September 13, 2013.
1. The great customer service at Zappos increases costs — free same-day shipping extensive employee training and so on. Do you think the company can reduce costs in other areas of operations to help offset these costs?
Yes. There are several ways that Zappos can help offset the costs incurred in customer service. Some of the ways the company can reduce its operational costs include
Outsourcing: Zappos need to carefully look at all the services it uses. Some services are very expensive for the company to use especially information technology such as call centers. Zappos can opt to outsource some of these services including warehouses and maintenance of equipment. This helps in reducing costs incurred during downtime and upgrading of such equipment (Rust, Moorman & Dickson, 2002).
Re-evaluating employees` roles Zappos can re-evaluate the role of its employees especially the customer care center. This can include giving employees` more than one role that can be handled together with their current roles in the organization. Customer care personnel at Zappos being highly motivated and highly trained could handle other duties including marketing online or through the call center (Abrams, 2012). Other employees can also be given extra roles as long as they are not overwhelmed to an extent of jeopardizing quality of service. This normally reduces employment of new employees to handle a job that can be handled efficiently by the existing employees.
Cutting down on travel costs: most companies use a lot of resources traveling for conferences, meetings and seminars. This is more so for the company`s executives who use significant portion of profits for expensive lifestyles during the trip (Rust, et al., 2002). Zappos can consider the use of video conferencing to minimize cost and also hasten these meetings to save time for employees to do their work. Zappos can save a great deal in operational costs if they adopt these steps.
2. By off shoring its customer call center, even if Zappos offers wages and perks much higher than the going rate, it would stand to save substantial amounts of money. Do you think Zappos should consider this? Why or why not?
The greatest weapon that Zappos has against its competitors is excellent customer service. The company boasts of offering the best customer service in the industry (Abrams, 2012). Nevertheless, off shoring its call centers risks jeopardizing the quality of customer service offered by the company to its customers. Off shoring may lead to disconnect between the company`s values, mission and vision (Ukens, 2007). When such a noble service remains centralized, especially for an online business like Zappos, it enhances consistency in service quality and customer relations. Customer relations are an important element for any business success.
3. In what other ways do you think Zappos can affordably enhance its customer service?
A call center is a really expensive way of promoting customer service (Abrams, 2012). In the modern age, social media is increasingly becoming popular across all populations. It is time for Zappos to take advantage of this opportunity to connect with customers. Zappos can create online accounts with various social sites including Twitter, Facebook, Whattsup, Myspace and other sites to maintain instant communication with customers. In addition the company can establish a live chat in their site to stay connected to customers. This is a relatively cheaper way of offering customer service to customers.
Consequently, the company can off shore its services such as opening stores in each areas of operation. This can help in adding a personal touch to the services provided to customers. Off shoring can help customers to establish with employees and be able to interact. Employees can address customers with their surname as they have established a good relation. This is an affordable way of enhancing customer service.
Abrams, R. (2012). En-tre-pre-neur-ship: a real-world approach : hands-on guide for today`s entrepreneur. Palo Alto, CA: Planning Shop.
Rust, R. T., Moorman, C., & Dickson, P. R. (2002). Getting return on quality: revenue expansion, cost reduction, or both? The Journal of Marketing, 7-24.
Ukens, L. (2007). 101 ways to improve customer service training, tools, tips, and techniques. San Francisco, CA Hoboken, NJ: Pfeiffer J. Wiley & Sons.