Zappos Milestone: Customer Service

At Zappos, customer service is the first priority — no matter the cost.

When explaining’s almost-obsessive dedication to customer service, the e-tailers’ employees always seem to turn to real-life tales.

“That’s the Tony pizza story...” began Jane Judd, senior manager of the customer loyalty team, talking about a time when CEO Tony Hsieh asked his Skechers reps to call in after-hours to test his staffers and find out if they would track down late-night pizza places in their area. (They did, coming up with the names and phone numbers of the three closest options.)

“One of the craziest stories,” said Jerry Tidmore, who manages Zappos’ help-desk concierge service, “was that a guest checked in to the Mandalay Bay hotel [in nearby Las Vegas] and forgot her shoes.”

According to Tidmore, the guest called Zappos, where she had originally purchased the style, looking for a replacement, but they didn’t have any in stock. So the company found a pair in the right size at the mall, bought them and delivered them to the hotel — all for free. 

Such anecdotes are a testament to the company’s central tenet, which is written right under the Zappos logo on the Website: “Powered by Service.” And while most customers don’t call the company looking for pizza, Zappos takes its commitment to service seriously — sacrificing short-term profits for it, investing a minimum of four weeks of training for each employee and operating a 24-hour warehouse that is admittedly not cost-efficient.

The goal, Hsieh said, is to make Zappos’ customers very happy — and that leads to big cost savings elsewhere. “We let our customers do the marketing for us,” he said.

As Hsieh tells it, a few years after Zappos’ debut, he and several coworkers reevaluated the goals of the company. “We asked ourselves, what do we want to be when we grow up?” he said. “Do we want to be about something with a bigger vision?”

What emerged was a plan to put customer service first. At the time, drop shipments represented 25 percent of the company’s sales, but relying on outside parties to ship often meant long waits and no communication with shoppers.

So after a few years, in what Hsieh characterized as a “tough and scary decision,” Zappos gave up drop shipments — especially significant considering the company was not yet profitable.

Today, Judd estimates the company’s 342-person, round-the-clock customer loyalty team in Henderson, Nev., answers 5,000 calls a day, though that number grows significantly during the November and December busy season. They also answer 1,200 e-mails a week and monitor Twitter and social networking sites for mentions of Zappos, which they use to proactively reach out to potential shoppers.

Judd also oversees a resource desk team, which handles more complex requests such as getting the actual measurement of a heel or checking a color, as well as Spanish-language and Canada teams.

She said call center employees are given no time limits for their calls and are encouraged to “use their personal, emotional connection on every call.” For example, she said they might ask about the dog barking in the background or send flowers to a bride.

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