Few companies have made as much of a splash for emphasizing customer service as Zappos has. The on-line shoe retailer is well-known for its generous returns policies, easy access to service reps etc. Much of this originates in a number of unique practices that reflect the company’s core values. To give an idea of how this plays out, potential hires take a mandatory office tour (Happy Feet – Inside the online shoe utopia, The New Yorker, Sep 14, 2009):
She told me later that job candidates taking the tour are closely observed; those who are brusque to the Help Desk personnel, for example, are weeded out immediately. All new hires sign a document verifying that they’ve read and understood the Core Values, then undergo a hundred and sixty hours of customer-loyalty training. At various points in the process, they are offered two thousand dollars in cash to quit.
To put that two grand in perspective, Zappos pays $11 per hour for its basic call center jobs. One would have to work for over 180 hours to make that much before taxes.
So what to make of all this? Can run of the mill businesses learn from a crazy dot com? Apparently some believe so. Zappos is now offering management programs (Zappos Retails Its Culture, BusinessWeek, Dec 30):
Zappos already knows how to sell shoes. Now it’s hoping to profit from people’s fascination with its friendly, antics-filled business model. Last summer, the company began holding two-day, $4,000 seminars on how to recreate the essence of its corporate culture. At the third such session, last October, the 25 attendees included an executive from the Girl Scouts, some competing e-tailers, and an entrepreneur from Scotland—a market Zappos doesn’t even serve. In coming weeks the company will also relaunch Zappos Insights, a Web site offering management videos and tips from staffers at a cost of $39.95 a month.
Zappos has certainly done some creative things and engendered loyalty among both customers and employees. I also accept that these things matter; happy long-term employees are generally more productive and can create value for both the firm and customers. But does every firm need to be Zappos? How much zaniness do customers want at a bank branch?
An interesting issue is how well over-the-top customer service scales. Zappos has all of its customer support personnel in suburban Las Vegas. Given that it is web-based, it can continue to grow and still have a unified feel to the firm (assuming Jeff Bezos and company stay out of the way) because they will likely never grow beyond Vegas. But what about service firms that have to operate across many locations? How easy is it to have a standard feel when employees are scattered across tens — if not hundreds — of locations each with its own management team?
Another point is that Zappos customers don’t really interfere with each other. Part of the Zappos mystique are stories of multi-hour phone calls and winning customers over with small discounts and perks. But each of these is an isolated conversation. I, as a customer, am unaware that another customer has monopolized a salesperson for three hours or that the person at the next register has just been given for free what I am paying for. It is not clear how well the Zappos model translates to a face-to-face setting.
UPDATE: For more on how Zappos runs its call centers, check out this story on NPR’s Morning Edition: Mr. Bossman: What’s My Motivation, Money? (Jan 6, 2010)