Exegesis of Zappos’ strategies on customer relationship management and enterprise resource planning
How Zappos stands out with customer relationship management (CRM) and enterprise resource planning (ERP)
One of the primary goals of any marketing strategy should be to identify and meet the needs of the consumer. Implementation of a Customer relationship management (CRM) has contributed to Zappos’ greater customers satisfaction and the long-term relationships with companies and customers.
“Customer relationship management (CRM) is a means of managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization’s profitability” —Paige Baltzan
Zappos is a good user of the two primary components of CRM strategy: operational CRM and analytical CRM. Through operational CRM, Zappos communicates with its customers via various communicating channels, and satisfies their needs by ordering different styles and sizes products as they want and providing free shipping and free return. Zappos then keeps tracking their customers and get customer information such as shopping preferences and behaviors.
Through analytical CRM, Zappos can make relevant strategies for advertising and marketing based on customer information, which in turn, helps Zappos keep the existing customers and attract more potential costumers. Accordingly, implementation of a CRM increased the customers’ satisfaction and creates strong loyal customers for Zappos.
The implementation of CRM and enterprise resource planning (ERP), as well as SCM, for a connected corporation can be attributed to Zappos’ valuing all the partners, suppliers, customers and employees. Zappos offers an enormous selection for customers (e.g. more than 90,000 styles), works with many suppliers (e.g. more than 500 brands), provides excellent employee benefits (e.g. “The Offer”), and processes numerous customer requests (e.g. the call center receiving more than 5,000 calls a day).
The partners, suppliers, customers, and employees are not separated individuals. They are connected as a whole in the supply chain so that Zappos has to deal with them with a SCM to ensure the information flows in supply chain planning and execution are effective, efficient, and profitable. Zappo is also passionate for customers, which requires a CRM to ensure the customers’ needs can be satisfied through communication and operation, and the suitable marketing and advertising strategies can be made through analyses on customers’ preference and behavior. Thus, the CRM can bring Zappos with customer loyalty, retention, and profitability.
“ERP integrates all departments and functions throughout an organization into a single IT system so employees can make decisions by viewing enterprise wide information about all business operations” — Paige Baltzan
To value so many partners, suppliers, customers and employees, Zappos possesses various relevant departments and functions.
Therefore, the ERP is necessary to integrate all the departments and functions into a single IT system. The core of Zappos’ ERP, which probably located in Las Vegas (headquarter), gathers transactional data from operational system across the company, processes them, and then provides the relevant employees with wide information about the whole company’s operations before making business decisions.