How Zappos Lesson Does Customer Service Metrics


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Shoe and apparel seller Zappos is renowned worldwide for exemplifying exceptional customer service. The company’s founder and CEO Tony c wrote a book, Delivering Happiness, that was listed on The New York Times Best Sellers list for 27 consecutive weeks.

“Zappos invests in the call center not as cost, but the opportunity to market,” Joseph Michelli told me. He also wrote a book about the company’s model called The Zappos Experience. Oddly, few companies heed their example.

Two of the most popular Key Performance Indicators – time-to-resolution and call times – counter Zappos entire customer service model. These metrics are meant to drive productivity, but they wrongly assume the customer just wants to be rushed through the process as quickly as possible.

Instead, Zappos has developed their own set of metrics that influence performance and outcomes. Here’s a breakdown of what they measure, why, and how you can use these in your business.

Measure Total Call Time, Not Time Per Call

“It’s more important that we make an emotional connection with the customer, rather than just quickly getting them off the phone,” Derek Carder, customer loyalty operations manager for the Zappos, told me.

Instead of valuing quick time to resolution or processing high call volumes, Zappos looks at the percentage of a time an agent spends on the phone. This metric–personal service level–is a way to “empower the team to utilize their time how they see best promotes customer loyalty,” Carder says.

The agent is expected to spend at least 80 percent of their time in customer-facing interactions. It doesn’t matter if that’s one call, or 100. Reps who achieve this target get to spin “the wheel of happiness” to win gift cards and other rewards. Those who fall below the 80 percent line receive coaching.

Quantify and Reward Wow Moments

Zappos utilizes relatively little advertising or traditional marketing. They rely and succeed almost exclusively on word of mouth and customer loyalty.

“Customer service creates an environment of one-to-one communication. That intimacy creates a special opportunity to build a relationship as opposed to a top of mind impression through advertising,” Michelli said.

They do this by measuring four factors on a 100-point scale called the “Happiness Experience Form:” Did the agent try twice to make a personal emotional connection (PEC)? Did they keep the rapport going after the customer responded to their attempt? Did they address unstated needs? Did they provide a “wow experience?”

At the end of the month, management identifies agents with less than a 50-point average on the Happiness Experience Form. Those agents receive extra training. Top performers are rewarded with paid hours off and other incentives.

Mine for Idle Chats

Similar to talk time, Zappos doesn’t value time to resolution or quantity of interactions when it comes to chat. The agent is expected to create a PEC and follow the same guidelines as a phone conversation. Zappos also monitors “abandonment time,” or periods when an agent has a session open even though the customer already disconnected from the chat.

When agents have an idle chat window they can’t respond to a new exchange. Carder said this could be a symptom of “chat avoidance,” which is comparable to an agent not picking up a call so it rolls over to another responder. Zappos measures the abandonment rate in 30-minute increments. If the team experienced a high ratio of idle chats to active session, this would trigger management to coach agents on duty during that time.

This strategy zeroes in on the cause of unproductivity in the chat setting–idle chats. When agents aren’t productive, customers wait longer. And the longer they wait, the more apt they are to abandon the session.

Reward Perfect Attendance and Punctuality

Zappos combats absenteeism with a program they call Panda. Employees receive a point for every day they miss work or come in late. Staff with zero points in a given period receive a varying number of paid hours off. These hours can be accrued and stacked for an entire paid day off, Carder explains.

“We’ve seen a huge return on investment in terms of absentees and numbers on deck,” Carder says. Employees can still use their sick and vacation days without affecting their Panda score.

Do you think their performance metrics would work for your business? Comment here and join the conversation. Research for this article was provided by Software Advice

Ashley Furness
Ashley Furness is a technology analyst for research firm Software Advice. She has spent the last six years reporting and writing business news and strategy features. Her work has appeared in myriad publications including Inc., Upstart Business Journal, the Austin Business Journal and the North Bay Business Journal. Before joining Software Advice in 2012, she worked in sales management and advertising.


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