Name: Marian Puerin Program & Year: BSBA-FM 2

Instructor: Ms. Danica Louise Duyan Subject: Mngt 3

Analyzing Zappos' Customer Service Philosophy

I. Executive Summary

Zappos is an online shoe and clothing retailer that operates in the United States. The company
has received attention from its customer service approach, that can be summarized as: "Deliver
WOW through service." Zappos has set a high standard of customer satisfaction with free two-
way shipping, free returns, and a 365-day return policy. By implementing these policies Zappos
aims to build a long-term relationship with its customers that goes beyond traditional
transactional relationships. Customers who have a positive experience with Zappos are more
likely to become repeat customers and recommend the brand to friends and family.

Zappos is a company that has revolutionized online retailing with its focus on customer
satisfaction. The case study examines how Zappos built a culture of customer service that has
enabled it to become one of the most successful online retailers. The focus of this paper is going
to be on the analysis and evaluation of the strategic alternatives that can be used to address the
problems identified in the case study. The company's profile was also examined to provide
context and understand how its history has influenced its unique approach to customer service.

II. Problem Statement

 The general problem identified in the case study is the lack of a customer-centered
culture in most companies. This results in poor customer service, which ultimately leads
to customer dissatisfaction and loss of business.

 The specific problems highlighted in the case study include poor employee engagement,
difficulty managing growth, and addressing the issue of providing high-quality customer
service while keeping costs low. This paper aims to identify strategic alternatives that can
help Zappos address these problems while keeping customer satisfaction a top priority.

III. Objectives of the Study

The general objective of this study is to formulate strategic alternatives that can enable Zappos to
address its problems while keeping customer satisfaction a top priority. Specific objectives
include identifying alternative ways to improve employee engagement, managing growth, and
offering high-quality customer service while keeping costs low. By achieving these objectives,
Zappos can continue to build a strong brand reputation and foster long-term relationships with its
customers.

IV. Situational Analysis

The situational analysis will involve a SWOT matrix highlighting the company's strengths,
weaknesses, opportunities, and threats. By looking at these internal and external factors, we can
identify strategic options that can be used to address the problems highlighted in the case study.
The SWOT matrix will be divided into four sections: strengths-opportunities, weaknesses-
opportunities, strengths-threats, and weaknesses-threats. By using a SWOT analysis, we can
create actionable strategies that build on the company's strengths and opportunities while
mitigating potential risks and weaknesses.

The SWOT matrix will be divided into four sections: For each quadrant, we will identify
strategic options that can be used to address the problems highlighted in the case study.

Strengths-Opportunities Weaknesses-Opportunities

We will identify offensive and proactive actions We will identify defensive and proactive
that Zappos can take to leverage its strengths actions that can help Zappos overcome its
and capitalize on external opportunities. weaknesses while taking advantage of external
opportunities.

Strengths-Threats Weaknesses-Threats

We will identify offensive and reactive actions We will identify defensive and reactive actions
that Zappos can take to use its strengths to that Zappos can take to mitigate its weaknesses
avoid potential threats. and minimize the impact of potential threats.

By using this matrix, we can create actionable strategies that build on the company's strengths
and opportunities while mitigating potential risks and weaknesses.
 V. Strategic Alternatives

To address the problems highlighted in the case study, we have developed three strategic
alternatives that aim to improve employee engagement, manage growth, and offer high-quality
customer service while keeping costs low.

Three Strategic Alternatives

1. The first strategic alternative involves enhancing employee engagement through

training programs that focus on leadership development and promoting a positive
workplace culture.

 enhancing employee engagement, is suitable as it aligns with the objective of

improving employee engagement.

2. The second alternative involves diversifying the product offerings to appeal to new
customer segments and expand the customer base.

 diversifying product offerings, aligns with the objective of managing growth, as it

will help to expand the customer base and improve revenue streams.

3. The third strategic alternative involves optimizing delivery and fulfillment to improve
speed and quality while also reducing costs.

 optimizing delivery and fulfillment, is suitable as it aligns with the objective of

providing high-quality customer service while keeping costs low. Combined,
these alternatives can help Zappos address its problems while maintaining its
commitment to customer satisfaction and service excellence.

By implementing these strategic alternatives, Zappos can address its problems while
maintaining its commitment to customer satisfaction and service excellence. The proposed
strategic alternatives have been evaluated to determine their suitability in addressing the
established objectives.

VI. Analysis and Conclusion

In conclusion, the case study shows the importance of customer service in achieving business
success. Zappos has been successful in building a thriving retail operation by focusing on
customer satisfaction as a top priority. By implementing the strategic alternatives proposed in
this paper, Zappos can continue to prioritize customer satisfaction while addressing its problems
and positioning itself for future growth. The lessons learned from Zappos' approach to customer
service can be helpful for other organizations looking to build a customer-centered culture and
achieve success in a competitive marketplace.

VII. Recommendation to Management

Our recommendation to Zappos management is to implement all three strategic alternatives

discussed above. This comprehensive approach will allow the company to address its problems
holistically and maintain its commitment to providing high-quality customer service. The first
strategic alternative will improve employee engagement, resulting in increased productivity and
better customer interactions. The second strategic alternative will diversify the product offerings,
resulting in expanded revenue streams and an increased customer base. The third strategic
alternative will optimize delivery and fulfillment, resulting in faster delivery times and improved
customer satisfaction. In combination, these alternatives will position Zappos for long-term
success and help the company maintain its reputation for exceptional customer service.

VIII. Sources:

Gaviser Leslie, S., & Aaker, J. (2010). Zappos: Happiness in. Retrieved from Stanford Graduate
School of Business website: https://www.gsb.stanford.edu/faculty-research/case-studies/zappos-
happiness