Zappos and Lululemon

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Chapter 11: Zappos: Taking Steps toward Maximizing Stakeholder Satisfaction: 11-4b Customer Service Book Title: Business Ethics: Ethical Decision Making and Cases Printed By: Toure Williams (taaw_15@yahoo.com) © 2019 Cengage Learning, Cengage Learning

11-4b Customer Service

What makes the Zappos business model unique is the company’s focus on customer service. The company established a method of serving customers and handling their issues distinctive from the rest of the industry. Zappos believes great customer service is an opportunity to make the customer happy.

Customers are encouraged to call Zappos with any questions. The number is displayed on every page of the website. According to Hsieh, Zappos encourages people to call the company because more interaction with customers increases their personal connections with the organization. Customer service representatives actively use social media sites such as Facebook and Twitter to respond to customer issues. Zappos also offers an app for customers to download. To encourage them to use the app, Zappos offers users 1-day free shipping simply for downloading the app to their devices.

Another key aspect of its customer service model is that nothing is scripted. Zappos employees have free rein in their decision making and are expected to spend as much time as they need to “wow” customers. They help customers shop, even on their competitors’ websites, encourage them to buy multiple sizes or colors to try (since return shipping is free), and do anything it takes to make the shopping experience memorable.

Zappos’s customer service representatives develop relationships with customers and make them happy. Stories about great customer service include customer support calls that last for hours, sending flowers to customers on their birthdays, and surprise upgrades to faster shipping. Some extreme cases included Zappos hand-delivering shoes to customers who lost luggage and to a groom who forgot the shoes for his wedding. Zappos has even sent pizzas to the homes of customers who tweeted to the company about being hungry.

Zappos believes great customer experiences encourage customers to use the store again. In addition, its long-term strategy is based on the idea that great customer service will help it expand into other categories. While around 80 percent of company orders come from shoes, the markets for housewares and apparel are much larger. The company says it will expand into any area it is passionate about and meets customers’ needs.

The company considers word-of-mouth marketing to be the best way to reach new customers. With over 75 percent of purchases made by repeat customers, it is evident that the Zappos mission to “provide the best customer service possible” works well for the company. Zappos has also engaged in forms of buzz marketing to spread the word. At one of the annual “Life is Beautiful” festivals in Las Vegas, Nevada, Zappos developed a Porta Party. This Zappos-branded mobile restroom included 40-inch waterproof television monitors, a “selfie station,” and prizes such as gum, whistles, and glow sticks given each

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time the user flushed. This fun and unusual public relations initiative was a hit among consumers and fit in well with the firm’s zany culture.

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