Zappos Milestone: Customer Service

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

To achieve that level of interaction, Zappos has made training a priority — for the entire company. Rachel Brown manages the Pipeline team, Zappos’ in-house training program, which has grown from one week in 2005 to four full weeks in 2008.

The first week of training includes everything from how to work the phones to special seminars on Zappos culture and core values. Seminars on customer service and in-depth call center training start in week two. And employees who will stay in the call center get another three weeks of training on the phones.

The goal, Brown said, is to tell the new employees to “forget about all your other jobs, especially if it’s another call center,” she said. “We have to restart the engine the Zappos way.”

All of this requires an investment. Training doesn’t come cheap, even though, as Judd pointed out, the companywide requirements mean that during the holiday rush staff members from every department can help out (including Hsieh, who, Judd said, worked three hours in the call center last year).

“The training and education, the free shipping both ways, the surprise [shipping] upgrades, that’s very expensive. Our warehouse is 24/7, which is purposely less [cost] efficient, but faster,” Hsieh said. “Our whole point of view is [to look at it] as our marketing costs, but they all have extra costs.”

It’s a smart strategy, said Karen Leland, president of Sterling Consulting Group in Sausalito, Calif., and co-author of “Customer Service for Dummies” and “Customer Service in an Instant.” “It costs five times more to get a new customer than to retain an old one,” Leland said. “Anytime you have to spend marketing dollars, the financial benefit is high to retaining an existing customer.”

In fact, Leland has her own Zappos story. A recent purchase of red patent peep-toe pumps she ordered from Zappos didn’t fit, and she exchanged them for the right size — a transaction she said the company has mastered.

“They made it easy when there was a problem. And the true measure of a company is how they handle it when things go wrong,” Leland said. “They made a loyal customer out of me. A shoe is just a shoe, but they’re adding value to the shoe through the service.” 

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