What Hotels Can Learn from Retail Call Centers Part 2: Zappos
June 16, 2014 3:56am
By Christine Brosnahan
This is the second article from Aspire that captures our comprehensive research on how the best-in-class retail call centers (contact centers) operate, and what opportunities hospitality-oriented call centers might model. Our first article examined L.L.Bean's ability to maintain top service rankings through their focus on the customer and a capacity for making complex operations appear simple to execute.
This article looks at another customer service champion, at least according to J.D. Power's Top 40 in 2011 and many other consumer lists since then: Zappos.com. They've been impressing Aspire for some time, so we decided to take a closer look. Read on to learn more about what Zappos customers love about the company's service delivery, and see what lessons you can walk away with and use at your hospitality call center.
Similarities & Differences: The Success Factor
Like L.L.Bean, Zappos is known for its outstanding call center experience and sees the voice channel as a cost-effective key strategy to improve new customer acquisition, existing customer wallet share capture, and loyalty overall. So we started by exploring the similarities and differences between these two companies that make their results and "customer love" factor so high.
We examined their leaders, company cultures, and specific strategies, and found that the single biggest difference lies in their distribution. L.L.Bean is both an online and brick and mortar company, while Zappos is 96% online-and yet both are highly successful operations. So what really drives their success? For these two companies, the customer experience is at the center of every concept, process, and decision.
Zappos is Anything but Normal!
You know something is different from the moment you arrive at the Zappos call center, housed in an old government building in downtown Las Vegas. The exterior of the building hasn't changed much, with the exception of the large Zappos signage. And yet: it doesn't feel anything like a government building on the inside. It all comes down to the energy of the people who work there.
Service enthusiasts may already have studied up on Zappos, and possibly even read one of their books. Everything you read is true. It is FUN. From the moment you step in the lobby at Zappos there is a sense of fun. Everyone from the parking attendant, to management, to Erika my tour guide wears a smile on their face, not because they have to: rather, because they are happy. As many of us know, high positivity leads to high profitability. So, how does Zappos get such happy people to work for them?
They Start with a Belief…
Zappos may have started out selling women's shoes, yet they have never thought of themselves as being in the shoe sales business, or even in the retail sales business. Zappos believes they are in the customer service business, and they just so happen to sell shoes. In every interaction-whether sales related or not-Zappos sells a customer experience.
Much like L.L.Bean, Zappos believes their purpose is to satisfy the customer first, and if done correctly, the revenue will follow. It is the "why" behind what they do, and how they drive their business operations.
Zappos would rather lose a customer then sell them an item they aren't looking for. They will go out of their way to satisfy their customers and celebrate them along the way. If Zappos can't provide an item, it won't stop them from helping a customer find it elsewhere. Yes: they will help a customer, even if it means going to the competitor for purchase. The first of many WOWs I witnessed while visiting their office.
…And Add People Who Believe the Same Thing!
Zappos is known for their culture, and they take it very seriously. According to Jon, a Zappos insight specialist, less than 50% of the selection criteria when hiring is based on skill set. More important to Zappos is how well a candidate will embrace their culture. Interviewing is done through numerous interactions and assessments, Jon explained. In each interaction, the Zappos team listens for key responses that confirm or deny how well the individual aligns with the Zappos Family Core Values, and thus how well they will fit into the Zappos culture.
Culture Always Matters Most
Even Zappos' core values are unique in how they define their purpose. They believe deeply in:
While interviewing candidates, Zappos knows that if the person never talks about a situation that includes a perspective outside of their own, they are likely not a team player. If the candidate does not like change, then they are likely not able to embrace or drive change. If they focus on problems rather than solutions, they will be less likely to succeed in such a positive environment.
Everyone Sells Service
At its heart, Zappos training is a three-week deep dive into the company's culture and one week of learning and practicing how to interact with customers on the phone. At the end of this training, every new hire is made "The Offer," a now infamous incentive program that pays employees to quit.
After training, service associates are offered the full amount of pay they've earned to date in addition to a full month's salary if they would like to quit. Believing that several employees would take advantage of "the Offer," I asked Jon how often they pay employees to quit. I was surprised to learn that on average only about 2% take the money.
The Offer program helps ensure that every Zappos employee knows and lives the company's core values. They are taught how Zappos came to be and what values will help keep them relevant. And employees at Zappos never forget where they started. During the peak season, every employee is required to work customer service shifts. This enables all staff to continually build relationships with customers. Like L.L.Bean, the focus is not on revenue; it is on the customer.
While traditional thinking would schedule new workers on the night shift, the night shift at Zappos does not belong to new hires. To work the night shift at Zappos you actually have to take special classes and apply. Those that get the night shift earned the right to be there and take the position seriously. No wonder service at 2 a.m. is as attentive as service at 10 a.m.
Happy People Sell More!
Have you taken a look around your operation, and can you say that every one of your employees looks and acts truly happy? Are your employees having fun at work? Your customers can tell if not. What stands in the way of fun?
Fun: it is more business than you think… How exactly does Zappos make answering the phone so much fun?
Engaging Work Environments Matter
The environment at Zappos is exciting, and the relationships that flourish there are real. Zappos works to bring employees into contact with each other to strengthen working relationships. Everything from the entrance in the building to the many eating areas scattered throughout each of the nine floors was purposely designed to cause some level of congestion, and thus conversation.
We all know that mealtimes can be great for fostering conversation and connection. That's why Zappos also provides many food items to employees at low or no cost. Add the fact that employees get a 40% discount on Zappos products, and you start to get the idea that the company's commitment to WOW is not just for their customers; it is also for their employees!
Creating Culture Buy-In
The customer service representatives at Zappos are not grouped together in one area. They are spread throughout other departments in smaller groups to further relationships across the company. How many hospitality call centers are designed to have agents answering calls among other working groups? And how often are they completely separate-possibly even off-site?
In some cases, hospitality sales agents have different rules, different dress codes, and different benefits from the rest of the staff. Not at Zappos. Even the CEO sits among others, offering not just an "open" door policy-a NO door policy. There are no private offices in the Zappos call center with one exception: an office for the Zappos personal coach.
Yes… Zappos maintains a personal coach for anyone who would like one-on-one coaching in a safe, confidential environment. Coaching can be work-related or personal. Once coaching is requested, the employee and coach meet to set goals and develop a plan. The employee receives ongoing support along the way to ensure that they remain on target. And of course: there is always a celebration when a goal is met.
Ongoing Learning Supports Revenue Growth
Who would want to work at a fun place like Zappos? Just about everyone! In fact, in 2014 Zappos was named one of Fortune's 100 best companies to work for. And yet, Zappos doesn't offer more money than other call centers. So what really sets them apart? (Hint: it's not just their great benefit package…)
Similar to the pay structure at L.L.Bean, Zappos employees are paid a wage and not an incentive. To receive a raise, an agent must gain additional skills. Currently Zappos offers 27 such professional development classes, Jon informed me. If an employee opts not to further themselves with new skills, their hourly wage will remain the same year over year. This approach promotes an ongoing learning environment, which serves both the employee and Zappos.
Make your Call Center an Experience Center
Aspire has spent years preaching that agents are the eyes of the customer, so value-oriented and experiential content matters. At both L.L.Bean and Zappos, product pictures are not an afterthought. They are a major focus. There are staff members whose job it is to look at a product and determine how many different angles they can and should photograph. Each picture emphasizes a different feature of the product, and the images are easily accessed by both customers and employees.
If Zappos can take multiple pictures of a shoe, why can't hotels take more than one picture of a guest room? Within hospitality, most hotels display a picture or two of each room type (rarely does each individual room get its own photo), offering little ability to really experience or describe how the room feels.
Would you sell more if your room pictures spoke for themselves? Would your agents be better at describing the value proposition if they could see the room? Would your customers be more engaged in their travel if they could picture themselves in the room before they got there? According to retailers, YES.
Speed & Style: They Matter
Like L.L.Bean, Zappos utilizes a proprietary system. Unlike L.L.Bean, their system is more current and robust. Most impressive is the integration and accessibility of multi-media and online content. Videos, photos, and speed all enhance their system and the amount of information it can provide to agents so they can better serve customers. Plus, Zappos enables its employees to utilize more than its own system. Agents are empowered to surf elsewhere to find whatever a customer is seeking, and they have the connection speeds to do it quickly.
Creating a Buying Environment
Our Zappos shop call research showed agents know how to engage a customer into buying without making it feel like a sale. Aspire knows no one wants to be sold. Customers want to buy, and the Zappos approach understands this fact.
Zappos gets that the reason customers call is because they want to talk, so they do not measure talk time. Some service calls have gone on for hours, without resulting in any new revenue. At the same time, this commitment to service delivery has created customers for life because Zappos customers know that they will always leave happy, no matter how long it takes.
Measure What is Valued
Zappos doesn't measure what doesn't matter to them. While some hospitality call centers are starting to move away from measuring talk time, the paradigm is hard to let go of because some believe it's a measure of efficiency. Those people should also ask: is focusing on talk time cutting off engagement and negatively impacting the customer buying experience? If so, you're losing revenue.
Zappos measures efficiency differently, by focusing on how much time a representative actually spends interacting with a customer. Every employee is expected to spend at least 80% of their time customer-facing. This could include voice, email, or letter writing. The other 20% is for breaks and personal development, such as scheduled training, coaching time, or skill classes. The amount of time employees spend customer-facing further indicates Zappos' commitment to the customer experience.
What you Focus on Comes True: The Zappos Profitability Formula
Key Performance Indicators are shared throughout the Zappos center. Employees know how they performed the previous day and during the month-to-date. Revenue isn't listed on the board. Instead you see stats:
If an agent does not WOW enough customers, they get coached on what else could be done. Zappos believes in exceeding expectations, and they practice this throughout the organization. If you order from Zappos, you might be one of the lucky ones who receives some additional token of appreciation in your package, or free overnight shipping.
From all that Zappos does to provide outstanding service, what lessons can hospitality take to WOW more customers and see the return in both retention (staff & customers) and revenue?
What Hospitality Call Centers Can Learn from Zappos
1. Culture comes first. If you want to create raving fans and customers, your culture should put customers at the center. In hospitality, service is important, and yet revenue is what's measured. How can your hotel create a culture of service? Zappos proves: put the customer first, and the profits will follow!
2. Fun matters! Happy people sell more, and hotels can learn a thing or two from Zappos about creating engaging and energetic environments around every corner: by mixing up the offices, meal or break rooms, and encouraging people to bring "a little weirdness" with them.
3. Create a culture fit. Many hotels already deal with high turnover, especially in their call centers. Wouldn't it be great to reduce that number, and reduce the waste of letting someone go after you've already invested in them? Zappos has put a tremendous amount of thought and action behind finding people that fit their culture first, and then ensuring anyone not aligned with their mission doesn't stick around for long. Hotels can do the same if they get a little creative. How effective is your interview process?
4. Keep people engaged and learning. If someone's performance isn't improving, neither is their value. Zappos provides ongoing learning and support and uses them to encourage employees to grow within the company. How is the hospitality industry growing employees' skills to ensure long-term success, positivity, and profitability?
5. Focus on what matters most. The same way Zappos measures and shares the metrics they want employees to focus on, hotels should determine what factors really matter for customer satisfaction. If we've learned anything from Zappos, it's that providing an outstanding customer experience increases acquisition, loyalty, and sales.
Isn't it time for a call center strategy paradigm shift?
Want to learn more on how retail strategies can help improve your hotel's financial performance? For more information on Aspire's research findings or our call center services, get in touch at firstname.lastname@example.org.
call center strategies
Having operated Call Centers around the globe, Chris provided a variety of hands on experiences. In addition, Chris was an Executive Leader with Carlson Corporation where she oversaw a $45 million dollar budget. Chris understands the reality of the continual evolution of call centers and the pressures associated with balancing efficiencies with effectiveness in an operation. Her business expertise includes: Director of IT, Regional Financial Controller, Outbound Teleservices, and General Manager. She is an energetic leader that consistently delivers measurable results for businesses.
Contact: Chris Brosnahan
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