Zappos is an online retailer that has been classified as the largest in shoe sales, but it is well known for being at the top for customer satisfaction more than any other online retailer. Zappos has built itself with a focus that happiness of the stakeholders will contribute to its success. Most businesses focus first on profit making the customer satisfaction later, but Zappos, it believes that customers’ satisfaction should come before profits. Zappos trusts that when customers are satisfied, they will become loyal and will tend to buy more, which will lead to profits (Warrick, Milliman, & Ferguson, 2016). Despite early challenges, Zappos ideas have worked beyond expectations
Major Impacts of Zappos’ Leadership on its Stakeholders
The major impacts of Zappos leadership to its stakeholders include:
Shopping, Shipping, and Customer services
Zappos has strived to make shopping experience enjoyable by streamlining its website so that the shopping experience can be easy. They have grouped their products in specialized segments, and customers are able to view each product from multiple angles through photographs provided, and also go a step further by making short videos that highlight the product’s features. Zappos website only displays an item which is in stock; once the item is sold, it is removed from the listing to reduce customer’s frustration (Warrick, Milliman, & Ferguson, 2016).
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One of the most significant impacts of Zappos to its customers is their return policy. Customers are allowed to return a product and get a full refund if they are not satisfied with a purchase. The company prints a pre-paid shipping label on each product, which allows all domestic customers to return the products they are not satisfied with for free. Even though this strategy is expensive, it has created a unique relationship with the customers, and it has recorded that the most profitable customers are those with higher return percentages because they tend to purchase more items due to the customer service offered and return policy. This makes the customers to be loyal to the company, which makes it successful.
Zappos also has a unique way when focusing on customer service, which is distinctive from the rest of the industry. Guided by its main core that the best customer service is the one that makes the customer happy, Zappos handles its customers’ issues indifferently to make sure they are satisfied. The customers are encouraged to call and ask any questions through the number which they display on every page of their website. The employees are allowed to spend as much time as possible communicating with the customers until the customers are satisfied with all the need or worries they had. The company is also actively using Facebook, Twitter, and other social media sites to respond to customers issues. Some of the great customer services include customer support calls which may last for hours and sending flowers to customers during their birthdays (Collier, et al, 2018). These services have caused Zappos to be highly praised by everyone for offering the best customer services.
Unique Benefits and Work-Life Integration for Employees
Zappos has a unique way of benefits that it provides to its employees. It has an extensive health plan that covers 100% of employees’ medical benefits and an average of 85% of employees’ dependents medical expenses. It also provides employees with vision, dental, and life insurance, free lunch and snacks, paid volunteer work, 40% employee discount among others (Green, 2017). Its central core value is creating a positive team and family spirit. This has established friendship among employees where they support each other within the company and also outside.
Service to the Community
Zappos donates shoes and gifts to elementary school students, donate money to organizations such as Shade Tree and Nevada Childhood Cancer Foundation. Zappos also created Zappos Leading Environment Awareness for the Future (L.E.A.F), which is an initiative that focuses several environmental efforts such as community gardens and recycling program.
Actions that Other Companies can Make to Mimic this Culture
Any company that plans to excel should mimic some or all the actions of the Zappos culture. The main action that they should absorb are those satisfying customers and creating a work-life integration. Companies should focus more on creating a culture that will make sure that all of its customers are satisfied with the products and services they offer. If customers are satisfied, they will buy more regularly and will be loyal to the company, and they will also refer their family and friends to come and buy from the same company. A company that integrates its employees creates an environment which is the best for them to work in. They will be dedicated in making sure that the company attains its targeted results.
Effectiveness of the Core Values to Developing a Culture of Ethicalness
Zappos has several core values which has led in creating a unique ethical culture with its stakeholders. To start with, Zappos has been able to develop a customer service platform that always leave their customers fully satisfied. Zappos has also created open and honest relationships with both its customers and employees where everyone is informed and asked for opinion before the company makes a certain decision. This move has made all stakeholders to feel that they are a part of the Zappos’ family, and they do all their best to make sure that the company strives, and they are very loyal to it. Zappos has developed the culture of being humble and passionate which has helped it through some difficult times. These values enabled the company to retain customers during the time it was hacked where customers’ information was stolen. The company was honest with its customers who instead of leaving the company, they stayed because the Zappos did not hide this information from them.
Ethical Challenges that Zappos Faces
Just like any other retailer, Zappos also faces ethical challenges in its work. Despite its effort on being the best company to maintain high ethical issues, there are still some loopholes that can either taint its ethical standard or affect its finances. Hacking and loss of customers’ information are one of its main challenges. If there is a repeat of customers’ data being stolen from its servers, it will cause distrust from them, and this may affect all the work that Zappos has tried to achieve throughout all these years. This is because Zappos would have broken its trust of customers in protecting their personal information. Also, hacking may also cause technical problems like the ones experienced in 2010 and 2011 so that the company can get losses (Collier, et al, 2018). If such technical problems are repeated several times, they may incur losses that the company cannot take, which may force the company to cut down the incentive it gives to the customers. To solve this problem, Zappos should focus on creating strong systems that are hard to be hacked, and this will prevent any unforeseen problem which may be associated with hacking.
Another challenge that Zappos faces is its relationship with Amazon. Although it operates as an independent company, its operational methods differ from that of its mother company, and Amazon may try to find ways of infiltrating into the company’s decision-making, which may affect its longstanding relationship with its customers (Collier, et al, 2018). Amazon is profit based while Zappos is customer satisfaction based. This difference will always cause friction between the two companies. To solve this, Zappos should create a well-elaborated plan on how to manage its relationship with Amazon by forming a strong shield, especially with its top management which cannot be infiltrated by Amazon or any other organization.
Zappos also continues having challenges in recruiting new employees. Zappos not only look for employees with expertise in their line of work, but who also believe and practice in its cultural practices. Finding a person with both qualities is hard and time-consuming, and also, the company is forced to spend a lot of money and time on training new employees (Green, 2017). To solve this challenge, Zappos should develop a plan that will minimize the process that new employees go through which will save both time and money for the company. This can be achieved by raising bars during interviews where only the individuals who possess these two characters qualify.
Major Ethical Challenges that Zappos Has Faced
Zappos has experienced challenges which have tested its relationship with its stakeholders. First was the 2008 layoffs; it was forced to lay off some of its employees due to harsh economic times. Even though the move was mandatory for its survival, it was against its cultural beliefs. To prevent causing an outrage, it gave those employees generous severance packages and also involved even the customers in this process.
Acquisition by Amazon was also a major challenge for Zappos because most customers believed that Amazon is going to change the working process of Zappos. The Zappos’ CEO assured them that despite the acquisition, it was still an independent company and Amazon would not influence its decision making. He also explained to them the reason for it merged with the Amazon because it was for the good of every stakeholder.
Technical problems and theft of customers information was the biggest challenge for Zappos. It solved the challenge by taking responsibility for these vices. Despite assuring customers that they have improved their website security, they should not have switched off their call lines because this made some customers to lose trust with the company (Warrick, Milliman, & Ferguson, 2016).
In conclusion, Zappos has proved that a company can focus mainly on customer satisfaction instead of being driven by profits and still make huge profits. It has proven that if any company concentrates on making all its stakeholders happy, it will be able to thrive for a very long time and make the profit in the process.
References
Collier, J. E., Barnes, D. C., Abney, A. K., & Pelletier, M. J. (2018). Idiosyncratic service experiences: When customers desire the extraordinary in a service encounter. Journal of Business Research , 84 , 150-161.
Green, S. (2017). Culture Hacker: Reprogramming Your Employee Experience to Improve Customer Service, Retention, and Performance . John Wiley & Sons.
Warrick, D. D., Milliman, J. F., & Ferguson, J. M. (2016). Lessons learned from Zappos on what it takes to build high performance cultures. Organ Dyn .
