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Building 5-Star Customer Service Skills In Your Organization

What You Can Learn From Zappos – The Reigning Champ Of CX



Matt Wujciak
06/08/2020

zappos

Efficiency will always be the backbone of customer service. And better technology will always be the backbone of customer service efficiency. “Most retailers are trying to get customers in store, we were trying to get them out more efficiently,” Carl Smit, former VP of Retail at Under Armour, Verizon, and Apple once told me. 

In many ways, customer experience is predicated on transactions - the quicker they are, the happier the customer, the more profitable the business. 

However, that doesn’t mean we can afford to overlook the human connection in these efficient transactions, especially if efficiency isn’t the primary goal for some customers. In fact, in many cases, the human connection trumps efficiency. (Most of us remember the famous Zappos customer service call that lasted 11 hours, a case study that became one of Zappos’ most marketable depictions of the brand’s dedication to their customers). 

While I don’t encourage an average handle time of 11 hours (or any handle time), the reality is personal connection has never been more imperative in customer service than it is today, and you’ll see why.

Uncovering trends - beyond the numbers

According to our most recent CCW Digital Market Study: New Standards For Customer Contact Performance, we asked respondents: Which of the following actions are you taking/have you taken to handle the recent outbreak? 1 out of 2 respondents cited increased focus on human factors (like empathy) during interactions and training (50%) - while roughly 4 out of 5 are NOT asking customers to refrain from contacting their business with non-urgent requests (78.95%). And there’s a reason for that. 

While consumer behavior trends such as call volume fluctuates, and efficiency remains a struggle for most contact centers, psychological factors like human connection and empathy must now be a top priority in your customer service strategy as well. 

As customers navigate a changing world, they will have different preferences, expectations and emotions. (Hopefully your customers’ emotions aren’t as unstable as your call volume). Regardless of those specific changes and quirks, one thing will remain constant: customers’ desire for increasingly customized and empathetic support.

Interestingly, the technology used to operationalize efficient customer service processes is the same technology used for aggregating insightful personal B2C interactions (i.e. knowing that the customer in your CRM system calling right now has called 3 times in a row regarding the same request). How is your agent going to adjust their tone or empathy levels to accommodate this particular customer? 

Read More: Special Report Series: The State Of The Voice Channel (Sponsored By Salesforce)

Other popular responses include increasing use of collaboration tools (66%), leveraging digital channels (53%), and increasing proactive engagement (53%). 

Proactive engagement and successful digital self-service offerings will not, however, completely eliminate interaction volume. Customers will have unusual questions and requests that are too complex for many digital environments. They may also want to speak to a live agent during these difficult times. Mindful of this reality, half of companies are preparing their employees to provide more “human” conversations with customers. Whether over the phone or in a chat window, these empathetic agents will ease short-term worries and build long-term retention, as Zappos is doing right now.

Once able to focus merely on the efficiency piece, like automated self-service, IVR and chatbots, many of the most successful customer service businesses are reminded of the additional importance of human connection in the heat of the moment, whether you have the resources to predict those inquiries or not. 

Knowing this, it shouldn’t surprise you that customer service teams might require an agent to react to customer inquiries even when there is no useful history of what the particular customer is calling about today. This not only emphasizes the need for emotional and personal dialogue but the ability to additionally create a path of learning (and solving) those new, unusual problems that may reoccur. In fact, some brands are welcoming those unusual problems.   

Delivering a Zappos customer experience

“Our hope is that 20 years from now, people won’t even realize we started by selling shoes online,” Zappos CEO Tony Hsieh said in a keynote at our live event series, Customer Contact Week Vegas.

Although shoes are the core physical product offering for the Amazon-owned online retailer, Zappos has recently encouraged customers to call the company's service line to discuss many things beyond footwear, whether that's a homework assignment, research question or myriad other subjects — no purchase necessary.

Read More: How-to Guide: How to Improve Your Customer Experience ROI with Better Conversational AI

"Stuck in the middle of a project? Looking for services that are open in your town? Need someone to help you with research? We're here to lend an ear and help you make your next step forward," the company says on its website.

"We noticed there were callers who had concerns and were wanting to talk. We started to see evidence of not just us feeling what was happening in the world, but also that callers wanted to talk about it," Brian Kalma, Zappos employee and entrepreneur told CBS MoneyWatch. Shoe sales may not be booming, but that doesn’t mean the phone’s not ringing, especially when you’re opening the doors (or channels) beyond shoe inquiries. 

If Zappos can provide consumers value in a myriad of other ways, guess which retailer has the advantage of customer relationships (and data) when a consumer does want to purchase a specific style of footwear.

The company's customer service reps are becoming increasingly well-equipped to speak with callers about their concerns. "We hired empathetic people, and that allowed us to repurpose our well-trained staff to help people beyond purchasing shoes," Kalma said. 

The concept is a way of giving back while also helping the company gain insight into what customers and non-customers alike want right now. 

"It allows us to uncover new truths and understand what problems people really have and potentially systematize a solution to recurring call problems," Kalma said. 

Read More: Identifying New Customer Demands And B2C Communication Trends

It has also helped Zappos keep its employees busy and avoid furloughs as the number of product-related calls to its traditional hotline dropped. In turn, they’re able to provide long-term value for the brand in periods of low sales, with the goal of focusing on future brand image, consumer value, and of course, customer loyalty. One thing it's not, however: a formal counseling service. Employees are trained to direct callers with mental health and other medical concerns to the appropriate resources. 

Questions typically fall into one of three categories: help finding hard-to-find or sold-out items, what's open nearby and how to locate medical facilities. Specific queries include questions about where to find groceries and which local restaurants are open. Single parents quarantined alone with their children also have dialed in just to converse with other adults. 

In all, roughly 400 workers have fielded more than 3,000 non product-related calls, according to Zappos. One unexpected outcome: other companies are reaching out to Zappos seeking advice on how to run their customer service departments. This is why:

If Zappos can turn say 25 percent of 4,000 non-product inquiries into a shoe sale down the road for an average of 100 dollars per shoe, that’s $100,000 in revenue. If they can extend the customer lifetime value (CLV) of that 25 percent to one shoe purchase a year for 25 years on average (whether they’re buying shoes for themselves or someone else), that becomes $2,500,000 of incoming CLV-generated revenue.   

For this reason, Kalma stated the program will continue indefinitely – creating a never ending window of leads (not 3,000 or 4,000), all generated by non-traditional consumer value. "There is certainly no end date. The world is changing quickly, and we need to change just as quickly to deal with the uncertainty everyone is feeling."

What does it look like?

With plunging retail sales, businesses are trying new ways to retain customers.

As seen in the New York Times, “To hear someone on the West Coast commiserate with me and talk about their plans and what they wanted to do after the quarantine — it felt very connecting,” Ms. Wang, a New Yorker recently said.

Sure, we take orders and process returns, but we’re also great listeners,” Zappos said in a statement on its website. “Searching for flour to try that homemade bread recipe? We’re happy to call around and find grocery stores stocked with what you need.” Why? Because it’s not just about helping a potential customer find a grocery store. It’s about solving a problem and building loyalty. 

Kalma said the company’s use of Holacracy, a self-management system in which there are no managers and employees define their own jobs, had helped to create an environment where the idea could come to life.

Mr. Kalma said Zappos, which was acquired by Amazon in 2009 but runs independently, was considering adding to its 400-person customer service team to keep the new service line running longer.

“We’re seeing signals that this is something we may want to maintain as the world reopens,” he said. Even before the new service line officially started, Zappos had said its customer service representatives were available just to chat. 

Looking towards the future of customer experience

Yes, AI, automation, and self-service will and should continue to surge to maximize efficiency and gain valuable customer insights. 

As millions of U.S. citizens continue to file for unemployment benefits each week, more customer-centric businesses attempt to cut costs, sometimes at the expense of customer-facing employees. Zappos took a different approach by hiring more customer service agents to accommodate the “non-urgent” customer inquiries that 1 out of 5 are asking customers not to bother with. 

Today’s customers turn to automated IVR systems and chatbots to solve simple inquiries. However, they turn to live employees for complex ones. As seen in the Zappos case, they’re also turning to humans for things like “just wanting to talk to a person,” as strange as they may seem. But when you think about the lack of human interaction today, it’s not as strange as it might have seemed at the beginning of the year. Customers are demanding more, and brands that are able to satisfy their needs tend to win long-term consumer loyalty and customer lifetime value. 

Read More: 4 Trends That Will Boost Your Customer Experience After The Pandemic

In fact, brands like Zappos, Chick-fil-A, Disney, Apple and many more public Fortune 500s and private establishments alike, pride themselves in delivering that human style connection to customer service. As digital marketing guru, Forbes contributor, and bestselling author, Dan Gingiss told me, “Remarkable CX can be your biggest Marketing differentiator,” and Zappos agrees.

No one’s safe from the behavioral economic consequences brought upon by the coronavirus. But adapting to the right CX strategies and consumer behavior trends will give you the best chance at being on the favorable side of financial Darwinism. 

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For media coverage, lead gen, and digital marketing inquiries, contact me at matt.wujciak@customermanagementpractice.com.

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