November 26, 2012

“If we get the culture right, then everything else, including the customer service, will fall into place.” – Tony Hsieh, CEO at

The idea: an excellent example of customer loyalty program which is suitable even for small companies

At Zappos they don’t measure call times, don’t force employees to upsell, and don’t use scripts! The longest call took almost 6 hours and nobody was upset about it.  In fact, Tony Hsieh, the prodigious CEO of the 1-billion revenue online shoe retailer, takes great pride in their “a little weird” and outside-the-box approach to making customers happy.

Weirdness alone, however, could not explain the success of a business that started from a simple idea, to sell shoes via the internet, and hit $1 billion in annual sales in 2008.  Zappos was so successful that it was acquired by Amazon at the end of 2009 for a reported $1.2 billion.  The secret of this success was Zappos’ obsessive dedication to customer service and their organisational culture that started with the idea of constantly wowing the customer.

Tony frequently spells out Zappos’ obsession to make the customer happy using his pizza story.  After a Sketchers sales conference, Tony and his vendors returned to a hotel room late and someone in the group was craving pepperoni pizza.  Since room service had ended, Tony suggested calling Zappos to test if his staffers could help with delivering pizza in Santa Monica in the middle of the night.  The customer service rep who answered the phone was a bit confused at first but she quickly recovered and put them on hold.  Two minutes later she returned the call and listed the 5 closest pizza places that were still delivering at that time!

For Tony Hsieh, customer loyalty is a business model rather than the objective of one specialised department.  As Tony wrote in his bestseller, customer loyalty and company culture are two sides of the same coin.  The standard approach to customer service is not good enough for a business constructed around the idea of delivering the best possible experience for its customers.  Zappos does not have a customer service department like other online shops.  They created instead a customer loyalty team that is the core of the whole business.  Notably, this means among other things that all newcomers to Zappos, be it an engineer or a sales rep, would answer customer service calls as part of their training.

The leaders of Zappos understood the limitations of the prevailing concept of customer service and took the idea of customer satisfaction to a whole new level.  This implied that instead of relying on flashy ad campaigns, the company put its faith and money in developing an unmatched customer experience.  The marketing dollars were used for sustaining the free delivery, free returns and 365-day return policy.  Word-of-mouth did the trick and Zappos’ reward was bountiful.  More than 70% of Zappos’ sales come from returning customers, and repeat customers order 2.5 times more in the following 12 months.

You can find some inspiration for your business by taking a look at their main customer loyalty commandments.  These commandments have to be understood in connection with the core values of the company, as described in Zappos’ Culture Book.

Lesson from Top 10 Ways to Instil Customer Service into Your Company*

  1. Make customer service a priority for the whole company, not just a department. A customer service attitude needs to come from the top
  2. Make WOW a verb that is part of your company’s everyday vocabulary
  3. Empower and trust your customer service reps. Trust that they want to provide great services because they actually do. Escalation to a supervisor should be rare
  4. Realize that it’s okay to fire customers who are insatiable or abuse your employees
  5. Don’t measure call times, don’t force employees to upsell, and don’t use scripts
  6. Don’t hide your 1-800 number. It’s a message not just to your customers, but to your employees as well
  7. View each call as an investment in building a customer service brand, not as an expense you’re seeking to minimize
  8. Have the entire company celebrate great service. Tell stories of WOW experiences to everyone in the company
  9. Find and hire people who are already passionate about customer service
  10. Give great service to everyone: customers, employees, and vendors

Organisational culture at Zappos: 10 core values*:

  1. Deliver WOW Through Service
  2. Embrace and Drive Change
  3. Create Fun and A Little Weirdness
  4. Be Adventurous, Creative, and Open-Minded
  5. Pursue Growth and Learning
  6. Build Open and Honest Relationships With Communication
  7. Build a Positive Team and Family Spirit
  8. Do More With Less
  9. Be Passionate and Determined
  10. Be Humble


* Excerpts from Delivering Happiness: A Path to Profits, Passion, and Purpose by Tony Hsieh

photo by: Robert Scoble


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