The 1999 creation of popular online retailer Zappos was inspired by founder Nick Swimmurn's inability to find a specific pair of shoes at his local mall. What started as an online retailing venture that primarily sold footwear has diversified to become a leading online vendor of shoes, handbags, clothing, sunglasses, and accessories. Zappos has made customer service one of its core competencies. CEO Tony Hsieh believed that a strong customer-service experience leads to lasting customer loyalty. In addition, instead of viewing the lifetime value of a customer as a fixed amount, Zappos's management believes that the value of a customer can grow because of excellent customer service. Zappos places high priority on its customer call team compared to other retailing companies. Specifically, Zappos takes a uniquely human approach to customer calls and e-mails to create a memorable and high-quality customer-service experience. Many online retailers (such as Amazon) use telephone contact as a last resort, with many clicks required for a customer to find a service number. However, Zappos invites customers to call by placing a button with its telephone number right at the top of the homepage. Whereas some companies are straying from call-based customer service, Zappos believes that the telephone is a valuable service tool with a powerful ability to create more intimate human contact. Zappos management believes that the best candidates for its call and e-mail team are permanent employees trained in house, rather than lower-cost temporary or outsourced workers. Permanent employees are more likely to adopt the corporate culture and company values. Zappos combined its headquarters in Las Vegas, Nevada, with its call center team to fully integrate customer service-employees with other departments, creating a more unified atmosphere. Zappos identified its biggest problem in creating a strong customer-service experience as finding the best potential employees to staff the call center. Zappos's hiring process is very selective. Unlike other companies, Zappos bases its successful process largely on its perception of candidates' "cultural fit," which accounts for 50 percent of the hiring decision. Current employees are encouraged to voice their opinions on whether or not potential hires can fit within the Zappos family culture and exhibit strong customer-service skills. The company has created its own style and methodology for training its call center employees. Once hired, Zappos employees spend their first weeks in the call center learning how to serve the customer's needs. During this period, a training team also instills in each employee Zappos's 10 core values, which are expected to be seen in the workplace every day. Many of these values-which range from "Deliver WOW Through Service" to "Be Adventurous, Creative, and Open-Minded"-are what makes the service experience different at Zappos. New and old employees take part in a variety of team-building and bonding activities throughout the year. These include activities like scavenger hunts, picnics, and trips to the bowling alley to make all employees feel comfortable with one another. After the call center training and scavenger hunt, new employees are celebrated at a graduation ceremony, accompanied by the strains of Pomp and Circumstance. If new employees feel they cannot commit fully to the company culture and values, Zappos offers them $3,000 to leave- no questions asked. Zappos is fully committed to hiring only dedicated members as part of its service team. Zappos's scrupulous hiring process and its approach of teaching the ten core values to new call and email center employees have resulted in a highly rated customer service experience. Zappos' employees do not work from a script and use their own judgment to determine what is needed to make the customer satisfied. Employees are not forced to ask supervisors for permission about delivering the "WOW" factor and are known to go above and beyond for customers at their own discretion. In the past, Zappos employees have upgraded shipping speeds for free, sent postcards to travelers, and even gifted flowers and cookies to customers to provide the "WOW" factor. The reward for Zappos's customer-centric mentality is customer retention: 75 percent of sales are from repeat buyers. In addition to a uniquely trained call center team, Zappos offers many other features to ensure that the service experience is satisfying for potential customers. Shipping is fast and free on all products, and the company offers a 365-day return policy to guarantee that customers are pleased with their purchases. Since 2009, Zappos has operated as a subsidiary of Amazon and brings in over $1 billion in revenue every year. Amazon acquired Zappos because of its one-of-a-kind company culture and its dedication to customer service, which are both valuable assets. Recognizing this, Amazon has allowed Zappos to operate as an independent entity and to maintain its customer-centric culture. Zappos employees are still trained on the same 10 core values and encouraged to keep putting a human face on the company. With over 1,500 employees, a majority of them working in the call and e-mail centers, Zappos is considered one of the top companies in the customer-service domain. 29 Questions 1. How does Zappos create value for its customers? 2. What are the key aspects of Zappos's corporate culture? 3. Can a company stay profitable by being customer-centric? Is Zappos's business model sustainable?