How Zappos Escaped Outrage Over Customer Service Problems

Amid all the outrage about how Netflix and Bank of America handled their recent price changes, it is interesting to see how customer service standout Zappos managed to survive a recent issue fairly-unscathed.

On September 27, Zappos’ executive team confirmed via the public posting of an internal email that the brand’s warehouse management system project, which syncs up the Zappos and Amazon warehouses, created some unannounced and unexpected delays in order processing and fulfillment.

According to the blog post, because the previous system was taken offline as Zappos switched to its new WMS, orders placed from the previous Thursday through Sunday afternoon could not be processed until Sunday night. Some additional snags related to functionality slowed shipping, and it thus took a while longer for the company to clear out its backlog of orders.

While customers have every reason to be frustrated when orders are delayed, especially when the merchant did not provide ample warning about the system issue responsible, the issue itself was far from outrageous. Yes, the delays might be have been a bit lengthy and annoying, but e-commerce companies, inevitably, will run into technological issues that remove service from the realm of the ideal.

For Zappos, however, the issue was worthy of notice. Zappos has built a reputation for impeccable care, and no matter how inclined customers were to actually blame the executives (as opposed to "that pesky technology"), this was not such.

Sure enough, some customers did vent their frustrations. Issues with fulfillment apparently lasted for at least a week after the blog post was published, meaning that resolution was not paced as well as the company-wide email suggested. Comments on the blog ranged from mentions of how Zappos is failing to meet its usual expectations to a demand for CEO Tony Hsieh to apologize.

Ultimately, however, the issue remained very controlled—the virality of the Netflix and BoA complaints simply did not come into play on the Zappos issue. In fact, the first major media piece on the customer service slip-up did not come until Reuters published a low-key article on October 7 (even as of this writing on 10/11, there are less than 5 stories related to the issue indexed on Google News).

No, the relatively-minor Zappos issue might not have warranted the outcry of the permanent fee increase from Bank of America, but shouldn’t unexpected, unwanted service delays from the company synonymous with customer service at least generate the same fanfare as the average Netflix or Microsoft Xbox Live network outage?

The answer probably should be yes. But there are three key reasons why Zappos managed to survive viral customer damnation.

Trust: By now, customers know they can trust Zappos to prioritize their satisfaction. Zappos is known for being transparent, sincere and cordial in its dealing with customers, and it thus consistently demonstrates how greatly it values customer loyalty. Given that clear reputation of concern for the customer experience, Zappos has earned some "leniency" when it comes to customer service shortcomings. The customers who were directly affected by the delays likely experienced short-term frustration, but the typical Zappos user did not fear unannounced delays would become inherent to the customer experience going forward.

As long as Zappos goes above and beyond merely keeping its "status quo" service, it should benefit from the "trust" immunity.

Transparency: It seems Zappos did not provide ample warning to customers, so rewarding Zappos for its "transparency" seems a bit suspect. But, overall, the reward is deserved.

While Zappos could have handled the issue better from a pre-emptive standpoint, once the issue started to affect service, Zappos made sure to keep its customers in the loop. Posting an internal email is already a nice touch for promoting one’s transparency (and showing customers they are valued by the entire organization), and the fact that it clearly explained the issues, the reasons for those issues and the steps it was taking to resolve those issues compounds the value of the transparency.

The latter is particularly important—Zappos made a clear case to show how hard it was working to appease those customers who had been wronged, eliminating the possibility that customers could feel neglected by the merchant. In addition to putting over the "herculean efforts" of its fulfillment team in Kentucky, Zappos also confirmed it hired 500 temporary workers to help alleviate the issues. The email provided a clear glimpse into the company’s operations, showing it had diagnosed the issue, recognized how unacceptable it was to customers and did everything it could to hastily resolve it and prevent it from happening again.

Having received all that information, customers had absolutely no reason to doubt Zappos’ remorse and question whether the company was getting complacent on customer service.

Recent companies that have struggled with customer outrage either failed to transparently explain the problem, the reason for the problem and the solution or failed to give an explanation that was both transparent and customer-centric. Zappos did both successfully.

Personal Response: Zappos did what so many companies are evidently failing to do: respond to social customer concerns. While it is true that some customer comments persist about sluggishness on the part of Zappos’ customer service function to address the issue, they also reveal that Zappos did reach out with the intent of turning frustrated customers into happy ones.

"Obviously I wish I hadn't had to post on your blog to get the level of service I had been used to. But…the fact that I got such a fast, personal response when most companies seem to ignore web comments is amazing," wrote one frustrated customer in an addendum to her original blog comment. Note that this customer was not only upset about the initial issue but also about how Zappos initially followed through. Ultimately, however, Zappos remained committed to tying up loose ends, and the result was one more happy customer and one less comment to potentially go viral.

The combination of trust and transparency will help the average customer remain confident in the face of a service issue; Zappos’ blog post and committed overall response showed that it was refusing to sacrifice its reputation for great service over a technological snag.

But the individually-effected customers don’t just care about Zappos’ overarching commitment to customer care—they want to see their individual issues prioritized and rectified. A personal response does exactly that.

HOW DO YOU COMPARE TO ZAPPOS?: Are you properly aligning your customer service team with the greater business? Are you successfully engaging customers on social media? These are among the key topics at the 7th IQPC Call Center Summit - details here!