Since its founding in 1999, Zappos has grown to be the world's largest online shoe store, helped along by its purchase in 2009 by Amazon.
Currently based out of Nevada, the company is famous for its loyalty business model and relationship marketing: the primary sources of the company‘s rapid growth have been repeat customers and numerous word of mouth recommendations.
It is said that, of its customers, 75 per cent repeat buyers. Robert Richman is the product manager of Zappos Insights, the Zappos Family company dedicated to helping businesses with their cultures. He talked to Communication Director about corporate character and competitive advantage:
Would you say that customer care is Zappos defining characteristic? If so, at what stage did excellent customercare become the goal for Zappos?
Yes, it is, though we don’t call it “customer care.”We simply call it service. It was a differentiating factor from the beginning.We did not have the money to spend millions of dollars on television advertising, which was the standard method for dot coms in the nineties to become well-known. Instead we put our marketing dollars into the customer experience with the hypothesis that an amazing experience would create word-of-mouth marketing. It worked, and continues to work to this day. Compared to most companies our size, we spend a small percentage of our budget on marketing.
Zappos is also known for its working environment and corporate culture. How does that feed into customer service (and vice versa)?
We realised early on that to create the best possible service, it could not simply be about the customer.We needed to create an entire culture of service.That means we are of service to every co-worker, every boss, every partner, and even our vendors. By creating an entire culture of service (and hiring people who love to be of service), we find it easy to trust every employee to deliver a great experience.
Has it been easy to hold onto this authenticity as Zappos grows in size and success?
It’s easy only in the sense that discipline makes it easy.Think about this analogy – if you want to lose weight and have no rules, then every time dessert is in front of you it’s hard to resist because you have to make that decision constantly, and it’s a painful decision. In that sense, dieting is very hard. However if you have made a clear commitment to eating no desserts, then it actually becomes easy because the sense of internal conflict is not there.With an unwavering commitment it’s a clear decision.
And how has this reputation for customer care helped Zappos build a competitive advantage?
It’s created an entirely new standard that competitors have to react to.We’ve heard about stories of customers asking why they can’t have services that they receive from Zappos.And it goes beyond our competition into other industries.
Can you talk about a few ways in which Zappos communicates its authenticity, and Zappos philosophy about communication?
While it may seem inefficient, we take a lot of time to communicate – with our teams, with departments and even the entire company. Four times a year the entire headquarters shuts down to talk, celebrate and talk about what’s coming next.Also, we share it with the world through ZapposInsights.com. By sharing it, we hold ourselves accountable to our own standards.
Picture an enterprise that has lots its way in recent years: increased employee turnover, too much diversification in products and services, decreased profits...what advice would you give them on re-discovering their authenticity?
Simplification is key.The company must be clear on what is important above all else, and what they are willing to stand for no matter the state of the business, the economy or even its own people. Without clear values, there will be constant initiatives, roll-out and strategies that never address the core issue.