Marketing Case Studies

Zappos – Delivering WOWs

Zappos – Delivering WOWs

The digital age has forced companies to re-evaluate their marketing strategies as consumers and competition became more sophisticated. Companies are in constant search for new ways to capture the attention of consumers and influence their purchasing decisions. In this series of articles, I would try to bring out some stellar and innovative work on digital marketing for all of us to learn from them.

When choosing to learn from others, it is always helpful to choose one of the best. Few that stand way above the crowd. Zappos is certainly one of those in this category.

Zappos was founded by Nick Swinmurn in 1999. The initial inspiration came when he couldn’t find a pair of brown Airwalks at his local mall. Tony Hsieh and Alfred Lin invested in the firm and the company was officially launched in June 1999, under the original domain name “ShoeSite.com.”  A few months after their launch, a very important strategic move was made which deserves mention. They realized that the systems they were building can be extended to any category and by naming themselves ShoeSite, they are limiting their growth to a single category. The company’s name was thus changed from ShoeSite to Zappos (a variation of “zapatos,” the Spanish word for “shoes”).

The main pillar of the marketing strategy of Zappos is word of mouth. Taking a step back from Zappos, word of mouth is the easiest thing to mention in a marketing strategy slide while being one of the most difficult things to actually achieve. Most consumers have the tendency to be very vocal when they have a bad experience with a brand, while a good experience may not find any mention at all. With this in mind, you will appreciate even more what Zappos has been able to execute.

Once you set up a mission to generate word of mouth, you realize that just a good experience is not enough. You need to deliver a WOW experience to your consumers for him/her to be motivated enough to mention the good experience. To make it even tougher, you have to aim to deliver a WOW in each customer interaction you have so that you are able to build a community of advocates for your brand.

The whole organization of Zappos has been designed around this mission and a few examples of practices they follow would be discussed here. We would also explore a few aspects of how Zappos amplifies word of mouth across various platforms.

  1. Customer DelightRight from its early days, Zappos diverged a significant portion of its marketing budget on customer service. By 2015, it is estimated that, on average, Zappos employees answered 5,000 calls a month, and 1,200 e-mails a week, while in holiday season call frequencies increase even further. Call center employees don’t have scripts, and there are no limit on call times. The longest call reported is 10 hours 29 minutes.  In addition to this, Zappos employees are encouraged to go above and beyond traditional customer service. As a particularly famous example, after a late night of bar hopping and closed room service, Hsieh bet a Skechers rep that if he called the Zappos hotline, the employee would be able to locate the nearest late-night pizza delivery. The call center employee, although initially confused, returned two minutes later with a list of the five closest late night pizza restaurants. Inc. Magazine notes another example when a woman called Zappos to return a pair of boots for her husband because he died in a car accident. The next day, she received a flower delivery, which the call center rep had billed to the company without checking with her supervisor.

    In another famous example, a newly-married couple were packing up their belongings in preparation for moving. The husband packed his wife’s jewellery inside one of her purses, and packed the purse inside what he thought was a spare Zappos box. The wife, it turns out, was intending to return that purse to Zappos using that very box. Which she then does, having no idea that inside the purse now were several thousand dollars of her jewellery!

    When the couple arrive at their new home and start to unpack, bedlam breaks out as the wife figures out what has happened and why her jewellery is missing. The rep she reaches at Zappos decides to reroute the box directly to his desk, but once it arrives, the rep fears for the safety of the valuables if he were to ship them, and purchases a plane ticket to hand-deliver the package himself. When he arrives, the incredibly grateful couple invite him in for dinner. Now they’re customers for life, as you can imagine.
  2. Everyone loves ‘Surprises’All online retailers offer the service of tracking your order. You know the approximate days it will take for your order to reach you. Most companies consider it gold standard to meet the expected timelines that have been displayed to the consumer.

    People like getting things for free and like them even more when they are viewed as ‘favours’.  But even more, they love receiving these favours as surprises.

    Zappos often gives “surprise” free upgrades to overnight shipping for customers, though their website reports that delivery will take two to five business days. The WOW generated at that instant can be measured by the success of Zappos’s strategy.

    Zappos also send surprise deliveries by celebrities to customers.


    In the above image, DJ Khaled is seen making a delivery to a surprised woman in Foxborough.
  3. Engagement on Social MediaWith a strong presence on multiple social networks, the brand has set a high bar when it comes to being social and engaging its customers. They are at or near the top of nearly every major brand ranking in customer service and social media.

    When Zappos uses an example of their customer service, it shares it on Google+, posts it to Facebook, tweets it on Twitter, and pins it on Pinterest. It clearly goes to where all its customers like to hang out. Cross-promotion is more valuable as the world becomes more digitally focused.

    Each network provides an opportunity to reach their audience in a new channel. Integrating their strategy on each is crucial to increasing visibility and promoting the brand.

    In addition to this, to make the interaction engaging, the replies by Zappos are funny, adventurous, creative and sometimes even weird. This makes the customer service less of a formality and more of a conversation.

    Zappos created a twitter handle used solely for customer support. It responds to customer replies quickly, on a regular basis, and with a dash of charm. Zappos also does a great job of responding to negative reviews by showing empathy and then exceeding expectations. For example, take the interaction below.


    Making a public apology and customized solution strengthens a company’s reputation as a brand that truly cares about its customers.

    Even after delivering a WOW, they take care to reply to appreciative comments that too with their dash of charm.


    Various examples of funny and wacky replies can be found on their twitter handle.
  4. Some other insightsVarious other steps Zappos has taken, which are also commonly implemented by other companies. Few of them are discussed here.
    – Zappos has created a hub called “The_ONES” to highlight inspiring women and their favourite classic sneakers. This page does not come across as an ad hyping up their products. Instead, they are personalized narratives about the lives of amazing women who also happen to love classic sneakers.
    – Creating a memorable and engaging experience is the best strategy for any social media campaign. Zappos often runs sweeptstakes on all its social media platforms. During a Twitter contest, a participant had to tweet at a specific time to win $2,500 shopping spree and video consultation with a Zappos stylist. This expands their reach as millions of twitter followers shared the contest and took part in the excitement.

    – Zappos has a dedicated page for Twitter on its site that’s linked to from every other page on the site with the words “What are Zappos employees doing right now? “ There you’ll find all of the Twittering Zappos employees’ most recent messages. Employees tweet about what they are doing at work and about interesting resources on and off the Zappos site. These comments contain internal links to every page on the website. This increases search engine rank and promotes products at the same time.

    The estimated revenue of Zappos is $2 Bn annually however; there is an even bigger measure of the success of the marketing strategy of Zappos. The primary sources of the company’s rapid growth have been repeat customers and numerous word of mouth recommendations. Of its customers, 75% are reported to be repeat customers. (There are multiple ways how this 75% can be looked at. Let’s discuss this at the end my next blog in this series). This huge repeat customer base is what proves that each of these customers have received a WOW and they keep coming back for more.
    A whole different study would be required to explore the unique organization structure and working culture that Zappos has adopted to keep their employees engaged and charged to continuously deliver WOWs.
    Would be back with another company to learn from. Till that time, in true Zappos style:

References:

Authored by Siddhartha Banerjee, Co-founder, GoCrackIt
Login to GoCrackIt now to interact with our mentor Siddhartha

  1. https://www.forbes.com/sites/micahsolomon/2017/06/12/tony-hsieh-spills-the-beans-the-one-word-secret-of-zappos-customer-service-success/#3deab96c1acc
  2. https://www.forbes.com/sites/blakemorgan/2018/03/28/stronger-and-smarter-a-look-back-at-customer-experience-with-zappos/#558bb6e339fb
  3. https://www.zappos.com
  4. https://www.singlegrain.com/digital-marketing/best-online-marketing-companies/
  5. https://www.jeffbullas.com/6-ways-zappos-uses-twitter-to-increase-sales/
  6. https://sites.google.com/site/yiolan83315/home/zappos
  7. https://www.customdesignpartners.com/case-study-zappos/
  8. https://digitalsparkmarketing.com/zappos-marketing-strategy/
  9. https://www.forbes.com/sites/micahsolomon/2017/08/01/three-wow-customer-service-stories-from-zappos-southwest-airlines-and-nordstrom/#38db5dc62aba
  10. https://www.bostonglobe.com/lifestyle/names/2016/06/06/that-time-khaled-appeared-your-doorstep/oPbfmtmnfgtmyTyR6g55IK/story.html

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