@Risk

After posting a few weeks ago about the lost art of long-term customer loyalty (new research suggests that one-third of the average CPG brand’s most loyal US consumers defected from the brand between 2007 and 2008), it was refreshing to read an opposing point of view in Betty Feng’s new blog post, “How Supply Chain Service Drives Customer’s Loyalty –My Customer Experience with Zappos.”

Here’s my abbreviated version of Feng’s story. Recently, when she needed a pair of shoes for her wedding, Feng turned to the online shoe-shopping leader, Zappos. She easily navigated the Zappos website and placed an order. Within minutes, however, she changed her mind and canceled the order. Shortly after that, she decided to order the shoes again, after all. To make a long story short, by the end of the evening, Feng had logged multiple visits to the Zappos website and two calls to customer service –all of which, by the way, proved to be convenient and quite agreeable, she says. The real surprise, however, came the next morning when Feng’s shoes were delivered to her door –a mere 13-hours after being ordered, canceled, and reordered… and a full 24 hours earlier than expected.

As Feng points out, this end of Zappos’ supply chain is doing several things right, including offering 24-hour customer service, providing 24-hour warehouse operation, and fostering a close, collaborative relationship with their shipping partner, UPS.

A well-oiled supply chain like this becomes a key driver of both profitability and competitiveness because order fulfillment and on-time (or in this case, better than on-time) delivery have a direct impact on customer satisfaction and loyalty. In addition to being lean and efficient,  Zappos’ streamlined supply chain organization won over Feng, transforming a typical online shopper into one of today’s most coveted and at-risk entities, a loyal customer.