respond quickly to any enquiries from customers and facilitated more effective damage control if something happened to go wrong with an order. It also helped the senior executives and the team managers to keep track of all the tweeks. It was also widely used to market Zappos products and provided an insight into market developments.
It was also used as a recruitment tool to get in touch with prospective employees who knew and appreciated Zappos’s core values. The use of Twitter was included in the new recruits’ orientation program as well.
Other than Twitter, some other steps taken by Zappos included a company blog, video blogging through Zappos TV on YouTube and using other social networking sites like Facebook and MySpace.
Pitfalls
Media like ‘Word-of-Mouth’ and social networking can help company build a brand image. On the other hand, it can also affect the company’s image negatively. A customer can also spread a negative word of mouth in case he/she had bad experience with the service provided by the company. A prospect is always affected by his close social network and is negatively affected by the network.
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