His approach has landed Zappos.com on BusinessWeek’s Top 25 Customer Service Champs, among other “best” lists for innovation and company culture. Even a segment on their extraordinary approach to customer service on TV’s Nightline, as well as the cover of Inc. Magazine’s May 2009 issue. In 2008, the company’s gross merchandise sales exceeded $1 billion. Zappos stocks millions of products from over 1,000 clothing and shoe brands, and that appears to be just the beginning. Tony shared the story behind this successful online service leader and how they grew their gross merchandise sales from $1.6M in 2000 to over $1 billion in 2008 by focusing relentlessly on customer service.

Their tagline is “Powered by Service” and they’re committed to providing the best online shopping experience possible, period. “Expedited delivery. Fast, friendly, expert customer service.” The way they see it, Zappos is a service company that just happens to sell shoes, clothing, “and other stuff”.

At last month’s ParaFest, Tony shared some of his customer service principles with Parature customers.

Back to those Zappos Core Values. Core Value #1: Deliver WOW Through Service

“We are not an average company, our service is not average, and we don’t want our people to be average. We expect every employee to deliver WOW … Our philosophy at Zappos is to WOW with service and experience, not with anything that relates directly to monetary compensation. For example, we don’t offer blanket discounts or promotions to our customers.”

Zappos has free shipping, free return shipping and a 365-day return policy. Every customer experiences “fast, accurate fulfillment”, with most customers “surprise”-upgraded to overnight shipping. (There’s a WOW.) Customers are promised friendly, helpful “above and beyond” customer service. For example, if by chance Zappos doesn’t have a customer’s size in stock, a Zappos rep will search three competitor sites for the item and direct the customer there.

What they do internally to make it happen is pretty unique.  A couple examples …

Customers see a big 800 phone number open 24/7 on every page of the site. No call deflection here. According to Tony, Zappos wants to talk to customers. “The telephone is actually one of the best branding tools, if you do it right.”

In fact, every Zappos employee goes through five weeks of training, including training on culture, core values, customer service and warehouse. Everyone gets first-hand customer experience on the phone.

In addition, interviews and performance reviews for all employees are 50% based on core values and culture fit. Zappos makes sure the folks on the phone want to be there, and that passion and energy comes through on every call.

It’s working. Zappos has more than 10 million total purchasing customers, and on any given day, about 75% of the purchases are from returning customers.

Would this kind of “revolutionary” approach to customer service fly in your organization? What do you think?

If you want to read more about the company’s customer service philosophy and unique company culture, visit http://about.zappos.com.