Zappos, founded in 1999, is an online shoe, apparel and electronics retailer, specializing foremost in customer service. In 2008, Zappos reached $1billion in annual sales, the following year Zappos was acquired by Amazon in a deal valued over $1.2 billion (Hsieh, 2010). Despite the qualms from consumers about the effect the acquisition would have on the intimacy of Zappos’ customer service, it is still Zappos’ customer service model and attention to relationship management that sets Zappos aside from its competitors today.
2.0 Zappos’ Value proposition:
2.1 Target Market
Zappos’ primary target market is online shoppers in the United States of America, in ...view middle of the document...
58). This policy provides customers the opportunity to return items they are not happy with and either exchange the product for another or receive a full refund, ensuring that customers have a positive shopping experience with Zappos, and thus will most likely use Zappos to shop online in the future. Providing such customer service reduces the time, effort and psychotic risks often associated with online shopping, thus generating value for customers.
It is therefore evident that Zappos’ value proposition from the customer’s perspective is selling and delivering happiness through excellent, reliable service. This is aligned with the company’s number one value, to ‘deliver WOW through service’ (Zappos, 2014).
Furthermore, relationship management is crucial to the success of Zappos, as it is a key differentiating factor from their competitors. Zappos has gained a reputation for providing exceptional customer service as it consistently provides value and a positive shopping experience for customers, specifically through the provision of tangible and intangible benefits and their efforts of reducing the costs associated with online shopping.
Despite Zappos’ usually excellent, reliable customer service, in 2012, Zappos was the victim of an online hacking scandal where hackers gained access to 24 million customer’s personal accounts, with intruders accessing customer’s names, email addresses, phone numbers, home numbers and the last four digits on their credit cards (Greenberg, 2012). Such an incident unavoidably would have impacted negatively on the reputation of the brand as well as the trust Zappos had built with their customers over the previous decade.
3.0 Zappos’ Value Delivery System
Figure 2. The Value Delivery Sequence (McLeod, 2014, lecture 1: pg. 39)
3.1 Alignment with the Value Proposition
Zappos’ value delivery system is aligned with their value proposition. As stated on their website, the company has aligned the entire organization around one mission: ‘to provide the best customer service possible’ (zappos.com). According to Tony Hsieh, ‘[Zappos’] number one priority is company culture’, stating that ‘[if] you get the culture right, most of the other stuff like delivering great customer service [and] building a long-term enduring brand will just happen naturally on its own’ (Bulygo, 2013)
Culture is critical to marketing because ‘all company departments have an impact on the value delivered to customers’ (Kotler, 2010, pg.31). Zappos’ organizational culture, which can be defined by their 10 core values listed on their website, has been critical in delivering and communicating their excellent, reliable service bot internally and externally. In relation to...