Zappos is an internet shoe store that is known around the world for its service. One of their connections with customers is that they actively promote that they give free overnight shipping of orders and also free return shipping.
Recently, Zappos decided to stop advertising that every customer would get free overnight shipping of their orders; opting instead to surprise as many customers as they could with upgraded overnight shipping. They still give everyone free shipping; just not overnight in all cases.
Some have taken Zappos to task for that. But I actually praise them for their decision and explanation. Zappos says that they made the decision to not advertise or promise it, because they found that customers were happier when they were surprised by the upgrade. They acknowledge that they would probably get more customers if they continued to market free overnight shipping as opposed to surprising customers with it, but they want to be known as a customer service company, not a marketing company.
THAT’S a company that knows how to distinguish themselves with customers–all the way down to their (umm) soles. (Pun intended)
Overcomming expactations. The way to satisfy needs, yeap! Thxs for the case, needed it right now.
Dusan is right here…. surpassing expectations: How often does that happen?
I admit that I’m a Zappos fan. Their customer service is what sets them apart. This includes overnight shipping and free shipping, but extends to folks on the phone who actually are friendly and happy when a customer calls. How ODD is that?!
“Zappos says that they made the decision to not advertise or promise it, because they found that customers were happier when they were surprised by the upgrade.”
I’m sure that cutting shipping costs had nothing to do with it…
Dusan and Ann,
It is interesting how little it takes for us to be ‘wowed’ these days, isn’t it? Zappos’ frontline people are that great because they are screened first for a culture fit before even being considered for their phone skills. Zappos would much rather hire someone who has passion…they’ll train for the skills. Then, once a phone person is brought in, they actually go through a bit of a “decompression” process to rid them of all of the habits that were enforced at tradiitonal call center operations. It’s a pretty magical place. Reminds me alot of how we were at Lands’ End when I was there.
David,
Zappos is one of the great companies out there that operates from what I call “pure intent.” They make their business decisions based on what is right for the customer. They actually spend more to reliably deliver an experience that they feel proud of delvering.
Did you know, for instance, that they made the much more expensive decision to move all of their inventory in-house, so they could control the customer experience and the timing of those overnight shipments? They were drop-shipping from manufacturers with great success…but that was not good enough for them.
Zappos makes these investments because it’s the right thing to do. You can actually suspend normal cynicism when evaluating the reasons for their decisions.
Hi Jeanne ….
Thanks for the response.
I know about their reputation, and I understand the impact that a well executed under promise / over deliver can have on customer service. I’d really like to believe that this move was all for the customer experience, but my background in fulfillment and shipping leads me to believe otherwise.
The fact is, overnight shipping is 3 to 4 times more expensive than ground. And, as fuel costs have increased – carriers haven’t been shy about passing the difference on to the shipper.
That leads me to believe that Zappos probably determined that they could save a lot of money by defaulting to a ground service. By “surprising” X amount of customers they get to keep the customer service reputation that they’ve worked hard to build. I don’t doubt that they very carefully considered the customer impact of the decision …. but I’m still not convinced that it wasn’t bottom line driven.
BTW …. I wonder how to they decide who to upgrade. They announcement was kind of vague. I’m curious as to what percentage will ultimately get overnight shipping. 25%? 50%? 75%?
Hi David! In terms of the percentage of orders that we are actually shipping overnight vs. before, it is the same… The only difference is that we are choosing to surprise our customers instead of promising it. Hope this helps!
Tony Hsieh – CEO – Zappos.com
Tony,
Thanks so much for jumping in here! Great answer! The intent and motivation of your decision to choose the memory of surprise is just one of the many things that keeps Zappos beloved by its customers.
Jeanne
Tony dropping by actually inspired a post of my own, which you can read here:
http://marketersynergy.wordpress.com/2008/03/26/corporate-rock-stars-speak/
I also have to say, I agree with the strategy to surprise people. Would you rather hear you’re getting a PS3 for Christmas, or would you rather think there’s no way your parents would buy you a PS3 and then all of a sudden you’re unwrapping one on Christmas morning?
From a Washington Post article about the eternal quest for human happiness:
http://www.washingtonpost.com/wp-dyn/content/article/2008/01/06/AR2008010601522.html?referrer=emailarticle
Rule 2. Happiness often comes from what you don’t know.
People generally dislike uncertainty and often go out of their way to reduce uncertainty. But in a series of experiments published in the Journal of Personality and Social Psychology in 2005, Gilbert and his colleagues showed that people who received gifts for no apparent reason felt happier than those who received identical gifts for reasons that were clear. Participants also reported more pleasure when they got a compliment without knowing who said it than when they knew who it was.
“When we have uncertainty about the nature or cause or meaning of any event, it amplifies the emotional consequences of that event,” Gilbert said in an interview. “When you don’t understand why a bad thing happened, it is worse. When you don’t understand why a good thing happened, it’s better.”
While uncertainty about negative and dangerous things is unpleasant, the psychologists argued that we foolishly seek to apply the same principle to things that we know are positive. How might someone apply this idea to their lives? If you know a romantic comedy has a happy ending, Gilbert wrote in one paper, consider walking out of the theater before the movie ends.
Patricia, thanks for your great thought on the surprise-factor, and for sending that article through. You really hit on something important that companies just don’t do enough thinking about to wire into their experience. Even in our personal lives, we’d like a bit more of this. I’d much rather have something nice done for me “just because” than almost any other time.
When I was at Lands’ End, we actively surprised customers with what we called “touches.” A box that went out with kids clothes had the flaps printed with the head and tail of a cow, a sheep or a horse so the kid could ride the box all over the house. Wool sweaters came with cedar blocks so you could “let your sweater rest through the summer without being chewed on by moths.” A debate went on at times with the numnber crunchers who proposed that we merely offered these items for customers to call and ask for. We’d lose the magic in the moment of the surprise…and fortunately for us, we had a culture that knew that was part of what we were delivering. We thought of ourselves as memory-creators, not just delivering great turtlenecks and sweaters. And the human connection in that element of surprise played a huge role in connecting with people on a human level — a big thing that spurred on our growth in the early years.
Circling back to Zappos, which started this conversation, they actually do have a culture that allows them to be creative in their thinking and how they extend the “touches” The fact that companies are so quarterly-inclined just does not give people the breathing space to try these breakthrough ideas…but I’d propose that these things are what will break through and create those memories people will talk about. And the pull of those memories will take them back to those companies again and again.
A slightly delayed response…
Tony – You of all people would know what’s going on. That piece of information changes everything. I stand corrected. Thanks for stopping by.
Jeanne -That will teach me to argue with a Marketing Prof. : )
Well I believe it could possibly be a double-edged sword. After purchasing from Zappos recently and NOT receiving my shoes overnight I went back to the website hoping to get answers. I have to admit I didn’t even notice that the “free overnight shipping” had been changed to “free shipping” and frankly, I stopped using Zappos when I figured it out. The fact that Zappos did not advertise the change made it seem a slight-of-hand trick garnered to hide the increase of shipping cost related to gas prices. The reason I frequently used Zappos was 1) free overnight shipping
2) good prices considering the free overnight shipping
3) free returns (which is the same)
I do have to say, however, that I recently made a purchase through a competitor’s website which had the same product for 30% less than Zappos. They also do not have free overnight shipping but at least their prices reflect the shipping speed.
Erin – I completely agree with you.
I buy ALL of my 6 year old son’s shoes and T-ball cleats from Zappos since they are the only place to really get extra wide Stride Rite shoes. Since he is growing and is very active, I’ve bought at least 6 to 10 pairs a year since he was 2. At $63 a pair, I consider myself a loyal costomer.
That being said, I found myself VERY disappointed when I ordered 2 new pairs for my son last week and it took 6 days for them to arrive. I’m not sure that I will continue to pay higher prices to have slow shipping. I can get the same slow free shipping from the actual shoe company website and save a few bucks on the shoes.