Zappos Customer Service has a strategy to beat

The Customer Service Strategies Behind Zappos’s Success

If you’ve ever shopped on, you know the site isn’t flashy. It’s simply an ecommerce store boasting popular, brand-named items like Adidas running shoes and Calvin Klein bags. Zappos doesn’t dump half of their budget into advertising, and they don’t offer new coupons or discounts after every purchase.

On the surface, Zappos appears to be an average ecommerce company with a presence that’s comparable to competitors. And yet, Zappos is a household name – one that reached $1 billion in sales in less than 10 years. And that’s because their phenomenal customer service speaks for itself. The power behind the Zappos brand and abounding success is the team of customer service agents who WOW customers. They make incredible connections with the people who reach out to them each day.

Zappos’s CEO Tony Hsieh’s takes an unconventional approach to customer service. In fact, Zappos culture was once perfectly described as being proudly-weird. He doesn’t analyze the expense of customer service or the contact center. He ditches the all-too-common mentality that the job of a contact center is to operate at the lowest cost, highest efficiency possible. Actually, the metrics he cares about have nothing to do with efficiency. Instead, they have everything to do with how satisfied a customer is at the end of a service interaction. Agents don’t use scripts and they never upsell.

Zappos’s customer service has one, simple goal: to deliver happiness.

The customer service strategies behind Zappos’s success:

Create a culture of people who believe in your company’s values.

Zappos developed a set of key values at the heart of their company culture and every action employees take. Job candidates are thoroughly interviewed and screened to ensure their values match those of Zappos, and they test new employees’ commitment by offering them money to quit after 2 weeks of training.

If the employee doesn’t take the $2,000 payout after two weeks, Zappos leaders introduce them to an entirely human way of work. Zappos creates a culture of caring and friendship by treating their employees well. Their dedication to customer happiness starts with employee happiness. They encourage a fun environment filled with co-creation, and they offer employees valuable incentives, like: continued learning through Zappos University, the opportunity to find a new career path with internal Shadow Sessions, a network of life coaches, flexible work schedules, and volunteer opportunities.

To develop a great culture, you have to create a set of core company values for your company to rally around. To develop a company’s values, Hsieh recommends starting with personal values. Then, translate those into the corporate values that guide a company. Check out Zappos’s Values, here.

Understand your customer base.

Zappos’ customer base is incredibly loyal – even discounts and regularly-dished-out coupons from competitors typically don’t sway them. In fact, 75% of Zappos’s purchases come from returning customers. In their customers’ eyes, the promise of great service is worth the extra pennies. Not only are Zappos’ customers loyal, but they’re brand advocates and promoters, too. An impressive 44% of new customers heard about Zappos via word of mouth.

Empower your agents to WOW customers.

Would you allow your call center agent to do the following without approval?

  1. Talk to a customer on the phone for 10 hours and 29 minutes.
  2. Send “get well soon” flowers to a customer’s ill mother on the company’s dime.
  3. Refund a customer for a defective product, and then send a replacement for free.
  4. Send a care package to a soldier in Afghanistan who called to exchange his shoes.

Zappos would.

Hsieh explains:

“I think the main thing is just trust [the customer service reps] and let them make their own decisions. Most call centers are set up by policies and so the actual person that’s answering the phone doesn’t really have the ability to do anything. If you…call most customer service places, if you ask for anything that’s not normal they have to talk to a supervisor or just say ‘oh our policy doesn’t allow that’ and whatever. So we generally try to stay away from policies, we just ask our reps to do whatever they feel is the right thing to do for the customer and the company. And that’s actually really uncomfortable for a lot of reps that come from other call centers. We kind of have to untrain their bad habits.”

Zappos loosens the reins and puts employees closest to the customer in control of that customer’s fate. But that employee empowerment doesn’t come naturally. It takes tons of training and coaching (or untraining, according to Hsieh) to empower employees to make in-the-moment decisions that benefit customers AND the company.

The key here is the emphasis on culture and training rather than on strict policies and procedures. The need to always ask for approval or squirm around a policy is too restrictive for agents. Further, it often leads to a negative customer experience. To deliver happiness to your customers, the internal and external ones, make it easy for your call center agents to do what’s right for customers.

What does it mean to deliver happiness to customers?

Zappos agents love their jobs because they’re empowered to get creative to make their customers happy. We’re not talking the happiness that comes with the casual 15-minute phone or email conversation. Zappos agents pride themselves on delivering true happiness. And, that often means connecting with customers outside of their short customer service interactions. In fact, Zappos has a dedicated space on their website where agents can share their customer stories. From the story of an agent’s 10-hour phone call where service was put before metrics to tales of surprise packages and thank you cards, you see how much agents love making a positive impact.

One of our favorite stories is from an agent named Kelli:

Kelli is a perky agent who works the late shift. She got a live chat message from a customer at 4:30 a.m. Some agents would be dismissive and rush through an interaction that early in the morning, but not Kelli. Through her conversation with her customer, Tommy, Kelli learned that Tommy is in the military. He’d ordered a pair of shoes to wear while he’s in Afghanistan. She talked to him for nearly two hours – exchanging stories and learning of Tommy’s nickname, gummy bear. After Kelli shipped a new pair of shoes to Tommy and ended their convo, she felt the urge to do more.

“Our chat eventually ended, and although I was able to WOW Tommy that day with a simple shoe exchange, my heart told me to do more.

Thus, I decided to send him a care package, and in it, I included a Zappos culture book, Rice Krispies treats, a five-pound gummy bear and a 12-inch, hand-stitched teddy bear that I aptly named Tommy.”

As if it could get much better than that, Tommy sent a thank you letter and pictures to Kelli, and so did his Colonel. The base commander told Kelli that people like her make such a difference in the soldiers’ lives. And, her simple act of kindness boosted the morale of his entire unit. Because of this, Kelli recruited help from her fellow Zappos agents, and they sent dozens of packages, supplies, and thank you cards to all the soldiers at Tommy’s base for the holidays.

Kelli delivered true happiness to Tommy and many more, all because of one simple, human conversation.

Zappos sets the bar.

Customer experience is so important that, by 2020, it’s projected to overtake price and product as a company’s key brand differentiator. Companies known for their customer service, like Zappos, set a standard in service that other companies have to match now, too. If Jenny buys shoes from Zappos and gets a hand-written note with a package of gummy bears in the mail from the agent she spoke to, she’s going to expect that same level of service when she buys a vacuum cleaner from a different company next week.

Keep Zappos’s success in mind if you decide it’s time to re-evaluate your customer service strategy. Their billion dollars in sales and thousands of raving fans certainly prove that employee empowerment and a positive culture lead to customer happiness.

Find out how to make your internal customers happy, first. Read our blog post on 7 ways you can optimize the agent experience.

We originally published this post on September 9, 2016, and we updated it on September 26, 2018.