The 4 ingredients to Zappos’ CX success formula

zarina
Contributor: Zarina de Ruiter
Posted: 04/03/2018

“We’ve been obsessed with our customers’ happiness from day 1,” says the online retailer’s Head of Customer Research.

Customer experience

Alex Genov is the Head of Customer Research at US online shoe and clothes retailer Zappos, which is known for its exceptional customer experience.

Genov is an experienced customer research professional who applies his experimental social psychology background and his passion for research, design and innovation to solving important customer and business problems.

His professional goal is to help teams create remarkable products and services, which make people's lives easier and more enjoyable.

Currently, Genov is leading customer research for the Zappos Family of Companies. In previous positions, he was responsible for research and usability of the products and services for companies like TurboTax (Intuit), State Farm Insurance and the Active Network.  

In this interview for CX Network he explains how the company’s “obsession” with their customers’ happiness has led them to become one of the most respected brands when it comes to the customer experience they’re providing.

SEE ALSO: The Global State of Customer Experience 2018 Survey

Hi Alex, welcome to CX Network. Zappos is known as one of the undisputable leaders within customer experience, what are the key ingredients for this successful formula?

Zappos is a unique company and early on the leadership realised there are a few key ingredients that make the company so successful.

First and foremost, that is customer obsession. Just like our parent company Amazon, we’ve been obsessed with our customers’ happiness from day one. That goes together with an exceptional customer service, something that sets us apart from 99 per cent of the companies out there.

The second one is our focus on employee and vendor happiness, because without employees and vendors we wouldn’t have the customers. The third one is our company culture, which ties all of this together. And the fourth one is community. Zappos is very invested in improving with our community.

It’s really about treating all of these parties right. Ensuring everybody is understood and served well is what has made Zappos so successful.

"Just like our parent company Amazon, we’ve been obsessed with our customers’ happiness from day one."


What have been the biggest challenges on the journey to getting to this success?

Nowadays everyone is talking about wow-ing customers, but this already happened at Zappos more than 15 years ago. At the time no-one was selling shoes online and they said ‘we’re going to try it and see what happens. They showed a picture of a shoe on the website and when someone decided to click on the link and wanted to buy it, Zappos bought it at a store and shipped it over to the customer.

Zappos understood things could go wrong in this process, and sometimes they did, but they went out of their way to make things right for their customers. And one day they received an awesome email from a customer with the subject line ‘Wow!’. The customer said in the email that something went wrong but she was amazed that Zappos went out of their way to fix it – and this was more than 16 years ago.

For many companies customer service is a cost to be cut, which results in a lot of customer pain. The challenge is to really focus and invest in customer service; be persistent and stay on course.

Another set of challenges comes from pure change. We have stable core values but we also innovate and evolve in many ways. This includes organisational changes, such as breaking down siloes and moving to self-management.

We also moved from the suburbs to downtown Las Vegas with the purpose of integrating into the community, which wasn’t easy. The challenge here was to get everyone’s feedback and get everyone on board.

"For many companies customer service is a cost to be cut, which results in a lot of customer pain."


With a continued rise in customer expectations led by new brands disrupting the market how do you ensure that Zappos stays a market leader and keeps up with constantly changing demands?

I lead customer research for Zappos, and everything that has to do with understanding customers as people. The challenge for many companies is that of organisational silos; different parts of the organisation are usually very separate. People build their own little empires, they have their own budgets and they carve out their own turf.

This is a big problem if you think about the customer. If you ask ‘who is the customer’ from different parts of the organisation, because of the silos you will be given different answers. And at the end of the day you don’t get a full 360-degree perspective of the customer as a whole person.

Within Zappos we have a new structure without an organisational chart and without titles. Everyone is encouraged to pursue their passion and do their best work to make the customers happy. The research team and I are helping anybody in the company with customer research questions. This means we’ll have a single point of contact which allows us to connect the dots, get people together and bridge those silos.

With a single focus on the customer and a group that actively tries to break down silos, you plan together as an organisation for big customer research projects. You cannot understand the customers as people when you work in strict silos, i.e. you only know a customer as a shopper in store or as a caller, which might be the same person but you’re unable to connect the dots. This is one area where we really innovate at Zappos; how we understand our customers. 

"You cannot understand the customers as people when you work in strict silos."


There is a huge amount of chatter about artificial intelligence and automation in customer experience to help meet these changing customer expectations, but what are realistic opportunities for these advancements within CX to drive through improvements in 2018?

It is one of those technology fads, but there is tremendous potential. Data science is real and can really help businesses but it is in its infancy. The bigger danger here is to get enamoured with the technology idea first and then to start looking for problems to solve, rather than have concrete problem and finding ways to solve them. It is a subtle but very important difference.

If you take the first approach, what can happen is that a company believes chatbots are the great new thing so they should apply chatbots throughout. They’ll have algorithms, look at customer data and crunch a bunch of numbers to create a great CX. But they most likely won’t.

SEE ALSO: AI 2020 – The Future of Customer Experience

And let’s look at personalisation. A lot of these tools are to help personalisation, especially in ecommerce and retail. But they’re talking about best guess recommendations. This is very different from personalisation. If a customer bought shoes and on the same page you ask: ‘How about you buy these other similar shoes?’, that is a crude way to nudge you to buy more.

It’s a different story if personalisation was about the person and looks at why you are buying shoes. Are you going to a fancy event? Okay, how about a necklace to match? Using algorithms like this is much more meaningful.

Another thing to keep in mind is that automation limits the emotional connection. We have a great customer service on our phones through empowering our customer service reps; if a customer wants to talk for two hours they can. But how can we emulate that experience with technology?

If we’re talking about true personalisation, some people want to talk on the phone and others don’t. It’s up to us to understand that. We can automate things but why not bring the best from personal interactions to automated interactions as well?

"Automation limits the emotional connection."


That is a very good point. One challenge that often comes up in AI is finding the right balance between automation and the human touch, what advice can you share with organisations to help them find that balance?

You need to focus on the customer and find what problems they have that need to be solved. Brainstorm and apply design thinking on different ways of solving that problem. Start with ‘what’, don’t start with the ‘how’, because technology and the solutions are the ‘how’ and the customer problems are the ‘what’.

Is the best way to solve the problem to connect the customer to a live person? Chatbot? AI? Align the solution with the problem, not the other way around. Don’t just create a chatbot because it’s really trendy.

So first really invest in understanding your customers, then in serving your customers and finally in the technology. A lot of things can be solved without technology.

"You need to focus on the customer and find what problems they have that need to be solved."


Taking all these market changes on board, ultimately what is the single most important aspect to creating an exceptional customer experience strategy?

I cannot emphasise this enough but focus on the customer and understand the customer as a person, holistically.

Also try to work without silos. In many companies it is difficult to do what Zappos does but even in traditional organisations think about what people can do to collaborate and to break down silos as much as possible. And then the magic will happen.

So if you really focus on the customer, treat your employees right and you have a great company culture – that is created organically and not mandated by a few people at the top – then good things will happen.

"Focus on the customer and understand the customer as a person, holistically."


Thank you very much for your time, Alex, that is the perfect advice to wrap up this interview with!

Tune in two week time for part 2 of this interview in which Alex answers the three burning CX questions we ask our interviewees: the most overrated industry buzzword, the best experience he has received and the biggest learning on his journey so far.

zarina
Contributor: Zarina de Ruiter
Posted: 04/03/2018