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From the Trenches

The Value of Good Marketing and Customer Service

Will Davis | July 29, 2009

Marketing takes it on the chin a lot.  Marketing as a word has almost dirty connotations to some (although I imagine not many of you reading this space).  And so it’s always nice to see the value of good marketing.

In a move that came as a surprise to many last week, Amazon acquired Zappos for what will end up probably being somewhere between $800 and $900 million (since the deal is mostly in stock it will vary depending on how the stock is valued).

I was with a few colleagues when we heard the news and it sparked an interesting discussion.  One of the folks in the room pointed out that while Zappos revenue numbers are a bit hazy; they trumpeted hitting the $1 billion mark in sales in a press release celebrating their 10th anniversary in 2008.  His point was that they sold for less than 1 year’s sales.

My point was completely different.  Here you have Amazon.com, the behemoth of online commerce, that already has its own shoe operation, purchasing Zappos.  And it’s clearly a triumph of marketing and customer service.  I don’t think any of us believe Amazon needed Zappos for operations (warehouses, access to shipping, etc.).  Clearly if success were tied solely to these types of operational logistics Amazon could have crushed Zappos.

Where Zappos succeeded was in marketing and great customer experiences.  Building a brand and a culture around customers, then delivering through surprise discounts, an accessible and personable CEO leveraging the social web, and what is legendary customer service they have been driving incredibly high levels of repeat customers and phenomenal word of mouth.  It’s that strategy that led to the acquisition by Amazon.

At a time when marketing in general takes so many hits, it’s worth hearing the Zapposs story and learning something from it – That smart marketing and phenomenal customer experience can indeed go a long way.

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