What Any Catalog Success Reader Should Learn From Zappos.com
Some people, Hsieh pointed out, say “‘Yeah, that’s 50 friends, how valuable or qualified are they?’ The thing is, even if they’re not all qualified customers, word still spreads much faster. The No. 1 driver is repeat customers and word-of-mouth. When customers register with us, the No. 1 question we ask is, ‘How did they hear about us?’ The top answer is through the Internet and through friends and family.”
3. Don’t compete on price. “We found that a $10-off coupon increased conversion rates dramatically,” Hsieh recalled, “but found down the road that those customers weren’t loyal to us, and we lost those customers. We quickly stopped doing that; we wanted customers who’d be loyal to Zappos for the long term, who’d buy for our service and selection.”
4. Make sure your Web site inventory is 100 percent accurate. Early on, Zappos didn’t have any inventory. “We’d place orders with manufacturers, and they’d get back to us that they were out of stock, and we’d have to tell customers we were out of stock, Hsieh said. “Customers would e-mail 50 friends and tell them how bad we were. As we grew, we found that even 1 percent inaccuracy of inventory was too much. We decided if we were going to be all about being about top service, we needed inventory to be 99.99 percent accurate. Our Web site is updated in real time, so anything you put in your shopping cart is in our warehouse.”
5. Centrally locate your distribution. Having originally set up its fulfillment center in California, Zappos found that it took up to a week for its East Coast customers to receive their packages.
“A lot of companies don’t pay enough attention to what happens after the checkout,” Hsieh said. “We went to everything overnight, that instant gratification that everybody’s looking for.”