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Zappos is well known all over the world as the company that loves its clients and that is ready to fulfill even the most difficult requests. Moreover, it is famous not only for its outstanding service but also for the excellent way all its employees are treated. Zappos’ values are focused on happiness. Thus, happy employees work better, while happy clients buy more, and that is the way the company works. However, all these factors require huge money investments and human force, so some ways to optimize the costs and operations should be considered.
The ways to reduce costs are among the most discussed topics of the managers of any company. In this regard, experts advise: “Forget about finding a single idea that would radically change the cost structure of your organization or department, thereby solving your problem in one go” (Coyne, 2010). Moreover, a complex approach is needed. At Zappos, some money-saving activities might also be implemented. Firstly, the company can try to change its ‘free shipping’ strategy to ‘one-dollar shipping’ one. Perhaps, customers will not feel much difference, but this change will accumulate good money for the company. In addition to this, Zappos can introduce its delivery points in the most popular places, such as big shopping malls, to which customers can order free delivery and pick their order there. This could save money for couriers’ wages; however, renting such places also costs money, so this idea needs a deeper planning and precise calculations.
Another idea that can help the company cut costs is to allow the staff work from their homes two times a week, for example. This will save company's expenses for office maintenance (electricity, coffee, water, etc.) and increase staff loyalty, but it will not destroy the high level of corporate culture adherence since employees will still spend much time in the office. The company may also partly offshore some of its functions that are not related to customers directly. Mostly, such a change is possible for some IT specialists.
The company can also organize some fun team-building activities. For example, it can hold office competitions for the best dish of the week when every day, a new team member cooks something nice for their colleagues and brings it to the office. Everyone tastes this dish and chooses the best one, and the winner receives some little prize from company, for example, an opportunity to be one hour late at work on Monday. This idea can save money on employees’ lunches that the company pays for but also work like a team-building activity. Moreover, the company can provide some bonuses to the employees who find the way the company can cut its expense (Coyne, 2010). Thereby, the ways to optimize costs can always be found. However, in the case of Zappos, it is very important to estimate if any economy actions are worth the company’s perfect reputation.
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Offshore Call Centers
The company’s corporate culture values the clients, their needs and happiness most of all among other things. Tony Hsieh from Zappos says: “At Zappos, we want people to call us. We believe that forming personal, emotional connections with our customers is the best way to provide great service” (O’Brien, 2016). The company wants to make clients for life, and the outstanding communication experience provided by its call center staff is one of the main factors on the path to this goal. Today, the company spends much money and time to train its call center representatives and encourage them to provide a perfect service. All future employees train for five weeks before starting their work in the company to make sure that everyone understands the corporate values and all employees are eager to follow them. Zappos wants each member of team to love their work, so after five training weeks, one can get $2,000 compensation and leave, if they feel that they do not fit this job (Rosenbaum, 2010). Thus, it is clear that all call center staff today is fully trained and is always informed about all company’s rules and news.
The entire staff of Zappos call centers is located in the USA now. However, more and more companies nowadays move this function offshore, trying to save expenditures. Implementing such a business decision would surely decrease the costs for Zappos call centers. However, the risks are also very high. Firstly, customers understand that making its call centers offshore, the company wants to save money, and they might perceive this as if they are not respected, feeling that their questions are not worthy to be dealt with directly by the company. Secondly, it is very hard to maintain the needed level of adherence to the corporate culture of the staff located far away. It is crucial that a customer and call center staff are in the same cultural environment, and with offshore call centers, it is impossible. One more thing to mention is the high possibility of foreign accent and language misunderstandings, which is not what customers expect when calling Zappos. The offshore call center staff usually work with the scripts of answers that might be helpful, but customers always feel when the communication is scripted or genuine (Chazal, 2014). Thus, in the short-term perspective, when setting an offshore call center, company will save huge amounts of money on wages and proper training, and, maybe, at first, there will be no negative effect on the sales. However, in the long term, it is easy to predict that without its famous customer service, Zappos will eventually become just another site selling shoes and other goods.
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Excellent service works better than any advertising, and Zappos understands it. Call center and on-line service representatives present company to the customers and have a great influence on whether the customer will become a regular or not. Thus, Chazal (2014) claims that “88% of people have been influenced by an online customer service review when making a buying decision.” That is why, Zappos prefers to hire the staff whose personal values are the same with the corporate ones such as being positive, adventurous, deliver excellent service, and so on (Rosenbaum, 2010). Therefore, moving call centers offshore means a weaker control over hiring the right people. Thus, losing the image, which the company has built for years, and the clients, who have become used to the perfect customer service, is not worth the efforts.
Enhancement of Customer Service
Today, Zappos is one of the best examples of a customer-centric company, mostly thanks to Tony Hsieh who has made happiness the main value of the company. The company does so much to make its clients happy and try to become better every day (O’Brien, 2016). It seems hard to implement even more improvements, especially when hundreds of qualified experts work every day on making Zappos’ service better. In this age of Internet, it is not an easy task to find people who do not shop online. However, some are still afraid of such a way of purchasing things, especially older people. They prefer to deal with real money, and it might be quite challenging for them to buy something online. Such customers would rather go to a usual shop than the online one. For this segment, Zappos can provide the cash-on-delivery system, when a customer can pay after receiving the order. This will also work for those who do not have a credit card at the moment, but who need to make a purchase.
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The company can also add an option to order several things to try in different size or color. While customers can do it now with Zappos, they still need to buy all the things first and then return the ones they do not need, with a free return. However, if somebody does not have the needed amount on the account or they just prefer to pay in cash, this will be the option for such clients. The courier could bring the customer two pairs of shoes in different sizes and after choosing the best one, the customer pays for it. Such an option will save the customer’s time for making a return, which can increase the level of adherence. Another idea to increase customer loyalty is the organization of special parties, events, or prizes for the customers who have spent much money on purchases. For example, if one spends 3,000 dollars a year, they can receive a free ticket to Six Flags and so on. This will serve as a good incentive to buy more at Zappos.
Summing up, it is obvious that any company should always try to find the ways of optimization, either financial and human ones. Thus, it is important to make deliberate decisions and remember that losing money is nothing as compared to losing the company’s reputation. Zappos has proved that it is always on the way of improving and development, while its customers can always be sure that the company will do its best to provide them with the outstanding service.
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