Thursday, March 4, 2010

Service Output - Zappos

Service output (SOs) are the productive outputs of the marketing channel that end-users have demand and preference for. The SOs represent all of the aspects of the shopping experience that affect how an individual buys a product as opposed to simply what they buy. It is important to note that SOs do not involve the product itself (i.e. quality or price). The main categories of service outputs include bulk-breaking, waiting delivery time, product variety, spatial convenience, and customer service. Every business has service outputs, but each business varies in the amount of importance they place on each SO.

A company that stresses service outputs as a part of their positioning is Zappos.com. Zappos.com is an online retailer that initially focused on selling shoes, but they have now expanded to include clothing and accessories (i.e. handbags, cosmetics, etc). One of the core values that the company holds is that customer service is of utmost importance. They have effectively used this SO to create a reputation that if a customer is going to go to Zappos.com, then they can expect to be treated as a truly valued customer. Customer service is used in a variety of ways, including free return shipping (to mitigate financial risk that customers may feel from online shopping), ability to return an item within 365 days of receiving it, and also by offering perks for return customers. Zappos.com also places importance on the product variety SO. They demonstrate this SO by continually pointing out that they offer a large selection of shoes (over 90,000) and a wide variety of clothing. A recent Zappos.com ad helps support these findings.



At the 0:18 mark, they include a graphic that says "Deliver Wow Through Service." This further demonstrates that Zappos.com is using customer service as a value proposition to its customers. At the 0:21 mark they begin to stress the product variety that they offer. These two SOs have really enabled Zappos.com to become an incredibly successful company. It will be interesting to see if more companies decide to take a similar approach to service outputs as that of Zappos.com

Jared Fagan
Section G

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