Delighting customers should not be the first priority in building customer loyalty.I’ve never encountered a business owner or leader who said, “I wish fewer of my customers were raving fans.” We all want to maximize that special group of high-value customers who not only support our business through steady repeat purchases, but also eagerly refer new customers to us. While a great deal is known about the factors that drive customers away from a business, the attributes that lead to customer evangelism are the subject of considerable debate. That exact debate played out very clearly in two vastly different articles in a single issue of the Harvard Business Review. The titles of the two articles were “Stop Trying to Delight Your Customers” and “How I Did It: Zappos’ CEO on Going to Extremes for Customers.”
The authors of “Stop Trying to Delight Your Customers,” Matthew Dixon, Karen Freeman, and Nicholas Toman, reported, “Conventional wisdom holds that to increase loyalty, companies must ‘delight’ customers by exceeding service expectations. A large-scale study of contact-center and self-service interactions, however, finds that what customers really want (but rarely get) is just a satisfactory solution to their service issue.” “How I Did It: Zappos’ CEO on Going to Extremes for Customers,” written by Zappos CEO Tony Hsieh, suggested that service excellence requires dedicated commitment to such Zappos service values as “deliver wow through service.”
So when it comes to customer loyalty, which is it—to wow or not to wow? The answer is actually simple. It’s both!
Consistent with Tony Hsieh’s perspective, “wow” is an important dimension of customer loyalty and should be pursued. The first step in that pursuit is achieved by making sure you are simply “getting it right” (delivering exactly what customers want the first time you serve them) and “making it easy” (reducing the overall effort required for customers to get their needs met). Once accurate and easy service delivery occurs consistently, customers can be “wowed” if the business exceeds their expectations and/or offers personalized care. The importance of accurate and easy service delivery is well demonstrated by Dixon, Freeman, and Toman’s research, which, in a nutshell, shows the following:
Delighting customers should not be the first priority in building customer loyalty.
Reducing your customers’ effort to get their problems solved is the low-hanging fruit in the loyalty journey.
Acting to reduce your customers’ effort can actually reduce your service costs.
Given the importance of effortless customer service and the Zappos commitment to delivering wow through service, let’s examine what Zappos does to increase customer ease.
Overall, 95 percent of all Zappos sales happen on the company’s website! Thus, despite the emphasis placed on handling customer calls, most customers connect with Zappos through the Internet. For a brand that is known for personal service, it is striking that so much of the “service experience” has to be translated through the company’s website.
The online service world in which Zappos thrives is itself an outgrowth of making life easier for the customer. Remember Nick Swinmurn walking around San Francisco looking for his size 11 Tan Airwalk Chukka boots? Zappos was created so that consumers could, at their convenience, search from an available inventory of 5 million or more items. That inventory eclipses what customers could find by going down to their local brick-and-mortar stores. Better yet, consumers do not need to conform their shopping to a store’s hours; there are no transportation costs or parking challenges, and customers don’t need to check their hair or make themselves otherwise more presentable before they shop.
Rafael Mojica, senior user experience architect at Zappos, explained how he and other members of the user experience team view their jobs. “It is an obsession to make our website—and ultimately all Zappos touch points—more user-friendly. We spend the bulk of our time focused on our website’s ease of navigation. Although our customers are very satisfied with our navigation, we will never be content. We want to think through everything that the customers might want and how they can get their needs met with the least effort. The design and development process is not as intuitive as you might think because it’s not simply about providing information. Too much information can be overwhelming. Our goal is to provide what customers need exactly when they need it.” At the heart of all well-designed customer experiences is a dedicated commitment to understanding the customer’s wants and desires. With that understanding, processes are crafted to ensure that the customers get what they want, when they want it, with the least effort possible.
Rafael goes on to add, “Zappos often has to track and execute against customer needs, even when some of those needs pose sizable logistic or technical challenges. We have to nail every part of the customer journey, from the moment a customer gets to the website to the moment when that customer finishes the order. Every aspect must be a pleasant experience.” Rafael’s comments highlight the concentrated effort that excellent service providers expend. Namely, they map out the entire customer journey and seek to meet and anticipate customers’ needs flawlessly at every significant contact point.
In designing and improving the user experience, the Zappos user experience (UX) team relies on a combination of active listening, user research, intuition, and trial-and-error approaches. Specifically, the team utilizes quantitative and qualitative analysts as well as designers and quality improvement experts, all of whom are working to infer what customers want. Collectively, this expertise is deployed to examine the user’s on-site behavior at both a macro and a granular level. The team members also talk with and listen to customers’ input for desired changes and for the viability of new features or redesigns.
From the standpoint of direct listening, Zappos has a link prominently displayed on its landing page that asks, “HOW DO YOU LIKE OUR WEBSITE? We’d like to get your feedback.” That link enables users to complete an online survey in which they are able to compare the Zappos website to others, give an overall assessment of their experience, and specifically provide ratings on a scale of 1 to 7 concerning things like overall ease of website use, ability to find products, the effort needed to use a gift card, or the ease of checkout. Qualitative questions ask customers to provide “suggestions or ideas to improve the Zappos website” and say that, if “you had difficulties using the website today, please feel free to share your experience.”
Lianna Shen of the UX team notes that the feedback provided by users has proved very helpful in reducing the effort that other customers have to exert throughout the experience. She notes, “The best ideas come from customers. They help us see things we would have never seen. We might have thought we had the shopping experience well mapped out until a customer writes, ‘Hey, what if you did this?’ or ‘If you organized your category this way, it would make more sense for me to shop it.’ In the end, it’s our job to ensure that the site makes sense and works easily for users.” As with most surveys of this type, only a small percentage of users take the time to offer suggestions. A customer’s purpose for being on the site is principally to have a positive shopping experience, not to help design the website. So to gain more comprehensive information on what customers want, UX team members have to collect data based on visitor use patterns.
Zappos Web analyst Christina Kim notes, “If you are our customer, I’m watching you. Actually, I am watching you only as part of aggregate data collected from everything that is happening on the site. From a trend perspective, we are attempting to understand what is and isn’t working across the site. I use tools to look at how many people cumulatively visit the site and how the traffic generally moves from page to page. If we introduce a new graphic design image to help users get from one place to the next, I’ll be measuring data on all the clicks around the image and working with the visual design team and maybe even copywriters to ensure that we are doing the best we can to help customers easily get where they want to go. It’s like making sure that signage in a building is actually helping customers get to their destinations.”
On a less macro and more detailed level, individual UX team members look at the actual site visits of selected unidentified guests. That analysis examines such things as where those visitors spend their time. It gets to questions like, what is the user’s specific page-to-page journey? Which pages didn’t seem to interest the customer? By combining aggregate and individualized analyses, designers can identify programming glitches or confusing language that leads to “shopping cart abandonment”—situations in which people place items in their shopping cart, but leave the site without purchasing that merchandise. Once breakdowns are identified, the UX team designers fix them so other shoppers don’t encounter them and so shoppers who do not complete their transactions can receive cart recovery e-mails.
In addition to inferring customer wants and needs based on the users’ behavior, Zappos involves customers in the specifics of the website design through a process of user testing. Rafael Mojica notes, “We incorporate what we learn from analytic data into the way we design a new feature or redesign an old one. We then show our customers the new product, ask them to use the feature, track data on their use, and ask them to give us their feedback about it.” Rafael adds, “The users’ participation, our tracking software, and a willingness to listen help us understand when the customers can’t find what they are looking for, or that they don’t know what’s happening when they are on a given page. In essence, it allows us to adjust our design completely around our users’ needs.”
Certainly online customer tracking tools are extremely sophisticated. For example, they allow user experience experts to literally see the cursor movement of visitors as those visitors navigate through a website, thus allowing access to valuable information on customer behavior patterns. While user experience tools are particularly refined, every business in both the online and the brick-and-mortar world should strive to understand where customers encounter resistance when they are trying to get their stated and unstated needs met.
As the Zappos user experience team demonstrates, aggregate and individualized data paint a picture of the customer journey from which quality improvement inferences can be drawn. Improvements based on those inferences must then be measured through additional customer research and assessed through active listening to customer reactions.
The difference between good and great service begins with watching customers’ behavior—not to be intrusive, but to be helpful. From that observation, improvements can be attempted in areas where customers are struggling to get their needs met. Additionally, customer observation ensures that the attempted improvements have the desired effects on the overall customer experience.
The word service not only implies that someone else is going to put out effort on your behalf, but also suggests that an individual or business will help you make a product selection that meets your needs. Much as when they are buying from a printed catalog, Zappos customers face the challenge of choosing an item without the benefit of being able to touch it or try it on. To compensate for this significant disadvantage, Zappos has been a leader in online product presentation.
Fred Mossler, “just Fred” at Zappos, notes, “At the time we got started, people who sold footwear online were scanning images directly out of a paper catalog. The pictures were usually really grainy, and the sellers would scan in only one color. The catalog would say that the product was also available in other colors. So the customer had to guess what kind of ‘red’ the shoe would be. It made the shopping experience really difficult for the customer. At Zappos, we knew from the very start that we wanted to make shopping pleasant, so we made a commitment to show the customers what they were going to receive by taking our own pictures of every product in every single color from multiple angles. We started with three or four photo angles, and we are now up to eight angles plus video. In the beginning, it was very expensive to do it this way, but we felt it was the best and the only viable option.”
Zappos has since set standards for written and pictorial Web-based product presentation and in the process has improved the quality and efficiency with which content is generated. From a visual perspective, Dan Campbell, Zappos photo supervisor, explains that Zappos needs to shoot a lot of images quickly, while also making sure that the images accurately assist the website user in making the best possible purchase. To that end, Dan notes, “When the first-of-its-kind item comes into the Fulfillment Centers, every size and color of that item is diverted directly to us. The product comes to us via conveyors, and then the prep team takes the item for the photo shoot. Once the item is shot, we immediately upload our images. Our quality control team looks at the images and makes sure that each image matches the description. The photographs are then sent to our imaging team, which cleans them up, crops them, resizes them, and gets them ready to go onto the Web. On average, there are at least 800 images taken per photographer per day. Let’s say that, on average, we have 20 photographers working; that means we are shooting around 16,000 images daily. Those images help our customers to richly experience our products and make their choices in well-informed ways.” Sixteen thousand images a day is the tangible and substantial manifestation of a commitment to give customers an abundant source of pictorial data to guide their purchases.
There definitely can be significant initial costs and logistical challenges involved in helping customers make better-informed choices, but, over time, improved efficiency typically drives down expense and generates great customer service benefits. When considering what it takes to help customers make knowledgeable decisions, leaders should think about offering guidance as a long-term investment. The more you assist your customers in getting what they want, the more those customers will turn to you as a trusted advisor for future products and services. As technology costs recede with time and as you improve your efficiencies, those initial investments often reap substantial returns.
As Zappos demonstrates, service excellence is a complex matter of disciplined investment, a commitment to customer ease, and attentiveness to all aspects of the customer journey. It also requires a willingness to remove the barriers that create customer resistance and a desire to earn customers’ trust by guiding them to solutions and products that meet their needs.
To fully appreciate the playful nature of the Zappos culture, the Zappos website has had a “Do Not Click Here” link. By going to www.zappified.com/click or pointing your mobile phone QR reader at the box given here, you will find out what might have happened if you dared click.
At its most fundamental level, customer satisfaction is a measure of whether your business is perceived as being competent at delivering in a way that meets the customers’ expectations. While customers’ expectations will vary depending on what is normal for your industry and what you specifically promise through your marketing efforts, customers universally become dissatisfied when their expectations are not met. At Zappos, customers typically expect they are ordering a product that (1) is accurately described and depicted on the website, (2) has a price at checkout that matches the price listed for the product, (3) will be delivered within the time frame promised, (4) when opened, will match what was ordered, and (5) will meet the customers’ intended use.
ZAPPIFIED BRAIN BREAK
Please identify the nurse depicted here:
If you guessed Dr. Meredith Grey from Grey’s Anatomy or Major Margaret “Hot Lips” Houlihan from M*A*S*H, you were close. Tony Hsieh’s debut as a nurse—at least it is thought that it was his debut—occurred in a video describing Zappos benefits that is presented to all employees. When Tony and then CFO Alfred Lin were asked if they would participate in the video by dressing up as nurses, they both agreed without even asking about the video’s purpose. If you want your team to “embrace and drive change,” “be adventurous, creative, and open-minded,” and “create fun and a little weirdness”; it doesn’t get much better than this. Would your CEO do the same? If you are the CEO, you might think about expanding your wardrobe for the next companywide meeting. Zappos has ample items in inventory to meet your needs.
To deliver on all five of these expectations, Zappos creates many checks and rechecks, so let’s look at a couple of these key areas of quality assurance. Specifically, we will explore how Zappos makes sure customers see accurate product descriptions on the website, receive what they ordered, and ultimately get products that work for them.
Have you ever noticed how ads for weight-loss products often depict “before” and “after” results using photos that not only demonstrate the weight-loss power of the advertised product but also show the transformation of a depressed, sweatsuit-wearing couch potato into a well-dressed, enlivened fashion model? The camera angles and posture of the so-called actual customer also go a long way to enhance the visual significance of the product’s effectiveness. Better yet, how many of us own a product that looked so good on the infomercial that we couldn’t resist buying it, only to discover that we wouldn’t wish ownership on our worst enemy? Thanks to this type of advertising hype, customers have become skeptical about the authenticity of product representations.
When customers place an order on the Zappos website, they expect that what they see is what they’ll get. Thus, to deliver on this customer expectation, Zappos makes a herculean effort to cut the hype and accurately inform the consumer of the precise details of the product. We learned earlier in the chapter how product quality teams make sure the photos of the Zappos products meet image and presentation standards and how they also check that those pictures match the item descriptions prior to the pictures’ being placed on the website. Those two processes, however, are only part of an extensive set of quality reviews that begin with copywriters verifying product specifications prior to writing narrative descriptions and include such things as painstaking effort to depict the color of the item accurately on the website. Christina Mulholland, Zappos senior image coordinator, notes, “We do everything in our power to capture the true color of a product. We constantly calibrate the monitors that we view our pictures on to make sure our screens represent true color. We physically compare the actual item to the color of the image on our screens. When people call the Zappos Customer Loyalty Team for a return, the CLT members code the reason for the return. When products are returned because of a wrong color, we will grab the product from our inventory, bring it to our desk, and reevaluate the color match.” To meet customer expectations, Zappos focuses on product presentation accuracy at every turn.
In addition to the reliability of product descriptions and depictions, customers expect that the item in their Zappos box will be the one they ordered. Fortunately or unfortunately for Zappos, errant service delivery has become a huge source of pain for many consumers today. It’s fortunate in the sense that customers have come to expect so little when it comes to order fulfillment and unfortunate given that past bad experiences with online fulfillment have left some customers wanting to physically place the items they want in real shopping carts.
In the drive-through restaurant sector, for example, the greatest factor in achieving customer satisfaction (considerably more significant than product quality) is order accuracy. Despite the significance of this customer expectation, MAX International, a company that provides solutions for recording customer transactions, reports that drive-through orders are wrong 10 to 15 percent of the time. Given that 70 percent of restaurant visits are processed through the drive-through lane, MAX International calculates industrywide losses from inaccurate orders and customer dissatisfaction as amounting to more than $8 billion. That’s a lot of missing french fries!
By comparison to a drive-through restaurant order, imagine the challenge Zappos faces in order fulfillment accuracy. Let’s assume you click the “submit my order” button on the Zappos website: What must happen for that product to arrive at your door (often the next day)? That click initiates a cascade of redundant processes and inventory management strategies involving the Zappos Fulfillment Centers in Shepherdsville, Kentucky. The Shepherdsville complex consists of two warehouses with a total of more than 1 million square feet of space. The facility contains roughly 5 million items and would hold approximately 744 average U.S. homes or 17 football fields.
Each day, vendor trucks deliver items to the Fulfillment Centers’ inbound loading docks, and tens of thousands of items are processed into those buildings. Your item has to make it from the vendor truck to a location in the Fulfillment Centers where, through a combination of human and automated “pickers,” it can be quickly selected (along with approximately 65,000 other items on any given day). Your item then needs to make it from the picker to the packaging area. Finally, it needs to be placed in your box with your correct address label affixed and then be processed out of the building to the local UPS distribution center. Voilà, it’s at your door. That makes getting the french fries in the bag seem a much easier task, doesn’t it?
Zappos innovations in inventory management offer great insights into the lengths to which service businesses must go to get the order right and not let the customer down. If you were to visit the storage racks at Zappos, you would see what looks like a cluttered closet. Items are not stored in tidy matching boxes. For example, you will not find all the size 7, medium width, chestnut Ugg kids’ classic boots next to the same boot in a wider width. In fact, you will not even see all the size 7, medium width, chestnut Ugg kids’ classic boots in the same storage space or even in the same aisle. Instead, you will see a mishmash of products and brands, all sharing shelf space. This “disorganized organization” results from Zappos leadership’s decision that every product entering the warehouse must be given its own unique “license plate number” (LPN). In essence, Zappos can have 20 exactly identical items, but each will have its own LPN. Once the LPN is generated and placed on the item, the item is placed in the next available spot in the warehouse, and a central computer tracks the item’s LPN and its location.
When you click that “submit my order” button, the computer looks for an LPN associated with the product you are purchasing. Pickers located strategically throughout the warehouse are instructed via handheld scanners as to which nearby rack holds your item. These individuals find your product, scan the LPN to verify it with the computer, visually inspect your item, and place it on an easily accessible conveyor. Craig Adkins, vice president of Zappos Fulfillment Operations, explains more about the accuracy checks that take place from picking to shipping: “We don’t tell our people to pick a Nike, Adidas, or Reebok; we tell them to pick LPN 7705. This makes it a lot easier and more accurate to pick the item. It’s not based on the criteria of size, width, color, fabric, or brand. All they’re looking for is 7705. When they pick 7705, the box also has a bar code on it, and they have a scanner in their hands, so they scan that item. The scanner will tell the picker whether he has picked the correct target. That information plus a visual inspection of the product represents a first-level accuracy check. When our picker puts the item on the conveyor, it goes downstream through a number of additional scan points to make sure that this is the correct selection. When the item gets put into a shipping container to go to a customer, the product is scanned once again to verify that it is in fact part of the customer’s order. Once that is verified, a shipping label is printed along with the order ID. The item is scanned yet again to make sure it matches what is supposed to be put in the shipping box and matches the packing slip.” Check, recheck, and check again at every step of the way. When customer expectations and order fulfillment really matter, brands like Zappos leave little to chance.
Despite all the meticulousness about the accurate depiction of items on the Zappos website, the creation of innovative product license plates, and repeated product checks, the customer might open the Zappos box and determine that the item ordered just doesn’t work for him. Through no fault of Zappos, customers may have purchased items that don’t look as good on them as they had hoped or don’t fit as well as they had expected. Zappos does everything to get the right product to their customers, but sometimes the product fails to meet a customer’s expectation. Now what?
This “moment of truth” is probably the clearest differentiator between minor-league and major-league service brands. In fact, many service brands take a “you chose it, we delivered it, and now it’s going to be difficult to return it” approach. By contrast, Zappos stands behind a return policy written in plain English:
FREE Shipping:
Unlike many other websites that have special rules and lots of fine print, Zappos.com offers free shipping on all domestic orders placed on our website, with no minimum order sizes or special exceptions.
Just because shipping is free doesn’t mean it should take a long time. Zappos.com understands that getting your items quickly is important to you, so we make every effort to process your order quickly. When you order from our website, you can expect to receive your order within 4-5 business days.
If you are not 100% satisfied with your purchase, you can return your order to the warehouse for a full refund. We believe that in order to have the best possible online shopping experience, our customers should not have to pay for domestic return shipping. So if for whatever reason you’re not happy with your purchase, just go through our easy self-service return process to print out a free return label—your domestic shipping costs are prepaid.
With Zappos Retail, Inc.’s 365-day return policy, there are no special catches or exceptions. All we ask is that you send the items back to us in the original packaging and make sure that the merchandise is in the same condition.
Free returns for 365 days go a long way to making sure the business “gets it right” for its customers and ultimately that customers “get what is exactly right for them.” When the customers know that they will get what they want, that the company will help them make the best choice, and that the entire process will be as effortless as possible, they often feel “wowed.” That “wow” experience is reflected in exemplary customer reviews about operational excellence at Zappos found on social media sites that essentially say things like:
Zappos.com is a fantastic place to buy shoes online. Historically, when it comes to buying a pair of shoes I would only go to a store so I could make sure they fit. … But, Zappos makes it so easy to return the shoes that I have changed my shoe shopping behavior. If my shoes don’t fit, I just pack ’em back up and Zappos pays the postage.
Zappos you rock!! I ordered over $600 worth of shoes just to determine which ones would be perfect for my wedding. I loved that shipping was free, and that they arrived the next day. In the comfort of my home and without time pressure, I tried all the shoes on, picked my favorite, and returned the rest with your free returns! It could not have been easier!
Let’s face it; we live in a world of crappy customer service. By contrast, Zappos is a ray of sunshine. It’s time corporate America takes note of Zappos great business model. I buy merchandise there all the time. I love their selection and… returns are a breeze.
Or, regularly on Twitter.com where, with brevity, customers offer comments like:
The Zappos shopping experience is frighteningly easy.
The tireless focus of Zappos leadership toward getting it right and making it easy serves as the foundation for delivering wow through service. In the next chapter, we will examine how Zappos focuses on velocity, builds staff members’ passion as well as their product and service knowledge, manages breakdowns, and does little things to exceed customers’ expectations. Then, we will look at how those actions work together to create customers who are unwaveringly loyal!
Chapter 4 Ideas to Run With
Reducing customer effort increases customer loyalty.
It is difficult to wow customers unless you execute on the basics of service.
Service implies that a service provider will make a customer’s life easier.
Customer ease does not just happen. It has to be designed into the customer experience.
In order to meet the wants, needs, and desires of your customers, you should invest in qualitative and quantitative approaches that help you understand customer preferences.
Customer surveys are helpful but limited when it comes to collecting the “voice of the customer.” Aggregate and granular customer behavior data fuel informed inferences about customer preferences. Those inferences need to be checked by making further observations and by asking customers for their feedback.
In order to deliver customer satisfaction, you must study and execute on your service promises.
The process of delivering to your customers’ expectations often involves considerable expense, process innovation, and redundancy in delivery systems.
When you help customers get their needs met easily and assist them to buy what they want, and you deliver those items reliably, customers not only are satisfied but are often wowed and loyal!