Chat with us, powered by LiveChat
Order now

If the Shoe Fits (and Even if It Doesn’t): Customer Service at Zappos

Read the case “If the Shoe Fits (and Even if It Doesn’t):  Customer Service at

Zappos” at the end of Chapter 14.


Answer the following questions and/or statements in detail:


1. The great customer service at Zappos increases costs — free same-day shipping; extensive employee training; and so on.  Do you think the company can reduce costs in other areas of operations to help offset these costs?  If so, how? Use credible sources and research to support and explain.


2. By off-shoring its customer call center, even if Zappos offers wages and perks much higher than the going rate, it would stand to save substantial amounts of money.  Do you think Zappos should consider this?  Why or why not?  Use credible sources and research to support and explain.


3. In what other ways do you think Zappos can affordably enhance its customer service?  Use credible sources and research to support and explain.


Make sure you format your papers in proper APA 6th. Be sure to properly cite your sources inside your text using APA 6th citations rules as well as proper APA referencing guidelines  in your “References” (bibliography) section at the end of your papers.



If the Shoe Fits (and Even if It Doesn’t):


Customer Service at Zappos




One day in 1999, at the height of the dot-com boom, Nick Swinmurn


went shopping for shoes in San Francisco. Despite spending hours


going from store to store, he couldn’t find the shoes he wanted.


After returning home empty-handed, Swinmurn tried shopping


online but found himself defeated there as well. Online stores of


every type were springing up, but none was devoted to a huge


selection of shoes. Swinmurn saw a market opportunity from his


personal need and knew that the investment environment at that


time made substantial growth possible.


Although potential investors were initially skeptical that anyone


would buy online something as individual and difficult-to-fit as a


pair of shoes, Swinmurn had research showing that 5 percent of


shoes were already being sold through mail-order catalogs, and that


shoes were a huge market. He received a $500,000 investment, and


he and his investors—one of whom, Tony Hsieh, would later become


co-CEO—changed the name of the company from to


Zappos—reminiscent of the Spanish word for shoes, “zapatos.”


Swinmurn’s original idea was to offer the absolute best selection


in shoes. Selection would be the company’s competitive advantage.


But when Zappos couldn’t get a number of shoe brands to


participate, the company realized it had to differentiate, based on


customer service. From the beginning Zappos offered free shipping.


When someone ordered ground shipping, Zappos sent it overnight



instead, amazing the recipient. The company also offered free return




shipping—and accepted returns up to a year after purchase. The


goal was to surprise and wow customers…and to get them talking


about Zappos.


Yet all this was costly. Shipping is extremely expensive, and twoway


shipping significantly reduces profit margins. Zappos believed



in delivering purchases quickly, which is also expensive. One way




Zappos reduced its cost was to use “drop-shipping.” In other words,


the manufacturers (or their distributors) sent orders directly to the


customers from their own warehouses rather than from Zappos’.


The advantage, of course, was that Zappos could maintain far lower


inventory levels—thereby reducing costs. But it also had far less control


over the customers’ experience. Shipments would come from


different sources; they could be slow, lost, or just plain wrong.


So in 2002, Zappos built its own centralized distribution


warehouse next to a UPS facility in Kentucky. That meant that


orders could often be shipped out the same day they were


received. And the next year, the company discontinued the


practice altogether of drop-shipping from other companies.


Zappos also realized it needed to make sure its customer


service representatives were well trained, highly customer


motivated, and passionate about the company. The company


instituted above-industry salaries, extensive training,


and lots of extra perks for employees. New Zappos hires


are put through a five-week training course (extraordinarily long


by industry standards) to ensure that they are fully immersed in


corporate culture, customer service, and distribution skills. Then,


at the end of their training, they’re offered $2,000 to leave. Anyone


not completely enamored of the company is encouraged to take



the money and go. Few do. (In 2011 Forbes ranked Zappos 15th on




its list of the 100 best companies to work for.)


Another way that Zappos differed from the industry was in how


it treated call center workers. Unlike in other call centers, calls to


Zappos are not timed, nor do the call center workers have to meet


minimum sales goals. In the end, all of this paid off. With lower


turnover—the company’s call center turnover is under 7 percent,


compared to 150 percent industrywide—Zappos saves considerable


dollars in recruiting, hiring, and training costs.


Another way Zappos keeps costs down is by eliminating errors.


Employees are rewarded when spotting potential mistakes in shipping


or warehousing. Without the need to correct costly mistakes


after the fact, operational expenses are also kept in line.



Zappos considers customer service an investment, not a cost center.




Although returns amount to approximately 35 percent of overall


revenues, 75 percent of orders come from repeat customers, who


typically buy, on average, 2½ times within a year, spending more


each time.


By depending on happy customers to spread news of the company


through word-of-mouth marketing, Zappos also keeps its


advertising budget low. A full 43 percent of new customers come


from word of mouth.


Zappos was first profitable in 2006, and since then has had an


unbroken record of profitability. It was acquired by Amazon in 2009


(a short 10 years after its founding) for about $1.2 billion, and is



operated as a wholly owned subsidiary.

Place a similar order with us or any form of academic custom essays related subject and it will be delivered within its deadline. All assignments are written from scratch based on the instructions which you will provide to ensure it is original and not plagiarized. Kindly use the calculator below to get your order cost; Do not hesitate to contact our support staff if you need any clarifications.

Whatever level of paper you need – college, university, research paper, term paper or just a high school paper, you can safely place an order.