Zappos' success story is one that has been recounted many times. However, we cannot help but wonder how this online shoe and clothing store generated sales above the $1B mark in less than 10 years.
CEO Tony Hsieh claims that it all comes down to a customer engagement strategy. The company consistently scores some of the highest Net Promoter Scores in the world alongside Apple and Amazon.
All Zappos employees, regardless of their position, are trained for an initial four weeks and contact centre employees then have an additional three weeks of training. In this way, the company culture of excellent happy customer service is effectively internalised by all.
As many others advocate, Tony Hsieh focuses also on the internal Net Promoter Score, which is the evaluation of promoters within a company’s own team members.
He also came up with the term 'cultural collisions'. By closing all entrances to the building but one, the likelihood of chance encounters with other employees increases greatly. This generates employee camaraderie and as they help each other, their willingness to help customers also grows.
Zappos’ driving brand idea is that of elevating awareness and establishing perceptions of the company by means of the customers themselves.
Call centre employees work independently of scripts and are encouraged to have fun with callers. Zappos is known for doing things that were never seen before, such as delivering a bouquet of flowers to a customer who had mentioned that he was feeling unwell.
In terms of their advertising schemes, their customer service professionals were cast as the heroes and publicly showcased when going out of their way to provide excellent customer service.
Their reputation for prioritising customer service excellence is often the first thing you hear about Zappos. The fact that they sell shoes and clothing is secondary.
In Tony Hsieh’s own words, “Zappos is really a customer service that just happens to sell shoes”.
When taking into consideration the results of campaigns and their focus on growth rates no longer come as a surprise. In 2010 alone, their site visits increased by 40%, new customers rose by 44% and
their revenue per media-spend was up by 488%
With a focus on customer service and company culture, they reached over $2 Billion in gross merchandise sales, with the number one driver being repeat customers and word of mouth.
Tony Hsieh mentions that the growth is attributable to the company being defined as King of customer service, as opposed to just another online retailer.