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Review the “Chapter Eleven Case: Zappos Is Passionate for Customers” at the end of Ch. 11 of Business Driven Technology.

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Discuss whether you are for or against the following statement in the electronic age: Customer relationships are more important than ever, and Zappos provides the new benchmark that all corporations should follow.

Select a side in the argument and justify your answer. Also, discuss the following:

  • Does Zappos use a CRM?
  • How can using a CRM support business operations?
  • What are the benefits and challenges of using a CRM in a business?
  • What would you suggest as best practices that should be used for a CRM to be successful? Explain your answer.

Respond to at least three of your peers. In your response, address any thoughts you have on CRMs supporting business organizations, benefits/challenges of CRMs, and best practices.

Students need to contribute three substantive posts in this discussion by the due date indicated. The substantive posts can be any combination of responses and replies.

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Peer 1

Good evening Class

Zappos I would say does use CRM now, but back in 1996 I sure that it was not as in depth as now and was not really a think of large use. You have to think the technology of 1996 was not that of today and did not have such a large impact on society. Now I’m sure that they have the best CRM software available on the market now. Small business operations using CRM’s allow for the business to learn there customer, manage administrative needs, gives business personal the most of there time by managing customer orders, supply needs, and logistics, along with HR needs. Benefits of using a CRM system are that it is upstreamed and can be viewed real time, marketing solutions are also a plus and customer management. The downside to the CRM system is that it is very expensive and training an entire staff is very challenging across the field. In my opinion when implementing a new CRM system it is always best to first research different makes and see with best works with your network system. Keep track of your training of employees on your system so that everyone is trained and up to standard and there is never a time where anyone says that they do not understand the system or in the event that training needs to be conducted new employees must be the first to attend this training. Ensure that your IT team is current on any updates that the system requires and make sure that your help desk personal and IT team can answer any questions at a moments notice without hesitation.

Peer 2

Good afternoon,

There are a couple of advantages and disadvantages to CRM. But these disadvantages can be reduced with the support of an appropriate CRM person (internal or external) which will work as the driving force within the organization and should provide the right and ideal practice for optimum utilization and implementation.

Advantages:

  • One place for all customer data.
  • Manages growth
  • Automates sending auto emails and SMS to customers.
  • Builds long term relationships with customers.
  • Seeks out how and where to make improvements

Disadvantages:

  • The transition from manual to automated.
  • Not selecting the right system
  • Poor user adoption
  • Integration with existing software
  • Incorrect implementation

If need be. Take a minute to consider if customer relationship management software is the right fit for your business. Which likely will be a majority of the time. In my opinion it is a very needed part of today’s business.

Peer 3

I agree customer relationship are more important than ever I believe to get ahead in business a lot of companies offer the same thing for example apple music google play and other streaming services some offer exclusive music from artist but they have to be competitive the way Zappos stay competitive is Zappos’s passionate customer service strategy encourages customers to order as many sizes and styles of products as they want, ships them for free, and offers free return shipping. Does Zapo use CRM? I would say yes is a means of managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization’s profitability and I say Zappos does this with the free shipping and free return I think CRM can support business operations by 24 hour customer service checking online orders shipping online orders up to 11 pm providing next day shipping and responding to customer inquiries which is the call center that sits in the corporate building as well. The benefits and challenges of using CRM I think one of the benefits like in the reading what if a customer have a problem with one of the products and the sells representative from the company may try to go down to the company to make a sell and the customer already having the product that could be a problem but with the customer service representative the make a ticket log a call the sales representative already should know about the issue before he reaches out the customer maybe he or she can do some damage control and make an up sell or keep the customer happy to be a returning customer. I think customer services is extremely helpful and in house tech support because I know when I worked for OnStar we had user wanted to cancel before we get them and when we get the Onstar System back up and running give them a couple free minutes or 3 months free we was able to keep customers and make them happy and maybe we can up sell the user in the futures.

https://phoenix.vitalsource.com/#/books/9781259852275/cfi/6/52!/4/2/8/6@0:100

Chapter Eleven Case: Zappos Is Passionate for Customers

Tony Hsieh’s first entrepreneurial effort began at the age of 12 when he started his own custom button business. Realizing the importance of advertising, Hsieh began marketing his business to other kids through directories, and soon his profits soared to a few hundred dollars a month. Throughout his adolescence, Hsieh started several businesses, and by the time he was in college he was making money selling pizzas out of his Harvard dorm room. Another entrepreneurial student, Alfred Lin, bought pizzas from Hsieh and resold them by the slice, making a nice profit. Hsieh and Lin quickly became friends.

After Harvard, Hsieh founded LinkExchange in 1996, a company that helped small businesses exchange banner ads. A mere two years later, Hsieh sold LinkExchange to Microsoft for $265 million. Using the profits from the sale, Hsieh and Lin formed a venture capital company that invested in start-up businesses. One investment that caught their attention was Zappos, an online etailer of shoes. Both entrepreneurs viewed the $40 billion shoe market as an opportunity they could not miss, and in 2000 Hsieh took over as Zappos’s CEO with Lin as his chief financial officer.

Today, Zappos is leading its market and offering an enormous selection of more than 90,000 styles of handbags, clothing, and accessories for more than 500 brands. One reason for Zappos’s incredible success was Hsieh’s decision to use the advertising and marketing budget for customer service, a tactic that would not have worked before the Internet. Zappos’s passionate customer service strategy encourages customers to order as many sizes and styles of products as they want, ships them for free, and offers free return shipping. Zappos encourages customer communication, and its call center receives more than 5,000 calls a day with the longest call to date lasting more than four hours.

Zappos’s extensive inventory is stored in a warehouse in Kentucky right next to a UPS shipping center. Only available stock is listed on the website, and orders as late as 11 P.M. are still guaranteed next-day delivery. To facilitate supplier and partner relationships, Zappos built an extranet that provides its vendors with all kinds of product information, such as items sold, times sold, price, customer, and so on. Armed with these kinds of details, suppliers can quickly change manufacturing schedules to meet demand.

Zappos Culture

Along with valuing its partners and suppliers, Zappos also places a great deal of value on its employee relationships. Zappos employees have fun, and walking through the offices you will see all kinds of things not normally seen in business environments—bottle-cap pyramids, cotton-candy machines, and bouncing balls. Building loyal employee relationships is a critical success factor at Zappos, and to facilitate this relationship the corporate headquarters are located in the same building as the call center (where most employees work) in Las Vegas. All employees receive 100 percent company-paid health insurance along with a daily free lunch.

Of course, the Zappos culture does not work for everyone, and the company pays to find the right employees through “The Offer,” which extends to new employees the option of quitting and receiving payment for time worked plus an additional $1,000 bonus. Why the $1,000 bonus for quitting? Zappos management believes that is a small price to pay to find those employees who do not have the sense of commitment Zappos requires. Less than 10 percent of new hires take The Offer. Zappos’s unique culture stresses the following:

  • Delivering WOW through service.
  • Embracing and driving change.
  • Creating fun and a little weirdness.
  • Being adventurous, creative, and open-minded.
  • Pursuing growth and learning.
  • Building open and honest relationships with communication.
  • page 205Building a positive team and family spirit.
  • Doing more with less.
  • Being passionate and determined.
  • Being humble.

 

Zappos’s Sale to Amazon

Amazon.com purchased Zappos for $880 million. Zappos employees shared $40 million in cash and stock, and the Zappos management team remained in place. Having access to Amazon’s world-class warehouses and supply chain is sure to catapult Zappos’s revenues, though many wonder whether the Zappos culture will remain. It’ll be interesting to watch!1

Questions

  1. Why would Zappos benefit from the implementation of a CRM system?
  2. Why are customers at the heart of Zappos’s business strategy?
  3. Analyze the merger between Zappos and Amazon and assess potential issues for Zappos customers.
  4. Propose a plan for how Zappos can use Amazon’s supply chain to increase sales and customer satisfaction.
  5. Argue for or against the following statement: “In the electronic age, customer relationships are more important than ever, and Zappos provides the new benchmark that all corporations should follow.”

 

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