November 3, 2004, 12:00 AM

How Zappos gets 50% of sales from repeat customers

As it focuses its growth strategy on building a reputation for customer service, Zappos.com has increased its business from repeat customers to 50% of sales. “That’s a good indicator of how happy people are with our service,” says president Tony Hsieh.

As it focuses its growth strategy on building a reputation for customer service, Zappos.com has increased its business from repeat customers to 50% of sales. “That’s a good indicator of how happy people are with our service,” president Tony Hsieh tells Internet Retailer.

A couple of years ago, Zappos got 20-30% of sales from repeat customers, but has since taken several steps to improve its customers’ shopping experience, Hsieh says, adding that some improvements result from customers’ suggestions.

For example, after customers with hard-to-fit feet requested information about the availability of unusual sizes and styles, Zappos built a system that automatically e-mails certain customers when new inventory arrives in their size. “When we scan the bar codes on new merchandise, it automatically triggers an e-mail to customers that their size is in,” Hsieh says.

Zappos, which expects to do $175 million in sales this year, up from $70 million last year, has also continued to expand its customer service staff, which already includes about 100 agents-one-fourth of its total workforce of 400. It continues to add about 5 to 10 new agents every two weeks, after screening a field of about 150-200 applicants, Hsieh says.

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