This is a guest post from Ashley Furness of Software Advice Zappos is renowned globally as the model for customer-centric culture, partially for the e-retailer’s unique approach to performance management. “Zappos invests in the call center not as cost, but the opportunity to market,” Joseph Michelli explained to me recently. He authored a whole book […]

This is a guest post from Ashley Furness of Software Advice

Zappos is renowned globally as the model for customer-centric culture, partially for the e-retailer’s unique approach to performance management.

“Zappos invests in the call center not as cost, but the opportunity to market,” Joseph Michelli explained to me recently. He authored a whole book on the concept, called “The Zappos Experience.” This has resulted in as much as 75 percent of their sales coming from return customers, who spend on spend average 2.5 times more than first timers.

Two of the most popular Key Performance Indicators in the industry – time-to-resolution and call times – counter Zappos’ entire customer service model. These metrics are meant to drive productivity, but they wrongly assume the customer just wants to be rushed through the process as quickly as possible.

The company’s entire strategy is to create loyalty through incentivizing ‘wow’ moments and emotional connections. Here are the four KPIs they use to monitor, track and improve performance:

Measuring Call Quantities

Zappos’s longest call on record lasted more than eight hours, and guess what? This interaction was lauded by leadership as a stellar example of serving the customer.

Instead of valuing quick time to resolution or processing high call volumes, Zappos looks at the percentage of time an agent spends on the phone. Every agent is expected to spend 80 percent of their time on the phone, in chat or in an email response. This metric is a way to empower the team and to utilize time in a way that best promotes customer loyalty.

The Wow-ed Customer

Customer appreciation is paramount for Zappos. They do this by grading calls on a 100-point scale they call the “Happiness Experience Form.” Every agent is expected to maintain a 50-point average or higher. This score is based on several factors, including:

Did the agent try twice to make a personal emotional connection (PEC)? Did they keep the rapport going after the customer responded to their attempt? Did they address unstated needs? Did they provide a “wow experience?”

At the end of the month, management identifies agents with less than a 50-point average on the Happiness Experience Form. Those agents receive extra training. Top performers are rewarded with paid hours off and other incentives.

The Importance of Idle Chats

Zappos monitors “abandonment time,” or periods when an agent has a session open even though the customer already disconnected from the chat. Customer Loyalty Operations Manager Derek Carder said sometimes agents do this purposely to avoid responding. This strategy of looking for idle chats zeroes in on the cause of unproductivity. When agents aren’t productive, customers wait longer. And the longer they wait, the more apt they are to abandon the session.

Attendance is Key

Zappos uses a program called Panda to combat absenteeism. Employees receive a point for every day they miss work or come in late. Staff with zero points in a given period receive a varying number of paid hours off. These hours can be accrued and stacked for an entire paid day off, Carder explains.

The primary take away is that Zappos created metrics that emphasize creating a relationship with the customer rather than rushing them through the call. At the same time, these KPIs still successfully improve performance and make employees feel appreciated and rewarded.

Ashley Furness is a market analyst with Software Advice. She has spent the last six years reporting and writing business news and strategy features. Her work has appeared in myriad publications including Inc., Upstart Business Journal, the Austin Business Journal and the North Bay Business Journal. Before joining Software Advice in 2012, she worked in sales management and advertising. She is a University of Texas graduate with a bachelor’s degree in journalism.

By Last Updated: April 8, 2021Categories: Blog3.2 min read