Amazon/Zappos - The benefits of a loyal customer base

Putting the customer first is a ethos that every company tries to promote, but Zappos goes above and beyond the call of duty.

While many firms offer free shipping and a 24 hour helpline, it is a rare thing to find a retailer that sends flowers to the funeral of a customer's husband. However, this is exactly what happened atZappos.

Installing a love of work in their employees, Zappos has seen many of their customer reps (or Zapponians) go beyond what would normally be expected of them. When a recently widowed woman called the shoe company to see if she could return a pair of shoes that she had ordered for her late husband, the rep not only refunded her but sent her flowers.

It is this kind of service that is responsible for the word of mouth advertising Zappos receives. Speaking to Meettheboss.tv, company CEO Tony Hseih revealed that 75 percent of sales are from repeat customers and that due to the service they receive, these customers become promoters in their own right.

"We've grown from basically no sales in 1999 to a little over US$1 billion in gross merchandise sales in 2009. The number one driver of that is repeat customers and word of mouth - promoters have become an extremely important thing for us."

Due to the amount of customer praise the company receives, Zappos spends much less on advertising than would be expected. It is because of this that they can afford to inject so much cash into customer experience resources such as their 365-return policy and 24-hour 1-800 helpline. Such things aren't cheap, butHsieh believes they see the benefits in sales.

"Any costs that we've put into investing in the customer experience ends up driving that repeat customer behaviour and word of mouth so it is very much an indirect marketing cost."

No wonder the firm sends out a weekly newsletter to its employees, filled with positive feedback from its customers....

Read the Breaking News on MeettheBoss.com: Amazon buys Zappos 

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