Delivering Loyalty: 10 Lessons From Zappos.com

Zappos.com is more than an electronic shoe store. It is a supportive community that happens to put you in a pair of great-looking shoes.

Somewhere in creating what is now one of the leading online retailers, founder Tony Hsieh established a state of mind ­– and ideal stemming from his own pursuit of happiness. Today, with 8 million products in inventory – from shoes to apparel – Zappos.com ships more than $1 billion in merchandise annually, each sent with the sole mission of delivering the same happiness.

I was lucky enough to take a guided tour of Zappos’ headquarters and call center on a trip to Las Vegas, and I left practically dizzy, not only from the sensory overload, but from the brilliance of the company’s customer engagement philosophy. In essence, Zappos generates loyalty by being loyal – to its customers, its community, its shareholders and its staff.

1. Zappos makes it easy

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By eliminating shipping fees on returns, Zappos has removed one of the main barriers to ordering shoes online: size. Not only can shoppers order several different sizes and then send the misfits back for free, Zappos’ call center employees encourage it. The company also issues 1,000 return labels daily for customers who can’t print them online.

2. Zappos doesn’t leave you waiting

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Zappos executives intentionally decided to build their central warehouse in Louisville, Ky., so that it could be strategically located directly next to one of the nation’s largest UPS facilities. Every UPS package passes through this location, so by being next door, each Zappos.com order arrives at the customer’s doorstep within two days.

3. Full of surprises

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The Zappos team is given complete freedom to do whatever they think is necessary to create a PEC (personal emotional connection) with every customer. This often means they extend creative signs of appreciation, from waived shipping fees to a bouquet of flowers. During our tour, I came across a call center employee in the midst of creating a card for a customer who said her dog was going into surgery.

4. Makes heroes of its employees

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Three key components shape the employee experience at Zappos: trust, empowerment and compassion. Zappos gives its employees free rein to make their own customer service decisions, even if that means spending hours with one caller. An on-staff life coach, meantime, works with all employees to set and achieve both personal and professional goals.

5. Zappos knows its customers

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Zappos employs many of the tactics required to better understand and appreciate its customers. For instance, separate teams are assigned to handle calls, email, live chat and returns. The company is also experimenting with routing its customer calls based on area codes, enabling its agents to specialize in geographic regions.

6. Zappos shares

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At Zappos Insights, outside organizations are taught how to improve their culture, their call centers and their customer experience. The basic tours of the Las Vegas headquarters are free, and attract 15,000 people each year. For an added fee ranging from $47 to $4,000 per person, Zappos offers everything from a Q&A with its Insights Team to a full day of training, plus coaching, with various key departments.

7. Zappos gives back

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Tony Hsieh grabbed headlines when he announced that Zappos would relocate its headquarters to downtown Las Vegas – on his dime. The CEO is investing $350 million of his own money in downtown Las Vegas. Further, programs such as Project Read encourage donations to support important causes. Contributors can take a book for their $10 donation, which Zappos doubles.

8. Zappos recognizes the VIP

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Zappos does not operate a loyalty program, but it has launched its VIP program to recognize especially loyal customers. VIP customers get free next business-day shipping on all of orders; they are pushed to the front of the line when call volume is heavy; and are sent email notifications when “hot” merchandise comes in. But be patient, there is a waiting list to join.

9. Zappos comes to its vendors

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Zappos knows that business travel can be a grind, so it applies the same service that distinguishes its customer relations to its vendor partners. The company provides a fleet of transportation to shuttle vendors and suppliers from the airport to headquarters – by way of 17 shuttles or cars, a golf cart or a tractor. But take note: At Zappos, no ties allowed.

10. The Zappos Core Values

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Rather than adhering to a mission statement, Zappos sets its moral compass to 10 core values, such as ”Be humble,” “Deliver WOW through service,” and “Be Passionate and Determined.” These core values were actually culled down from an original list of 30 such values, all of which were submitted by employees.

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