Zappos
This was as good a presentation about how to run a successful business than any I have ever heard.
Keep this presentation in a file. Back it up . If you are ever asked to give a business presentation
about what is important for running a successful enterprise… this is the model.
The Culture Book is particularly interesting (they are on the way and we should have them when you
return from holiday).
Please watch the videos in the Zappos file..particularly the 60 minutes and Oprah pieces.
Their web site is an excellent model for how to do e-retailing (almost as good as Gap…yes Gap). If
you want to keep up with the latest and greatest on e-retailing watch those sites).
I am planning a for credit trip to Zappos next Oct Break…(DC in KY…fly to Las Vegas…spend a day at
Zappos…spend a day at MGM or Mirage (seeing what they do)…some free time…home.
Here is what you learned:
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Zappos is powered by service (This is on all their product mailing packages): providing the best
service and online shopping experience possible, free shipping both ways, 365 day return policy,
fast fulfillment, expedited delivery, fast, friendly and expert customer service
Zappos is committed to wowing each and every customer.
75% of customers repurchase (I do not know if they have done the research but I would ask
them to find out why the 25% don’t come back…missed sales reports)
2.5% of people in US shop Zappos
Most new customers acquired heard about Zappos by word of mouth (43%). Treat each
customer as an individual and special creating an experience. (This suggests social media
campaigns..viral marketing…youtube…flickr…facebook.. etc)
Zappos posts their phone number on every single page of the website
Zappos refers customers to competitor’s website if they do not have the product the customer
wants. Customers remember this and come back to Zappos.
Zappos has one warehouse in KY which runs 24/7. (equivalent to 18 football fields)
As long as you have the service, you can sell anything.
Founded in 1999
Zappos has over 1100 brands, 150,000 styles, and 3 million pairs of shoes
Repeat customers order 2.5 times in next 12 months
Warehouse receives orders within 4 hours of being placed
After the 5 week culture program, Zappos offers the potential employees $2000 to walk away
right there if they don’t feel like they fit. Only 3% actually take the offer
Customer service is an investment, not an expense.
Every employee goes through customer loyalty training and has to do at least 40 hours on the
phone with customers.
Zappos
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24/7 800 number on every page.
No call times measures (this is very important. Many call centers have calltime goals (usually
short because that increases productivity. If these companies then say that customer sat is
important the reps are getting mixed messages and will do the thing that gets measured- usually
calltimes) , no sales-based performance goals for reps.
Reps have the power to do everything that managers can do for the customer
85% internet advertising
Commit to customer service, live and deliver the wow, come up with committable core value,
make wow part of your company’s everyday vocabulary, remember that customer service is an
investment…not an expense, trust and empower your customer service team, create a culture
book, great service to everyone, make culture part of everyone’s performance review, have the
entire company celebrate great service.
Most important: wowing the customer-word of mouth will result
Product sells itself. Zappos is there to help them find it
Commitment to core values is what drives the group: making a personal/emotional connection
with customer, doing more with less
Be yourself-easy to tell when someone doesn’t care much
Obvious that everyone working there wants to be there and is committed
Employees are treated well and work well in return
99% of customer will receive shipment within 24 hours
Great training classes-everyone gets a feel for all aspects of the company
Keep the work culture fun and like a family-it keeps people coming back to work and excited to
be there-leads to better customer and c-worker interaction
Everything sold on the website is actually in stock
Use quality analysis team to evaluate their customer service reps
Customer loyalty is very important. Repeat customers have higher average order sizes
Loyal customers become advertisements. Be nice to your customers so they speak highly of your
business
An average call is 5 or 6 minutes, which is higher than the industry standard
In DC (for those of you not in retailing that is Distribution center) Robots take the product to a
person who packs it
Zappos uses multi-angle photography when capturing their shoes. This gives a more in-depth
look at the product making the customer more comfortable with the purchase
Advertising spending runs 85% on the internet and 15% in print.
Zappos is a company that offers as much personal growth as well as company growth that they
can handle
7.4 million total purchasing customers
Zappos hopes to increase their sales from $850,000,000 in 2007 to $1 billion in 2008
Zappos is considered more of a service company that happens to be in the online retail industry
Serena Williams is just one famous person they use to wow their phone customers through
messages (Try the joke of the day)
Zappos
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The company encourages unsure customers to purchase more than 1 pair because of the free
shipping (I did not ask…what percentage of customer return those second and third items?)
Zappos asks interviewees how weird they are
Be open-minded about career options when interviewing: where you start is not where you end
up, don’t hold yourself to a certain job
They look for people with varied backgrounds….having experience and experiences is important
(If you were going to highlight that on your resume how would you do it? – (first 10 responses
that are effective get extra credit)
They take about 5000 calls a day (5000 x 365= a lot of calls)
Didn’t come up with core values just because they sound good
Nearly 4 million items in warehouse
New vocabulary: a Zapposer is someone who works at zappos.com
Now sells not only shoes, but also handbags and electronics (You can increase business by
selling more of the same thing…selling the same thing to more people…or increasing your share
of the customers wallet by selling different things). (Did you hear them say electronics returns
during a year period allowed).
Zappos is devoted to customer service as the basis of their mission – it’s not just one
department, it’s the entire company. It’s not the product, it’s the service.
Zappos encourages people in its culture to be adventurous, creative, open-minded, passionate,
determined, humble and to create fun and embrace change
Zappos has an intensive screening process to only capture and keep the true wow-ers.
There are no limitations on expense when it comes to serving a customer and correcting a
problem that might not even be Zappos fault, but they make it their problem to make sure the
customer is satisfied.
Zappos is not a business, but also a culture
Interviews are 50% based on core values and culture fit
They have a joke of the day. This helps build a comfortable relationship with their customers.
They have sent flowers to customers before who they knew were going through tough times.
Pretty impressive for such a large company.
Advertising through the internet is inexpensive and very efficient
Give great service to everyone: customers, employees, vendors, investors
Monitor calls to ensure customer satisfaction – must make a personal connection, ask if they
need anything else, and give correct information
Because Zappos offers free shipping, customers can order shoes in multiple sizes, try them on
and return the ones that don’t fit. This ensures the customer will actually be more likely to keep
a pair of shoes, instead of purchasing, returning and just giving up.
Employees have a personal choice on their growth and learning in the company
The way a customer is treated directly impacts their impression of the company
Only 6-7% of customers ever call in
Culture in business is one of the most important things to create a positive and enlightening
place to work, which creates great customer service
Zappos
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Be good to everyone in your business. It will make your job easier to do if you are good to
people
Open door policies with everything. No cubicles or walls.
Zappos return policy applies to all merchandise except electronics
First-time customers spend on average $111.98 (goes to $170 something on repeat purchasethis is a very important metric).
Been on Oprah, 60 minutes and Night Line
We are a service company that happens to sell everything
3.3 million have purchased in last 12 months
…and so it goes…good work
Yo