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Zappos.com is a privately-held online retailer of shoes, clothing, and other soft-line retail categories. On July 17, 2009, Amazon.com's Board of Directors approved the offer to merge the two companies. Amazon had been proposing the merger with Zappos since 2005, in the hope that a merger would enable Amazon to expand and strengthen its market share. However, Zappos held back feeling it was not the right time then. Amazon's offer was laid on the table and Hsieh and Lin, Zappos' CEO and COO, respectively, must decide on whether to recommend the merger to the company's board on their upcoming meeting.
Frances X. Frei; Robin J. Ely; Laura Winig
Harvard Business Review (610015-PDF-ENG)
October 20, 2009
Case questions answered:
- What makes Zappos.com’s customer service so special?
- What organizational choices help Zappos deliver superior service?
- What is the role of culture at Zappos?
- How did Zappos reconstruct the online shoe retailing?
- How does Zappos make money?
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Case answers for Zappos.com 2009: Clothing, Customer Service, and Company Culture
1. What makes Zappos.com’s customer service so special?
At Zappos.com, the main focus & strategy has been company culture based on 10 core values through which a realm of appreciated customer loyalty is created. Zappos believed that the company’s rapid growth was due to its repeat customers who were responsible for 75 percent of orders. For 96 percent of sales placed, customer service took the form of fast, free shipping (in both directions); a wide selection of more than 1200 brands (2.9 million products in inventory); the availability of special sizes; and highly intuitive, consumer-friendly interface.
The marketing departments at Zappos have a personal relationship with vendors & work together to represent all products offered to customers. Zappos provides 365 days return policy giving the customers freedom of time and choice. Zappos to date surprises its customers through overnight deliveries.
Zappos cherishes a personal emotional connection (PEC) with customers through the customer loyalty team (CLT) who handled an average of 5100 calls per day. The CLT members were called problem solvers since they addressed queries of customers which they could not answer for themselves.
In traditional call centers, a time limit is imposed on workers to finish the customer call whereas, in Zappos, no such limit exists.
The management doesn’t want its customers to feel rushed which ultimately might result in word of mouth communication for new customers. After such conversations, CLT members routinely sent hand-written thank you notes to customers and bouquets of flowers or boxes of candy in sympathy or celebration. This helped in strengthening the…
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