These days, online retailers are a dime a dozen. But in a short period of time, Zappos has become a billion-dollar e-tailer. How did it hit the dot-com jackpot? By providing some of the best service available anywhere. Zappos customers are showered with such perks as free shipping both ways, surprise upgrades to overnight service, a 365-day return policy, and a call center that is always open. Customers are also delighted by employees who are empowered to spontaneously hand out rewards based on unique needs.

With such attention to customer service, it’s no surprise that Zappos has an almost cult-like following of repeat customers. But remaining committed to the philosophy that the customer is always right can be challenging. This video highlights some of the dilemmas that can arise from an operating within a highly customer-centric strategy. Zappos also demonstrates the ultimate rewards they receive from keeping that commitment.

Discuss with your classmates the following points:

Describe Zappos’ market offering.

What is Zappos’ value proposition? How does it relate to its market offering?

How does Zappos build long-term customer relationships?