Is Good Customer Service a Good Marketing Strategy?

While working on an assignment about online retailer Zappos (www.zappos.com) for my direct and Interactive marketing communications class earlier this quarter, I came across CEO Tony Hsieh's contention that superior customer service is the best form of marketing and immediately doubted its validity.

According to the company's website, the Zappos philosophy 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 customers)." The online retailer also offers free shipping, free returns, a free 365 day return policy, and 24/7 customer service. Customer service representatives don’t read from a script, don’t require return explanations, aren’t pressured to keep calls as short as possible and are empowered to do whatever it takes to make customers happy. In his book, Delivering Happiness: A Path to Profits, Passion, and Purpose (http://www.deliveringhappiness.com/), Hsieh argues that superior customer service is the best type of marketing because those customers will sing the company's praises to their friends. Hsieh invests the money that Zappos would have otherwise spent on paid advertising into customer service and customer experience (http://www.bizjournals.com/atlanta/print-edition/2011/06/10/hsieh-built-zappos-on-word-of-mouth.html?page=2 ).

Zappos' call center is open 24 hours a day, 7 days a week.

Hsieh's concept of customer service marketing got me thinking about whether customer service constituted marketing at all. As I mentioned in my last blog post, Randy Hlavac, the founder and CEO of Marketing Synergy, Inc. and one of my professors in Northwestern University’s IMC program, suggests that marketing has to be “significant, replicable, provable and manageable.” By this definition, Hsieh's customer service efforts aren’t marketing. Each call center interaction is only part of one sale so they aren’t significant. Because each call is unique and customer service reps have discretion to do whatever they can to rectify the grievance, customer service interactions aren’t replicable. Although Hsieh would probably disagree with me, it's also difficult to prove that such a marketing effort was successful.  Without extensive customer surveys, it's extremely difficult to measure the effectiveness of word of mouth. Finally, marketers can't really manage a customer service marketing campaign because the customer service representatives have unlimited discretion.

Zappos' success may tempt many marketers to try to copy its customer service marketing plan. But I have a hard time imagining that an executive would invest millions of dollars in a marketing plan that doesn’t provide measureable returns and isn’t manageable. The best anyone can do is provide anecdotal evidence that customer service generates significant returns, which likely won't impress brand managers with tight budgets. Although customer relation management may not be marketing in its own right, it has generated an overwhelming amount of positive publicity for Zappos. Perhaps customer service is most helpful as a PR tool to complement trackable marketing efforts.

Jimmy Podolny studies journalism, integrated marketing communications and political science at Northwestern University. You can follow him on Twitter @jamespodolny.

Photo: http://www.glassdoor.com/Photos/Zappos-com-Office-Photos-E19906.htm