The Value of Good Customer Service? $807 Million (if you’re Zappos, that is…)

As a fledgling journalist more than a decade ago (has it really been that long?) I started covering a few companies in this crazy new concept called e-commerce. There were a lot of failures, and only a few success stories. And even at the time, Amazon.com seemed like a long shot bet – with a serious burn rate at the time.

Over the years, we’ve seen that Amazon is a workable model, and have seen even more losers, and a few winners in the e-commerce space.

The winning formula, it seems, is almost too simple – provide great customer experiences – and you’ll win. Zappos.com was a small company based on providing items you could get at a lot of other places (both online and in regular stores) but quickly and usually for a little less. The return policies favored the customer, and items were usually highly available. Simple, yet a highly effective model.

So I must say I wasn’t surprised when I saw that Zappos was acquired by Amazon for nearly a billion dollars.

Amazon is smart to even further expand its offerings, and really locks into a community and culture of Zappos users that are highly loyal and repeat shoppers.

The key here is for Amazon to continue this culture of exceptional customer service that users expect when they purchase from Zappos. The company has worked hard to earn that trust from its buyers, and it can all too easily be broken.

E-commerce models have created a number of easy ways for retailers to differentiate themselves. But I do believe the most successful e-tailers will not win on price alone. Zappos has proven that – to a very large payoff.

One thought on “The Value of Good Customer Service? $807 Million (if you’re Zappos, that is…)

  1. It’ll be interesting to see what happens to Endless.com as that was the site that Amazon built to seemingly compete with Zappos a few years back.

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