Amazon bought Zappos for 1.2 billion in 2009. Not too shabby for a company who started selling nothing else but shoes. It is also specifically amazing to know that Zappos managed to increase their market value without doing any kind of advertising or marketing. When Tony Shieh started Zappos in 2000, he decided on one thing. He will pour all his resources to customer service instead of marketing. He believed that satisfied customers will be their marketing and sales agents.
Shieh stuck to his idea. In fact, he set up a 24/7 customer service hotline, unlike other online shops who simply display their products. Outside of this, Shie abolished the usual call duration limit of his agents. He encouraged agents to make sure their customers are satisfied even if it means referring them to their competitor’s site. The longest call ever recorded was 5 hours.
They also have a 365-day return policy. Surprisingly, only 3 percent of their customer base returns their order.
Zappos’ strategy paid off. They have 80 percent customer retention and it is their customers that ended up recruiting new customers for them.
Zappos is not the only company that uses customer service as their primary marketing tool. Here are several more.
L.L. Bean & Co.
I have been a loyal Zappos customer and very rarely look to other online shops when I want to buy something online. In fact, I prefer to buy from Zappos than from a physical store. I was forced to buy from L.L. Bean & Co. only after Zappos referred to me to it. I desperately needed something they didn’t have.
I was convinced to finally purchase something from them when I learned that they have a lifetime warranty. I didn’t expect for it to be true. Somewhere there, I was expecting for some fine print somewhere. Besides, the boots I purchased from them was so fine, I didn’t really want to return it… until I worked it so hard, it started looking like Zodzilla’s playground.
When you are desperate to get something, miraculous things happen like remembering something that happened three years ago. I remembered L.L. Bean & Co. and the New Yorker had a lifetime warranty. It’s time for me to cash in. I called them and something wonderful happened, someone answered. The informed me that they cannot replace my boots because they don’t manufacture them anymore. They offered to give me a full refund but I wanted my boots.
I went for the next best thing. I asked them if they could replace it with something as close to it as possible. She asked me to visit their store so I could take my pick. I told her what I wanted and after three days, it was at my doorsteps.
And so, here I am. Loyal to Zappos and L.L. Bean & Co.
Several years ago, there was a story on Reddit that spread like wildfire. It was about Trader Joe’s, a local grocery store.
Apparently, there was one woman who was desperately looking for a restaurant that would deliver food to his father that is alone in the house. He is sick and if he misses a meal, consequence could be fatal. The problem is that it was snowing. No one could deliver.
Until she called Trader Joe’s. it was out of desperation. The problem is that they also do not deliver especially in that kind of weather. HOWEVER, this is a special case. She told the person on the other end of the line what her father needed. The Trader Joe’s staff even suggested what would be perfect for him.
After they settled what they will deliver, the staff on the other end said she doesn’t need to pay. It’s free of charge. It was their Christmas gift to her and her father. As promised, food got to her father in less than 30 minutes.
It sparked other customers to share their own Trader Joe’s experience. One of them recounted a story about how Trader Joe’s gave him his grocery for free after learning he has been laid off work. The staff told him to just pay it forward when he gets a new job.
Technology companies are not usually known for great customer service. Google started the “self-service” trend. It’s irritating for people like me who are not that techie. I end up losing thousands of hair before I am able to solve a problem.
One of those times happened when I couldn’t, for the life of me, figure out how to transfer my hosting from godaddy (who messed up my site) to another host. I went through more than ten different web hosting sites and all of them didn’t ACTUALLY offer warm body customer assistance. My last gentle knock of persistence was Prestige Technologies, they had a customer hotline on their site. I called knowing that if I can’t get this fixed, I will have to hire someone and spend more just to get my site out of GoDaddy.
Miraculously, someone actually answered their 800 number. I told the guy that I want my site out of GoDaddy and if he can do it for me right there and then, I will pay for 1 year of hosting.
He started asking for some information and asked me if I want to hang up because it will take a while. I didn’t. I told him I’ll stay on the line until everything is done. After about two hours, he was able to move everything from GoDaddy to them. I started processing my payment until he told me I don’t have to pay yet. He is giving me free 6 months hosting. If I like their service, then I could pay after six months.
I still host all of my sites with them.
Nordstrom’s customer service is beyond legendary. They allow returns even without a receipt and even after years of purchase. When they opened their new store, a man walked in returning a tire. Apparently, he bought the tire from the a tire shop that used to occupy that place.
Nordstrom doesn’t sell tires but they decided to humor themselves, honor their word and make light of the situation. They accepted the tire and refunded him his money.
I had doubts whether the story is true or not but apparently, it is true and Nordstrom spokesman Colin Johnson swore to its authenticity.
From Zappos to Nordstrom, the one common thing is their respect towards the lifeblood of their company, their customers. At an age where it is so easy to revert to technology to get things done, they prove that nothing beats personal customer service.
Small businesses and start-ups could learn a lot from them. Instead of spending money on marketing, start putting your effort on the core of your business. Marketing will follow.