Service helps loyalty initiatives

Zappos brand marketing manager Michelle Thomas discusses how the company’s customer service focus has helped it engender loyalty.

Q: Can you tell me about Zappos’ move into advertising?

A: This is Zappos’s third year doing advertising. In 2008, we did a campaign letting people know about the brand. Last year, our campaign focused on educating consumers that we are not just about shoes. This year, we are focusing on the three “C”s: clothing, customer service and culture. The integrated campaign features puppets modeled after real Zappos customer service employees to play up our focus on customer service. The new campaign includes TV, e-mail, search, display ads and direct mail. Other online retailers may have spent a lot on building awareness from the beginning, but we haven’t.

Q: What is Zappos’ approach to loyalty and customer service?

A: We feel that our telephone customer service is the best brand positioning, which is why we chose to use it as a backbone for this campaign. On any given day, we find that we have about 75% repeat purchasers and a lot of that is based on our reliability, service and selection.

Q: Do you have a formal loyalty program?

A: We don’t actively have a loyalty program, but it is something that we are beta testing right now. We’re currently trying to develop what loyalty means to us — it’s not necessarily an incentive-based program.

Q: What is Zappos learning from the beta loyalty effort?

A: Right now, it is about engagement and staying top of mind with our customers, rather than getting promotional. A lot of our investment from a marketing perspective is based on everybody having a good experience, whether they are a VIP loyal member or not. Our marketing investment has gone back into our customer service and our free shipping. We have free shipping both ways, and we have free overnight shipping on clothing. More often than not, customers can get surprise upgrades for free overnight shipping. It is more about putting the “wow” factor into the experience.

Q: How does Zappos’ deal with competition when consumers are offered coupons and discounts?

A: Their objectives are a lot different than ours. We do, many times, have challenges when it comes to loyalty, but I think it is about being consistent and providing a great customer experience and making it a place that people seek out as part of their consideration set.

Q: Who is Zappos’ target audience?

A: We refer to her as the happy hunter. She is 25 to 49 years old and has a median household income of $75,000-plus. She is most likely well-educated and married with kids. We are still developing what the sub-segments of that very broad audience looks like.

Q: What new marketing plans do you have in the works for this year?

A: We are going back into security bin advertising in airports. Right now, we are in three New York markets, but we are looking to expand into a few other key areas throughout the year.

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