The Customer Service Survey

Surprising the Customer

by Peter Leppik on Wed, 2008-02-20 01:00
Via Consumerist, here's a fascinating story about the intersection of customer service and marketing from Zappos, an online shoe company trying to be known for its top-notch service.

Back in the good old days of 2007, Zappos had a policy of free overnight shipping for all orders. Recently they changed this to free 4-5 day shipping, and a $25 charge for overnight delivery.

But behind the scenes, what changed? Nothing. Most orders (including the ones with free shipping) continue to be sent out overnight for next day delivery.

Apparently they did some market research and discovered that it was more powerful to provide unexpected free overnight delivery than to advertise the same level of service. So by switching to an extra charge for next day shipping, Zappos wins in three ways:

1) Customers come away from the experience "wowed" with the quality of service.

2) Zappos gains some extra shipping flexibility in case of a surge in orders, snowstorm, or other disruptive event.

3) Zappos gains extra revenue from those people willing to pay for guaranteed overnight shipping.

This is the kind of winning service formula I like. In a world where indifferent service is the norm, Zappos has decided to differentiate itself by surprising just about every customer by providing better service than expected. Judging from the comments on Consumerist, they've earned a lot of loyalty as a result.

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