com Focus on Customer Service

Became Market Leader in online shoe retailing. Launched discount website . Ventured into Accessories & Apparel.Background Founded in 1999. Gave top most priority to Customer Service.

WE will discuss!!! Customer Service initiatives Was it good to offer Customer service at extra cost ?? Customer Service ± Integral part of Culture 5 Force Analysis TOWS Analysis Pitfalls for excessive reliance on media .

ZAPPOS ! ± ³Delivering happiness´ .

helpful ³Above and beyond´ customer service Occasionally direct customers to competitors websites Best Selection ‡ Over 1100 Brands ‡ Over 15000 styles to choose from ‡ Photographed in multiple angles .Zappos is committed to WOWing each and every customer Zappos is powered by service ‡ ‡ ‡ ‡ ‡ Allows the customer to return the shoes if they were not satisfied. Free shipping service. Create wow ! Friendly.Zappos took it as a long term investment rather than expense. Most customers are surprised upgraded at overnight shipping.

. Narrow the convincing gap Toll free service-24x7 Zappos HQ was moved from San Francisco to LA for Csut Service improvement Used media and Social networking sites to reach out customers. of people buying from stores. Reduced convenience Gap.Customer Service ± A Competitive Edge Free shipping & generous return policy 365-days return policy Overnight shipping HR Activity Lowest price Some times Advice to competitors Large selection of Brands style.

Service ± Built Culture Culture ± part of hiring process Extensive recruitment criteria Aggressive Training criteria Practice exercise to improve communication and trust at work place Raised Employee morale Ten core value of Customer Focuss imbibed .Cust.

Disadvantages ± Customer service Free shipping was major drain on revenue. Customer are reluctant to pay a premium only for customer services. An expensive way of hiring & firing .

Was it good to offer Customer service at extra cost ?? FACTS: 75% of customers were brand loyal Heavily relied on mouth to mouth publicity Market leader in the US Best companies to work in 24/7 hour customer enquiries .

Have a process of Customer Retailer Customer Have an effective SCM to control costs !!! TO 1) 2) 3) .Was it good to offer Customer service at extra cost ?? Breaks even after 7 years Drop shipping dropped No major marketing Heavy online advertising for suppliers Less media coverage 2000$ for leaving the company ± DO: Implement Drop shipping in a manner that the CSL should be 80-85%.

Product Differentiation : a. Brand Image & Capital Requirements : .Porter¶s Forces ‡ Power of Suppliers: [ Low] Factors & barriers defining the bargaining power of suppliers 1) Number of suppliers: Large number of Suppliers 2) Uniqueness of product or service : a) Many manufacturers available b) Vendors were On-line to access Sales. Guaranteed Price protection & 110 % refund on excess 2. Customer Service b. Inventory. rejections and could see the business from their point of view. c) Substitute of suppliers is available d) Percentage bought by the purchasing industry : 1/5 th of the Online sales ‡ Threat of New Entrant: [ High ] :Entry Barriers 1. Culture ± Customer Oriented 3. Largest On-line Shoe store b.Analysis. Economies of scale : a.

4. Product or Service Characteristics : Product upto 90 % is still by hard sales. Height of Exit Barriers : Major investment of time & money. Provide customer service & post sales support to partners customers 2. fulfill Orders. Host. Invited Shoe manufacturers to work as Partners ± ³Powered by Zappos´ b. On line subscriber growing @ 8% 3. converting this to service is still a unique proposition. . Design.Rivalry with Competitors :[ High ] Number of Competitors:(online & office stores & perception) Barriers: a. Rate of Industry Growth : $ 40 Billion. Own Partner Web site c.

. Power of Customer: [ Low ] 1. Twitter & Blogs ± direct & quick response of customer & employees. d. 4. Zappos. not product. g. Hiring-Customer oriented 2. One to one Customer contact by employees. b) Substitute products : There is no substitute to foot wear and most of major manufacturers are looped in by the company. 75% repeat f. Number of alternative suppliers : Not many alternative supplier with similar options.Daily Shoe Digest Q & Answers e. Potential to integrate backwards : a. c. Integrated Product with Service b. Percentage of costs of the buyer : Low cost Guaranteed 5.Threat of Substitute Product/ Service: [ Low] a) Product is service. Buyer earns low profits and is very sensitive to costs and service differences : Buyer is sensitive to service difference and transparency. Connecting to Brand name. 3. 80% Customer-Word of Mouth. Changing suppliers cost very little : Not many similar service+Product provider available.

Continuum of Resource Sustainability: Level of Sustainability Slow: Can be created slowly Standard Cycle: 1) Can have economies Of scale 2) Standardized Process 3) Culture Fast: 1) Easily duplicated (entry barriers ±low) 2) Its Idea Driven 3) Flexible and Dynamic ‡ They are somewhere in the middle of Standard Cycle and Fast Cycle.IKEA . ‡ Have to be fast as te market is dynamic ‡ Mass Customization??? Example .

and customize 2) Use Online space to develop brand 3) Use Employees to differentiate 4) Use Culture and Online Dist. To develop globally ST Strategy: 1) Use culture as competitive advantage which is difficult to copy 2) Use Assets ³employees cust svc´ to challenge new entrants 3) Use Modular designs to customise Weaknesses: 1) High cost 2) Only online 3) New ideas difficult WO Strategy: 1) Strategic alliance to create ideas 2) Global presence can reduce cost with effective SCM WT Strategy: 1) Emphasize cost reduction to reduce BEP 2) Brand & Diffrentiation use to delay Matuarity .TOWS Analysis: Strengths: 1) Culture 2) Online Distribution 3) Customer Service 4) Employees 5) Established Oppurtunity: 1) Customization 2) Global Positioning 3) Online Users growth 4) Differentiation 5) Strategic Alliance Threats: 1) New entrants 2) PLC of shoe 3) Global demand may vary 4) Trend of Superstore 5) Diffrentiation low SO Strategy: 1) Use Online Distr.

Pitfalls of excess reliance on Media: Lack of anonymity Negative Publicity Negative Publicity ± Spreads Faster Employees Listening with only ear !! First Call conversions ± may be less .

Thank you !!!! .

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