Extending the Customer Experience

by: @krianbalma

Zappos at a Glance
Background
Founded in 1999
1400 employees (half in Las Vegas headquarters, half in Kentucky)
Zappos is “Powered by Service”
Providing the best online shopping experience possible.
Fast, Free Shipping . Free return shipping. 365-day return policy.
Fast fulfillment. Expedited delivery. Fast, friendly & expert customer service .
Selection!!!
Over 1200 brands, over 200,000 styles, over 1,000,000 unique UPCs.
4 million items in warehouse
Photography in multiple angles.
100% of products inventoried (no drop ship).
Zappos is a service company that happens to sell shoes, clothing, handbags, eyewear, watches (and eventually a bunch of other stuff).

Customer service value proposition in action…
Zappos is committed to WOWing each and every customer.
Customers come…
12.0M total purchasing customers (3.5% of US population)
4.0M have purchased in the last 12 months
Customers come back…
On any given day, about 75% of purchases from returning customers
Repeat customers order >2.5x in the next 12 months
Customers come back, order more and order more often…
Repeat customers have higher average order size
$111.98 – first time customers
$143.22 – returning customer

Power of Repeat Customers & Word of Mouth

3 foundational things we’ve learned are necessary for good service online:

1 - Customer Service: What Customers First See
24/7 1-800 number on every page
Free shipping
Free return shipping
365-day return policy

2 - Customer Service: What Customers Experience
Fast, Accurate Fulfillment
Most customers are “surprise”-upgraded to overnight shipping
Create WOW
Friendly, helpful “above and beyond” customer service
Occasionally direct customers to competitors’ web sites

3 - Customer Service: What We Do Internally
No call times
No sales-based performance goals for customer service reps
Run warehouse 24/7
Inventory all product (no drop-ship)
5 weeks of culture, core values, customer service, and warehouse training for everyone in Las Vegas
Culture book
Interviews and performance reviews are 50% based on core values and culture fit

2 Bonus things we’ve learned….

1 – Give your customers a voice on your site
Customer Reviews
Provide useful information
Help lower return rates
Wonderful SEO Value!
Credibility!
Feedback Mechanism (VoC)
Better user experience
Build empathy
SEO Value
Builds community/repeat visits

2 – Enable Product Sharing
“ free” link backs
High converting trigger
Community engagement is high!
Creates referrals that lead to customer acquisition

Though, Times are Changing!

Customer experience extends beyond just your site!

Time to figure out how to extend the experience!

Why? Because not all customers pick up the phone!

Create more touch points with your customers… … and you enable more frequent and meaningful engagement with them (Brand longevity!)

Why? Because people want to be heard!

Why? To gather information?!

Why? To make better educated purchases?!

Why? To feel like they are part of it?

Why? To talk about their experiences!

Why? Probably all of the above, and more! That’s LOTS of people willing to help look out for your business, provide feedback and ideas, etc!

That is, if you are listening.

Most people don’t pick up the phone and call us!

Evolving Customer Connections Phone Live Chat Social Sites, Networks, etc… 1,100,000+ opportunities to interact per day 6,000+ calls a day 400+ live chats per day

That’s right, 1,100,000 per day in the social space And growing!!!

Or you can annualize it:401,500,000+ invitations to interact per year

How does a company engage in an organized predictive way?

Which leads me to…

Is People Planning the new media planning?

Don’t plan great media, plan great people! Have the RIGHT people, have the RIGHT voice

People Planning Train EVERYONE to be a customer service agent Good Customer Service = 

People Planning Rally the company behind the IDEA of pro-actively talking to customers

People Planning Employees will want to engage customers, as often as possible.

Zappos Goal: Have as many employees be a voice! Why? We believe in People Planning being at the heart of our success.

How does one do that? Have the right culture and nurture it Have committable core values and aspire to live them INVEST in hiring and firing and pay people to leave ($$$) Stay focused and make people focused investments Education!

Strategy: Maintain Transparency Make it easy for people to see that we are, just a company of people just like you! We have nothing to hide, we’ll show you what people are saying about us and what WE are saying We like to make people smile and laugh

Transparency Tools – twitter.zappos.com

Get your partners involved!

Transparency Tools – Zappos.TV

Transparency Tools – Facebook Page

What does a Snuggie have to do with Zappos? Absolutely nothing, but it has everything to do with an engagement opportunity!

The reshaping of customer expectations

Reshaping customer expectations

Thank you for allowing me to be here!
Email me – bkalma@zappos.com for:
A copy of this presentation
Answers to any additional questions not answered today
A copy of our culture book
Tour of our offices when you’re in Vegas
Job opportunities
Follow Me on Twitter!
http://twitter.com/krianbalma

Legal and Financial Disclaimer
P.S. You might be wondering why we need to have a legal and financial disclaimer in this presentation, but you are still reading, so our lawyers, auditors and accountants would really like to make sure we make the following clarifications.
Although an audit was underway and almost done, the financial information presented in this slide show was unaudited. We made every effort to present the best information we had at the time.
Gross merchandise sales is a non-GAAP metric. We use it to express the total demand across all of our web sites and stores. This number measures the dollar value of the orders placed in the year before accruing for certain items such as returns, and it ignores certain timing cut-offs that are required by GAAP for revenue recognition purposes. If we were a public company, we would have to reconcile gross merchandise sales to the nearest GAAP metric (net sales), but we are currently a private company so the gross merchandise sales number should be viewed just as an interesting number that we want to share with our friends.
This presentation contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they ever materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by the forward-looking statements and assumptions. These risks and uncertainties include, but are not limited to, the risk of economic slowdown, the risk of over or underbuying, the risk of consumers not shopping online or at our web site at the rate we expected, the risk of supplier shortages, the risk of new or growing competition, the risk of a natural or some other type of disaster affecting our fulfillment operations or web servers, and the risk of the world generally coming to an end. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including statements of expectation or belief; and any statement of assumptions underlying any of the foregoing. Zappos.com assumes no obligation and does not intend to update these forward-looking statements.
Congratulations on making it through all the fine print. If you enjoy fine print, look for openings on our legal and finance team at jobs.zappos.com .

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Extending the Customer Experience

by Brian Kalma on Mar 03, 2009

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Extending the Customer Experience — Presentation Transcript