Why Zappos.com is A Service Star

Mar 19, 2008 8:10 PM  By

If you build a company on the basis of service, you can branch into other areas, says Alfred Lin, chief operating officer/chief financial officer of the $850 million shoes merchant Zappos.com. “So we think of ourselves as a service company that just happens to sell shoes, handbags, and related items.”

This philosophy didn’t come to Zappos.com at the very beginning, Lin admits. “When we started (in 1999) it was selection that was the driver; we were drop-shipping to customers–taking orders from our customers online and having them fulfilled by brand partners. But we realized that wasn’t the best customer experience; we couldn’t guarantee the most accurate inventory or control shipping.”

Over time, Zappos began to inventory more and more and more. “It took a few years to switch over to stocking and fulfilling our own inventory,” Lin notes, “but once you stock inventory you have to have the capacity in place.” The changeover to a service focus grew into the “WOW Customer Experience”-a name that is not just hype, says Lin: “We called it that because customers started to say ‘wow!’ “

And it’s a philosophy with teeth. “We will do anything we can to satisfy the customer,” Lin says. “A lot of call centers base metrics on the number of calls someone takes or how long it takes to process the call. We don’t hold to those metrics; we care about if they ‘wow’ the customers.”

What’s more, the company warehouses its entire inventory–a wide selection of more than 915,000 unique items–to ensure that its customers receive exceptional service from beginning to end.

And anybody employed in Zappos.com’s Las Vegas office has to go through four weeks of customer training, then spend time in the distribution center, located in Shepardsville, KY. In the DC, says Lin, “they get to do all the operations of picking, packing, returns-they get to understand every aspect of the business before they start their job.”

This applies to everybody, Lin notes, from accountants to lawyers to call center. And it works both ways: “Fulfillment employees also come to Las Vegas when we can arrange it, for a week of training to understand what’s going on in all the departments,” he says.

Alfred Lin will deliver NCOF’s Tuesday Luncheon Keynote, “Delivering the WOW Customer Experience” on April 8.