If we missed our numbers even by a small amount, the banks had the right to walk away from the loans, creating a possible cash-flow crisis that might theoretically bankrupt us. Improve Customer Support. It's an offering we state loud and clear to this day. But Ryo didnt want me to take the wrong lesson from it. Related: 5 Ways to Make Your Customers Say 'WOW'. By 2002, Zappos was running out of runway. In fact, the right customer service strategy can - and should - support your sales. Its only understandable (and as such it makes sense) as a flag that Zappos has planted to show their employees how important it is to connect with customers. Zappos crossed the $1 billion gross sales mark in 2008. This pandemic made people discover their latent Mozart, Monet, MasterChef, or marathoner. Very few companies are able to stick to this long-term vision. Zappos takes a completely different approach. Shit happens and c'est la vie. Ill get back to my visit with Tony in a minute, but first follow me upstairs to the call center. Generous may be an understatement. 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. The company exemplifies what it means to make employees happy, so they can make customers happy. The saying Customer is King is timeless and is a universal business mantra! How to make Millennials, Boomers and everyone in between fall in love with your business. Unfortunately, the internet connection, ironically, is terrible, and we never get to see the full segment. The benefit of customer-centricity is that it creates a flywheel. This average spends to acquire a new customer is the Cost of Customer Acquisition (CoCA). We focus on making sure we have a great service-focused culture. Each Zappos employee needed to understand that customer experience is a priority for the whole company, not just a department. Pimped out conference rooms to set the stage for a genuine conversation rather than an interrogation? Weve actually said no to a lot of very talented people that we know can make an immediate impact on our top or bottom line. But Why? Id argue, in fact, that the best way to understand Zappos and its approach to customer service is by studying the chalkboard on the wall of Zappos onsite contact center. Zappos developed a set of key values that lives at the heart of their company culture. Your customer service and sales strategies aren't two separate ideas. You must do something thats above and beyond whats expected. If the employee doesnt take the payout after two weeks, Zappos leaders introduce them to an entirely human way of work. 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. This team works 365 days and 247 to make the entire journey special. They had the foresight to invest in what was at the forefront, for the long-term; something we can all learn from and apply in our own organizations! But Zappos is different. And by doing so, theyre setting the bar for a positive agent experience. Too many companies think of their call centers as an expense to minimise. - Tony Hsieh, CEO @ Zappos. Zappos invested their money in customer service rather than in expensive marketing campaigns. (Good luck uncovering a phone number on the Amazon site.) Theyre even on the phone for two weeks in the call centre, taking calls from customers. Photo Credit: Zappos. In a time with an ever-changing landscape of regulations, staying ahead of legal and regulatory changes is critical to safeguarding your business's success. Actually, the metrics he cares about have nothing to do with efficiency. Get an overview of the Chattermill platform, and see Unified Customer Intelligence for yourself, Leverage your customer feedback to discover what your customers really think, Analyse customer support data to create retention-driving support experiences, Create product experiences your customers love, Analyse customer experiences from social media data to complete your VOC program, Master your customer feedback with deep-dive demos, Integrate your tech stack and create a truly unified view of your customers, Create better customer support experiences, Create retention-driving retail experiences, Get a unified, intelligent view of your customers. '", Culture Adviser and Director of Insights at Zappos. Type above and press Enter to search. But that employee empowerment doesnt come naturally. Is AI the death knell for traditional supply chain management? On the surface, Zappos appears to be an average ecommerce company with a presence thats comparable to competitors. They would ask each employee to write in a few paragraphs, the answer to the question: What does Zappos culture mean to you? Before Zappos, Tony Hsieh learnt a hard lesson. Website Planning and Creation Customer Service Strategy- Theoretical Foundations: "Customer is King" is a timeless and worldwide business motto! Remember, they are not competing on having the lowest price, but 75% of customers are repeat customers - there is strong loyalty, based on customer . >> Read Next: Learn to build a culture rooted in purpose and rally your agents around that shared purpose. 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. 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. I'm Buying Your Customer Experience, Not Your Product. A lot of customers order as late as midnight EST, and are surprised when their orders show up on their doorstep eight hours later. We expect every employee to deliver WOW. - Tony Hsieh, CEO @ Zappos. Develop a leadership purpose that combines your company goals with your agent well-being and performance to drive empowerment like Zappos. It has grown sales year over year since 1999. But an important difference in which Amazon and Zappos complement each other is that Amazon approaches customer service with data, analytics, and such left-brain-driven methods and Zappos customer service strategy is more about connection, empathy, and softer right-brain aspects. Live Content: Micah Solomon Speaks on Customer, Live VideoMicah Solomon Speaks on Customer Service, Your Customer Is The Star: An eBook From Forbes. If its something that creates a great customer experience, choose to do it, because we believe that in the long run, little things keep the customer in mind will end up paying short dividends - Tony Hsieh - CEO @ Zappos. They dont use scripts because they trust employees to use their best judgement when dealing with each and every customer. Through her conversation with her customer, Tommy, Kelli learned that Tommy is in the military. For the next decade, they lived and breathed customer experience. She talked to him for nearly two hours exchanging stories and learning of Tommys nickname, gummy bear. Initially named shoesite.com, it soon adopted the name Zappos derived from the Spanish word for shoes (Zapatos). 600E Zappos provides potential employees with two sets of interviews. Tony reached out to all Zappos employees, asking for their input on core values. Touted as the most valuable car company in the world, Tesla firmly sticks to its zero dollar marketing. In value-based pricing, products are price based on the perceived value instead of cost. Arjun loves solving puzzles, traveling, sports, Improv/acting, cooking different cuisines, and learning new things. And unless he was talking her off a cliff, the 10-hour scenario isnt understandable by traditional call center logic. Then what is Teslas marketing strategy? 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. AI-powered text analytics has allowed Zappos to better understand the customer experience from start to finish. And whatever you do must have an emotional impact on the receiver. Combined with the free 2-way shipping, this takes away the customers' risk and makes it convenient for them to order as many shoes as they want, keep the ones that fit, and return the others at no additional cost. The sad story turned out to be that she had bought them for her father, who had since died. How one step towards digital transformation completely changed the brand perception of Dominos from a pizza delivery company to a technology company? Here are the top 5 examples of great customer experiences by brands in March. This differentiation strategy allowed Zappos to stand out in a crowded marketplace and to continue to grow despite the 2008 economic downturn. Strategy & Insights Design products people love, increase market share, and build enduring brands that accelerate growth. What is this strategy and how Nike has used it? Navigating legal and regulatory changes can be challenging, but it's fundamental for entrepreneurs to ensure that their businesses are compliant. CALL the Zappos Customer Loyalty Team: 1-800-927-7671 2. 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. Join us on our mission to build the first Unified Customer Intelligence Platform, Read the latest coverage about Chattermill in the news. That only forces your employees into situations where they may come off as scripted or disingenuous. In a conversation with Zappos Executive, Fred Mossler, Tony was brainstorming ideas about the companys mission and purpose. 75% of the total revenues are through repeat customers. But thats exactly what Zappos has done. The metrics used for the performance of this team are based on the value-added to the customer and the quality of interactions, which is opposite to the conventional practice measuring number of calls completed per shift. These will tell how Zappos managed to build such a solid customer base. Share that feedback with all of your employees and celebrate the happiness that they were a part of delivering. By 2004, Zappos gross sales had reached $184 million and had received an additional $35 million from Sequoia Capital. Zappos uses a differentiation strategy. As if it could get much better than that, Tommy sent a thank you letter and pictures to Kelli, and so did his Colonel. Create a culture of people who believe in your company's values. Click here to check them out! As in a funnel, the number of customers passing on to the next steps keeps reducing in every step (refer above diagram). What made it unknown but a massive banker? To live and deliver WOW. Copyright 2023 Entrepreneur Media, Inc. All rights reserved. Moving to Vegas was also dictated by the fact that it is a 247 city, and the city never sleeps. Running a warehouse 24/7 isnt a cost effective strategy when it comes to running a delivery business. A customer goes through several steps in the customer journey before purchasing a product/service (refer above diagram). BlackRock, the story of the worlds largest shadow bank. By 2009 Zappos had grown revenue to over $1 billion in gross merchandise sales. There are concerns about fit, feel, colors, textures, and many such things. To a shortsighted manager or shareholder, breathing space looks expensive. The customers now do not have to worry about the fit, design, or comfort of the shoes and try out all the options at home. 2. Companies are often more focused on acquisition than retention, but Zappos has turned this on its head, looking to market itself through quality of service. Combined with the free 2-way shipping, this takes away the customers risk and makes it convenient for them to order as many shoes as they want, keep the ones that fit, and return the others at no additional cost. There's no better way to show your employees that customer service is more than just a role or a department; it should be a company-wide focus. 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?