Wednesday, July 27, 2011

The Zappos Way of Customer Service

Customer Service Isn’t Just A Department” – Tony Hseih, CEO, Zappos

When you decide to make customer service your competitive advantage, you are making a huge commitment to your customer. This commitment would not come to fruition unless there is a concerted drive to build this into the company’s culture. And no company has quite perfected that art like Zappos.

Las Vegas-based Zappos started in 1999 by selling shoes online, and has since grown to a US$1 billion per year retailer. It has expanded into clothing, handbags, sunglasses, and numerous other categories. The company early on decided to focus its marketing budget towards delivering exceptional customer service. To enable this, they have manufactured from the bottom up a very open culture in the organization. From allowing vendors to view what products are in stock along with prices and profit margins to allowing other companies to have a look at the way they run their Contact Center operations, Zappos has built a very strong image in the minds of the industry of what they are trying to achieve. Even internally, their Contact Center agents are not given scripts and are not bound by rules which force them to complete calls quickly (the record being 4 hours for a single call). Zappos sees their greatest brand building opportunity in speaking with their customers. They encourage trial of their products with a guarantee that it can be returned even a year after purchasing it, thus building a very strong chain of trust with the customer. This and many more such initiatives place Zappos on a whole new pedestal in the minds of the customer.

Taking this sort of positioning in the market can be a very daunting task. But Zappos have made this belief in customer service all pervasive across the company. This can truly be achieved when the initiative begins from the top. Tony Hseih has always believed in living and breathing the values set by Zappos. Many companies have similar values stated in the reams of company literature they print every year, but delivering on them sometimes needs motivation and a directive right from the top.

If you are looking to implement customer service the Zappos way, a very conscious effort is required. It may well need a complete overhaul of processes, people, culture and most importantly - a healthy dose of top management directive.

This is what we think, what do you think?

Wednesday, July 20, 2011

The Outsourcing Conundrum

Outsourcing has become an intricate part of various business processes. In service industry, there has been a pronounced shift in the direction of after-sales support outsourcing. Today, manufacturers, suppliers and retailers believe that outsourcing after-sales service helps them slash overhead costs, streamline service management, and sharpen their focus on competencies which are core to them. (

But is your brand ready to withstand the possible downfalls of such a move?

The moment a company outsources its support services to a third party, it immediately brings into its fold a group of people who may not necessarily understand the brand promise. The brand promise is crafted by a company after a deep understanding of the customer. The customer in turn expects this promise to be delivered across every touch point with the same consistency. This becomes the inherent challenge of outsourcing customer service.

When a company outsources their after sales service needs they are also outsourcing the brand. An outsourcing partner may not always make keeping up the brand promise its priority. With cost savings being one of the selling points, the outsourcing partner may allow the client’s brand promise fade into the background. Therefore, if a company centers its entire marketing and sales pitch to the consumer on a brand promise, outsourcing that very commitment can prove fatal to the brand.

This is what we think, what do you think?

Friday, July 15, 2011

The Service Failure Advantage

How is it possible that customers are more loyal after failures of products or services than they have been before? Excellent service recovery is the key and with the right activities, companies can fully utilize the service recovery paradox. ( )

The service recovery paradox states that with a highly effective service recovery, a service or product failure offers a chance to achieve higher satisfaction ratings from customers than if the failure had never happened. A little bit less academically, this means that a good recovery can turn angry and frustrated customers into loyal customers. In fact it can create even more goodwill than if things had gone smoothly in the first place.

But before reaping the often unknown benefits of a service recovery paradox, developing that all important service recovery process becomes imperative. Companies cannot be expected to deliver exemplary service at every touch point and with every interaction. Therein lays the inherent need for a service recovery program. Addressing the chinks in your service delivery mechanism becomes the start for designing a recovery program. Even though such a program will differ from company to company, there are some underlying strategies which always need a visit:

1. Anticipate the need for recovery

Every company has to first accept that their product can quite easily fall prey to a problem of some nature. Figuring out what these problems are, listing them down and putting in place practices to tackle them is the next step. This need to anticipate problems is core to a service delivery culture in an organization.

2. Build an organization that is fast in decision making, and fast to respond.

Your organization needs to be built to withstand the pressures of a service recovery program. It needs to be able to deliver it consistently and fast. To do this, roles must be set and responsibilities determined to enable quick responses. Processes need to be defined so that there is no confusion about any situation. Consequently, escalations of any kind can be handled swiftly.

3. Empower front line employees

Your front line employees are the ones who generally bear the brunt of consumer frustrations, but, they also have the least power to affect change most of the time. Giving these employees greater power to exercise their discretion within limits is a sure shot way of delivering good service and in case of a failure, service recovery. A Call Center agent who can authorize a refund incase of a service failure without unnecessary escalations can go a long way in pleasing a customer.

Every company would love to believe that their customer is in a perfect state of bliss with their product, but that cannot be a constant reality. On the other hand unbridled loyalty can be achieved by just attending to a service failure and solving the problem. This should be enough encouragement for any organization today to build a service recovery program.

So what do you think are the other factors companies should look into for building a service recovery program ?

Tuesday, July 12, 2011

The Thick End Of Customer Loyalty.

“Relationships customers form with brands are stronger when they're built on ‘thick value’, on spontaneous relationships, more than on ‘thin value’ and transactions” (‘Is big brand customer service getting worse’ –

A clear thought emanating from this line is that customer service is becoming purely driven by transactions (thin value) and not relationships (thick value). After empowering the consumer with your product, the next phase is to continue gauging her needs and orienting customer service to drive loyalty towards your product. But companies today and especially big brands have decided to orient customer service by just enabling the customer with the most basic of services which include completing simple transactions and answering basic queries.

Big brands are the greatest culprits at creating transactional relationships and not being able to transition to providing customers with ‘thick value’. At the point of interaction with a customer which invariably is the Contact Center, a company is driven by cost efficiency and ends up frustrating customers further. Even at touch points such as service centers, a host of procedures and waiting time weakens the will of the customer. A surface level investigation into customer service objectives will always reflect a need to make life easier for the customer. But as a customer, when was the last time you felt that way? Are big brands lounging in their market leader positions and ignoring the fact that true customer service is driven through relationships?

The answer to the above is an overwhelming YES! One will have to really search their mind to remember the last time a big brand placed emphasis on the customer’s needs and made that the priority. Companies have begun to make huge outlays of money on making a customer service promise and building that ‘thick value’ in terms of resources but the results are debatable. Customers still feel let down and jumping brands have become the norm.

Companies need to find ways to reach out to customers, build real relationships, understand needs and deliver on those lofty customer service promises. But companies continue giving the customer a cold shoulder and concentrating on building ‘thin value’ by fulfilling service requests and never walking the extra ‘customer service mile’.

Changing the conversation from ‘we can solve your problem’ to ‘we know your problem’ is the genesis to creating ‘thick value’. Big brands can surely afford to enter such territory but seem shy of doing so. They need to be able to commit themselves to this cause and understand the value of such a move. Letting a customer know that they will be taken care of at any touch point can be a start. Training employees to understand the value of being proactive, in the long run, can be priceless. And finally, building ‘thick value’ as a result of this into your brand promise can easily make the brand unbreakable in the minds of the consumer.

Any such initiative now will enable differentiation in a market where customers have come to expect sub standard service quality. In today’s highly competitive market, the core product has pretty much become a commodity. Therefore, companies have countless customer service opportunities lined up at their doorstep and they should use them before the customer walks out their door.

So, do you think companies comprehend the importance of building ‘thick value’?