Q1.It is quite evident that great customer services at Zappos increases costs such as free same day shipping, extensive employee training, and other expenses. In order to offset these costs, the company can reduce costs of operation in other areas such as reducing the cost of two-way shipping. The company has to make sure that it provides a drop shipping. A drop shipping means that after a customer has requested for a pair of shoes online, the company would then request the customer to go and pick the shoes at the closest warehouse of the company. This method reduces the after services costs (Abrams, 2012).
On top of that, Zappos Company reduces other costs of operation such as the recruiting, hiring, and training costs. The company makes sure that it saves a bigger percentage of these costs as compared to the 150 percent of the world shoes industry by not limiting call centers. Unlike other call centers, calls to Zappos are not timed neither do the call center workers have to meet the minimum sales goals. In the end, all of these calls are paid off with a lower turnover. In addition, the Zappos Company can also reduce the cost of operation by minimizing the number of errors made by employees as well as reducing the advertisement and product promotion costs (Arden & McGarvey, 2008). The company can also reduce its operational costs through outsourcing and offshoring. For example, the company can collaborate with another transporting company that will ensure that the cost of transportation of its shoes from one warehouse to another is reduced. This will also save the time wasted through ship transportation.
Q2. By off shoring its customer call center, the Zappos Company saves a substantial amount of money. This is true because offshoring its call center means that the company moves its operational activities to another country or place where it has a branch. For example, if the Zappos Company has another branch in another country, it will use the off-shoring technique to recruit workers and employees to work at the customer’s centers from that country (Perschel, 2010). This technique will assist the company to save taxation costs as well as expenses of transportation of employees from one country to another. Offshoring will also reduce the cost of hiring new workers because labor in many countries is cheap. The only disadvantage that the Zappos Company will incur in offshoring its customer call centers is the cost of training new employees in another different place to be competent employees.
Q3. Zappos Company can enhance its customer service through the following ways. First, the company can ensure that it provides a quick delivery of shoes to its customer. After a customer purchases some shoes online, he or she expect the shoes to be delivered as soon as possible. The company can reduce the amount of time taken to deliver the shoes to the customer by collaborating with some flight transportation company, which will ensure that the shoes are delivered to the customer faster. In addition, the company can also increase the number of its warehouses in different locations. This will ensure that after a customer request, for delivery of shoes, the distance covered to acquire the product will be shortened because the nearness of the warehouse. In so doing the company will enhance its customer service (‘Zappos knows how to kick it’, 2009).
The Company can also enhance its customer services with lean manufacturing and increasing its call centers and warehouses in other different places. Lean manufacturing ensures that the company eliminates waste products to cut the costs, and ultimately delivering more valuable and quality products to the customer. Increasing its call center offices and warehouses will ensure that there is enough supply for shoes to its customers. When the supply is high, the customers will have enough variety to choose from.
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