Zappos defines themselves as “a service company that happens to sell clothing, handbags, shoes, accessories, housewares….”
The company’s #1 core value is “deliver WOW through service.” That’s the true value proposition. Zappos doesn’t call their call center a customer service department, it is the customer loyalty department. Unlike traditional call centers, the Zappos team doesn’t have call time limits (in fact, their longest call was 8 hours and 28 minutes, but that was an extreme outlier). The team doesn’t have any sales performance goals. They are there to satisfy their customers, period.
The proof is in the pudding.
+ Customers come back – approximately 75% of purchases are from returning customers.
+ Customers come back, order more often – repeat customers order >2.5x per year.
+ Customers come back, order more often and order more – repeat customers have higher average order size vs. 1st time customers
Another interesting fact is that their most profitable customers are those that have the highest product return rates. Go figure!
It’s no surprise that Zappos hit $1B in revenues prior to their 10th anniversary and revenues continue to grow exponentially today.
Since the company has been transparent about the key to their success, I continue to wonder why other companies haven’t embraced service and loyalty as their value proposition. After all, the key to sustainability is about creating value for your customers and building long-term, profitable customer relationships. Zappos has the formula for how to do it right. When will this type of focus become the norm, rather than the exception?
Via Len Netti