Ho hum. Yes. I’m going to write about Zappos again. But wait! Before you click away. You gotta hear this. I’m telling you. I can’t make this stuff up!
My colleague conveyed this experience.
She ordered a pair of rain boots from Zappos recently. And, with all she’d heard about Zappos’ legendary service, after nine days, she was a bit miffed as to why her boots had not arrived at her home. So, she sent them an email. Nothing nasty. Just “hey Zapppos. 9 days and no boots. What gives?”
Soon after, she received an email from PayPal saying that her money was being refunded by Zappos. Well, ok. That was all well and good. But, she actually still wanted the boots. And she thought this meant that Zappos was cancelling her order and issuing a refund.
Following that email, though, she received a note from Zappos saying “…So sorry for the inconvenince. We refunded your $149. Your boots are on the way. Keep them.” Or something to that affect.
Seriously!?!
And so, how did Zappos make the determination to issue a refund and still ship the product? Was it based on some sophisticated CLTV model? Maybe. But, I doubt it. Since this is the first time my colleague had ever ordered from Zappos. Unless of course you can tell that much about someone from the fact that they would pay $149 for rain boots.
Could it be some algorithm that predicts future purchases from such a refund policy? Perhaps.
I’m thinking its more likely that someone, not Tony Hsieh, but someone on the front lines in customer service decided it was the right thing to do; was empowered and just did it.
The lesson here? White glove customer service for everyone, at any cost is not sustainable business…if you combine that with other decisions that erode financial margins. But, when was the last time you saw the word “SALE” flashing on Zappos home page? When was the last time Apple ran a 50% discount offer on iMacs?
So, when folks talk about consumers willingness to pay extra for exceptional service, I’d argue that all that they are willing to pay is fair value for the service and experience delivered. Zappos delivers exceptional service. And for that, they make no appologies about selling a pair of rain boots for $149.
